White House discontinues long-term care program

Health and Human Services Secretary Kathleen Sebelius announced on Oct. 14 that the department is suspending its efforts to implement a long-term care program authorized by the health system reform law -- a move that will increase the law's cost. HHS had spent 19 months examining methods to implement the Community Living Assistance Services and Supports program, which would have given Americans the option to buy long-term-care insurance policies not available on the private market.

"Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time," Sebelius wrote in an Oct. 14 letter to congressional leaders. The health reform law required the secretary to launch a program that is actuarially viable for 75 years, fully paid for by enrollee premiums, and offers lifetime and cash benefits, but HHS determined that is not possible.

Republicans and other Obama administration officials, including Centers for Medicare & Medicaid Services Chief Actuary Richard Foster, had said the CLASS Act was financially unsustainable. Sen. Edward M. Kennedy (D, Mass.) advocated for the program's inclusion in the health reform package before he died in August 2009.

Rep. Charles Boustany Jr., MD (R, La.), suggested that Republican opposition to the long-term-care program was instrumental in its demise.

"This program was foolishly created, unworkable and fiscally unsustainable," Dr. Boustany said in a statement. "As HHS continues to work and implement Obamacare, I will continue my vigorous opposition and fight to repeal this egregious plan. This decision is proof that Obamacare must be replaced with true health care reform enhancing the doctor-patient relationship."

Joyce A. Rogers, senior vice president for government affairs at AARP, said her group was disappointed with the HHS decision and insisted that an actuarial report on the program left open the possibility that the program could be made sustainable. She urged the White House to keep working on developing the benefit.

Sebelius' decision means that the health reform law will cost more. The Congressional Budget Office estimated in March 2011 that the CLASS Act would reduce federal deficits by $83 billion over a decade, mostly because the program initially would collect more premium dollars than it would need to pay for benefits.

Sebelius' letter and a report detailing HHS' work on the CLASS Act is available online (link).

Note: This item originally appeared at http://www.ama-assn.org/amednews/2011/10/31/gvbf1031.htm.