Q: How did a big component of the 2012 health care law get jettisoned without Congress taking action?
A: The health care law enacted last year included a provision called the Community Living Assistance Services and Supports Act, or the CLASS Act, a long-term care insurance program. In October, the Secretary of Health and Human Services announced that the CLASS Act wouldn’t be implemented because it couldn’t be made to work. It couldn’t be made to work because the health care law also included a provision that required the CLASS Act to be actuarially sustainable in order for it to be implemented. This program was financially unsound from the very beginning.
Q: Why was a program passed into law if it wasn’t doable?
A: It was well known during the debate on health care reform that the CLASS Act proposal was impossible to deliver. The Chairman of the Budget Committee, Senator Kent Conrad of North Dakota, called it a “Ponzi scheme Bernie Madoff would be proud of.” Even so, the CLASS Act was propped up because of the budget gimmick it enabled. It allowed supporters of the 2010 health reform to say that the whole bill was paid for and even saved money. The CLASS Act was required to be actuarially sound on paper. The CLASS Act would take in revenues in the early years but lose revenues soon after and that, ultimately, it would either fail or require a bailout to be salvaged. On paper, it saved money in the short-term, but it showed massive deficits accumulating over the longer term. Health reform supporters used the short-term revenues from this program to make a misleading claim that the overall bill did not increase the deficit, and they got away with it to a large degree. Yet the budget realities were clear. All this makes it intellectually dishonest for the administration to have said this month that the reason it wasn’t going to implement the program was because it was worried about hurting the people the program was supposed to serve.
Q: Still, long-term care is a major concern and issue that needs to be addressed, for the disabled and also for middle class seniors.
A: Absolutely, and that’s why it was unfair to the disability community, in particular, to pass something into law with a wink and a nod about the fact that it wouldn’t come to be, and in order to fuel a misleading argument about the fiscal impact of the larger bill for political gain. Demand for long-term care services is expected to continue to increase during the next three decades because of America’s aging population, and responsible policies are needed to meet the challenges accompanying this demographic shift. Coverage by Medicaid and Medicare for this kind of coverage is limited in scope, with Medicaid serving the very low-income under increasingly difficult fiscal challenges, and Medicare paying only for acute-care services for seniors. As a legislator, I’ve led a number of efforts to expand long-term care coverage and retirement security with tax incentives for purchasing these policies. I also spearheaded passage of the Money Follows the Person Rebalancing Act to give states options for implementing home- and community-based services for the disabled. Senator Ted Kennedy and I got enacted a Family Opportunity Act, which makes it possible to extend Medicaid coverage to children with disabilities, in order to keep parents working. And, I’ve sponsored the Empowered At Home Act which would revise the income eligibility levels for home- and community-based services for elderly and disabled individuals. In addition to access to care, I’ve worked for 15 years – through legislative reforms and congressional oversight of the executive branch -- to increase accountability among nursing homes for the quality of care provided to seniors and the disabled.