CLASS Act Fiasco Highlights Obamacare’s Flaws
Republicans warned: “The CLASS Act is another classic gimmick of budgetary shenanigans.”
Senator Gregg, 12/2/2009
The Obama Administration promised: “This is not a budget gimmick.”
OMB Director Orszag, 3/4/2010
What happened: “We have not identified a way to make CLASS work.”
HHS Secretary Sebelius, 10/14/2011
- During the Obamacare debate, the controversial long-term care program CLASS was widely derided as a budget gimmick. Even Democrat Budget Committee Chairman Conrad called it a “Ponzi scheme of the first order.”
- Democrats said CLASS would provide $86 billion in savings to Obamacare — 41% of the total budget savings they claimed for the law — even though many independent experts questioned the program’s viability from Day One.
- Under Republican questioning last February, HHS Secretary Sebelius admitted that CLASS was “totally unsustainable” as written, though she claimed she could fix the program unilaterally.
- Last Friday, the Obama Administration finally announced there was not a “viable path forward for CLASS implementation” and that it would drop the program.
- Yesterday, CBO announced that repealing CLASS would not cost taxpayers any money, contrary to earlier claims by the law’s supporters.
- The Administration says that CLASS collapsed because of substantial uncertainty surrounding long-term care insurance. But the forecast for the rest of Obamacare is just as uncertain.
- The law assumes that employers will not drop health coverage, but countless studies, reports, and surveys point to large numbers of businesses cancelling health insurance.
- If this trend continues, the cost of Obamacare could swamp the federal balance sheet and render the entire law fiscally unsustainable.
- The next step is to repeal the CLASS Act – over President Obama’s objections if necessary – along with the rest of Obamacare, and replace them with common-sense reforms that truly lower costs.