By Jane Norman, CQ HealthBeat Associate Editor
March 30, 2011 -- Obama administration officials may have to tell Congress it has to break the health overhaul law by not implementing a long-term care insurance program, Community Living Assistance Services and Supports (CLASS), if it cannot be reworked to become financially sustainable, Health and Human Services Secretary Kathleen Sebelius said Wednesday.
Testifying before Senate appropriators, Sebelius said if her staff can’t make the program work financially, “we won’t turn the switch on it.” After the hearing she told reporters that HHS officials continue to work on models of a viable version of the Community Living Assistance Services and Supports (CLASS) program. “But if we can’t have a program design we know at the outset is going to be solvent, I think we’ll return to Congress and say it won’t be solvent and therefore we’ll be violating the law,” she said.
The program, intended to provide a cash benefit for the elderly as well as for younger people with disabilities, has come under fire from both Republicans and the president’s own fiscal commission, which said it should be revamped or repealed. HHS is attempting the former. The program is supposed to launch in 2012.
Under the health care overhaul law (PL 111-148, PL 111-152), the long-term care insurance program would be offered by participating employers to workers automatically, though employees could choose to opt out. There would be no underwriting, which means no one could be excluded for a pre-existing condition. Participants would not be eligible for benefits until five years after enrolling, and the benefit would be at least $50 a day.
At the hearing of the Senate Labor-HHS appropriations subcommittee, Sen. Richard C. Shelby, R-Ala., called the program “one of the most troubling aspects” of the health care law. He said the costs incurred by disabled workers will push premiums to “unacceptably high levels.” That will mean healthy people will decline to buy the insurance, and that will “quickly push the program to insolvency,” Shelby said.
He asked Sebelius why the Obama administration has asked for $120 million in funding in fiscal 2012 for “a program that a lot of experts project will fail.” Sebelius said that under the law, HHS is prohibited from launching the program until it’s projected to be financially stable over 75 years, and actuaries now are working on how to structure it.
The money in the budget “is designed to make sure we have a solvent program” by reaching out to encourage enrollment, she said, especially among Americans who mistakenly think that Medicare provides long-term care.
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