Obamacare’s Not-So-Classy Gimmicks and Games on the CLASS Act
This week’s edition of CQ has an article, titled The Inelegant Truth about the CLASS Act, outlining the controversy surrounding the Administration’s recent decision to close (or not close) the CLASS Act office as emblematic of the problems surrounding Obamacare’s new long-term care entitlement. The article helpfully points out that back in 2010, then-OMB head Peter Orszag wrote that Obamacare was not relying on a “business-as-usual Washington gimmick.” But here’s what that same Peter Orszag said about the CLASS Act earlier this year, after leaving the Administration:
A final concern involves the CLASS Act, a voluntary national long-term-care insurance program created by the bill. There is a serious risk that healthy people may be reluctant to join the program, whereas those who most need long-term care will be eager to do so, jeopardizing the idea of a broad and stable risk pool. The only solutions may be to make the purchase of such insurance mandatory or to require employers to provide it by default unless employees opt out—a strategy that has worked well in boosting participation rates in 401(k) plans.
So Orszag now admits that CLASS – which on paper produced $70 billion of budget “savings” according to the Congressional Budget Office – is in “serious risk” of becoming unstable due to structural flaws “jeopardizing” the program, and the “only solution” may be to rely on a constitutionally dubious mandate to salvage the program’s solvency. Sounds like a business-as-usual Washington gimmick to me…
I’ll give the last word to consultant (and former Clinton Administration) official Dan Mendelson, who even as a CLASS supporter admitted that “The [budget] scoring is just a game.” Recent events have proven that statement all too true when it comes to CLASS – that the supposed savings never existed, and the program could cost the federal government billions. Unfortunately, it won’t be a game to taxpayers then.