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Long-term care looks doomed as federal program

Staff moved to other duties

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The Obama administration this week is shutting down the office charged with carrying out a long-term-care entitlement program included in last year's health care law, according to a departing employee who said the staff has been reassigned to other projects.

The news raises the question of whether the Obama administration is pulling back on implementing the program, known as the CLASS Act, which was a priority of Sen. Edward M. Kennedy, the Massachusetts Democrat who died in 2009, and was inserted into the massive health care overhaul that President Obama signed into law.

Officials doubted the viability of the program even before it became law, and a Republican report released last week cited one internal Obama administration official calling it a "recipe for disaster." More evidence of the program's shaky footing surfaced Wednesday night, when the Senate Appropriations Committee passed a bill zeroing out any funding for implementing the CLASS Act even though the administration had requested $120 million.

All of the staff members have been told to work on other programs, said Bob Yee, the program's actuary, who said he and seven other employees were told last week they would no longer be involved in implementation. In a letter circulated Thursday on Capitol Hill, he said the office would be closed on Friday.

"They just told us they wanted to take a pause," Mr. Yee told The Washington Times. "I don't know of any other employees working on this."

Erin Shields, a spokeswoman for the Department of Health and Human Services, disputed Mr. Yee's characterization that the program has been shut entirely, though she did say the program's future is in doubt.

"We are continuing our analysis of this program," she said. "As we have said in the past, it is an open question whether the program will be implemented. A CLASS program will only be implemented if it is fiscally solvent, self-sustaining, and consistent with the statute."

She didn't respond to follow-up requests asking how many employees remain in the program and what the office's role will be.

Short for Community Living Assistance Services and Supports, the CLASS Act offers continuing care coverage to seniors and others in need of in-home services. For a monthly premium, beneficiaries would receive daily cash benefits of at least $50.

The concern lies in whether enough healthy beneficiaries will enroll the program to make it financially sustainable.

The program is estimated by the Congressional Budget Office to bring in $70.2 billion in the first 10 years, but that's because beneficiaries must pay into it for five years before withdrawing benefits. Over the longer term, it's seen as a major budget drain.

Months after the program was passed as part of the Affordable Care Act, Rick Foster, chief actuary of the Centers for Medicare and Medicaid Services, told officials it didn't look "workable" and said the program likely would collapse without the help of taxpayer subsidies.

Sen. John Thune, the South Dakota Republican who led last week's GOP report, praised his colleagues who moved to defund the program, calling it a "good first step." But he said Congress should repeal the CLASS Act permanently.

"I commend the Senate Appropriations Committee on their bipartisan decision to provide zero funding for the CLASS Act," Mr. Thune said. "Last night, Senate Democrats joined with Republicans in recognizing the CLASS Act would be yet another government program that we cannot afford."

On Thursday, a group of Senate Republicans sent a letter to HHS Secretary Kathleen Sebelius asking her to explain the agency's plan for CLASS and respond to questions about when she became aware of the internal concerns about the program.

"This raises a very serious question as to whether a deliberate effort was made by administration officials to conceal CLASS' true cost in order to advance the president's agenda," said Sen. Jeff Sessions, Alabama Republican and ranking member of the Senate Finance Committee.

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