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No Doubt About It, Obamacare is Unraveling

House was right to repeal CLASS program, a key part of Obama's health care reform law that some consider a 'ponzi scheme.'

This week the U.S. House repealed an unsustainable entitlement called the Community Living Assistance Services and Supports (CLASS) program, which was created to offset the costs of Obamacare. Its repeal is a victory for those of us seeking to dismantle the fiscal quagmire of President Obama’s health care reform law.

A former director of the nonpartisan Congressional Budget Office called CLASS “the poster child for President Barack Obama’s health care reform: bad policy, deceptive budgeting and stealth government expansion.” The top Democrat on the Senate Budget Committee called it “a ponzi scheme Bernie Madoff would be proud of.”

It is also the key policy linchpin the Obama Administration used to offset the $1 trillion price tag on Obamacare. The CLASS program was not an accidental miscalculation, but rather an attempt to withhold information from the American people on the full cost of the health care law.  

The CLASS program was intended to be a national, voluntary insurance program for long-term care. However, the program depended on budget gimmicks to hide the actual cost: it would immediately begin collecting payments, but would not pay out benefits for five years.

As a result, in the short run, it appeared viable, accounting for $80 billion in phony savings. But in the long run, particularly as America’s population ages, the new entitlement would wreak havoc on our already broken federal budget.

What is really alarming is that the President and other proponents of Obamacare knew about the fiscal train wreck and did nothing about it. A congressional investigation found that the administration was well aware of this budgeting trick, but ignored warnings from Health and Human Services officials that the program was a “recipe for disaster.”

Instead, the president and congressional Democrats rushed to include it in the law to achieve its phony savings as a way to shore up support for the health care law. 

Thankfully, an amendment was added to Obamacare that required the administration to first ensure that the CLASS program would be solvent for 75 years, before HHS began implementation. Of course, that made transparency and disclosure wait until after Obamacare’s passage.   

Only because of this requirement, last October, HHS Secretary Kathleen Sebelius had to suspend the program and admit that it was insolvent. Just as suspected, there was no way to successfully implement this new entitlement in a way that was fiscally sustainable.

The CLASS program’s failure is significant for two reasons. First, the phony savings now leave an $80 billion hole in our federal budget. Second, this program reveals the budgeting gimmicks upholding the health care law.

Still, the administration refuses to acknowledge these two facts. In fact, the president promised to veto efforts to repeal the CLASS program. 

Obamacare-believers have buried their heads in the sand, but clearly, the false charade is unraveling before our very eyes. Repealing the CLASS program is one step toward undoing this atrocity.

Craig Casey February 07, 2012 at 02:43 AM
Keith Schmitz you need to recheck your facts. The US system is overpriced, healthcare inflation is a problem here as in other countries, but the US has the finest, #1 for responsiveness. You can try and twist mortality rates and torture the stats to try and arrive at #37 for US, but fact is we have the among the finest in the world. So you propose to destroy out economy and currency to move America up a few notches on some socialist ranking?
Craig Casey February 07, 2012 at 02:47 AM
Craig, you obviously have never sold health insurance. If you take a basic plan from a more comprehensive plan, there is typically no underwriting. If you go from a basic plan to more comprehensive, they might be able to underwrite you depending on your state's laws.
Craig February 07, 2012 at 03:15 AM
Craig Casey I was not talking about short term medical insurance, they have a very limited client base. I know many agents sell these first and a few months later will sell a longer term plan. It opens you up to liability should one of them wind up with a cronic sickness and become uninsurable.
Ruth Duffrin February 07, 2012 at 05:50 PM
A little off topic but Jim needs to retire. I really don't care who takes his place except that person has to give a damn, work for his people, take some input from his constituents and quit looking like he is about to fall over when walking in parades. His little boys need to stand up to the old man and not wear the cute little blue aprons.
Don Niederfrank February 10, 2012 at 03:26 AM
U.S. health care for those who can afford it or have insurance that will pay for it is second to none, hands down. It is not only Canadians, but folks of means from every nation come here. For those of lesser means and insurance...well, there are different kinds of rationing/limiting. Health care costs in this country have risen far faster than the cost of living and wages over the past 2 decades. This is due to increases in technology, malpractice insurance and us aging boomers. It is also the case that people in the medical fields are well-paid. We are not Greece, but as a nation we do not produce enough goods and services to pay for the level of medical we all desire. Whether gov't or insurance companies, someone(s) will limit/ration health care in the future to an even greater degree than it is now. I favor gov't run health care for a couple of reasons-- Insurance companies spend a lot of money trying not to pay or to pay the least amount for health care. The era of the well (over?) paid gov't employee is coming to an end. Fiscal conservatism is on the rise even among moderate/liberals like myself. IOW, our gov't, like that of every other Western democracy, will be able to manage it. And we won't be dropping dead in the streets any more than the Germans or the Brits. Or at least fewer of our poor neighbors will. We cannot afford to provide Cadillac health care for my demographic. Entitlements will be cut.

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