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WASHINGTON, D.C. —  Senator John Thune, a member of the Senate Budget Committee, today sent a letter to Senate Budget Committee Chairman Kent Conrad (D-N.D.) requesting a hearing to assess the budget implications of the Community Living Assistance Services and Supports (CLASS) Act, which was included in the new health spending law.

In his official request to Chairman Conrad, Thune cites Health and Human Services Secretary Kathleen Sebelius' recent statement that the CLASS Act is "totally unsustainable," and the Congressional Budget Office's assessment that the CLASS Act would add to future deficits, "by amounts on the order of tens of billions of dollars for each 10-year period."

The full text of Thune's letter is included below.

March 16, 2011

The Honorable Kent Conrad, Chairman
Senate Budget Committee
624 Dirksen Senate Office Building
Washington, D.C. 20510

Dear Chairman Conrad,

I am writing to request the Senate Budget Committee hold a hearing to assess the budgetary impact of the Community Living Assistance Services and Supports (CLASS) Act that was included as part of the Affordable Care Act (P.L. 111-148, P.L. 111-152). As you know, the CLASS Act established a new long term care entitlement program.

I am specifically requesting this hearing because over the last two months new information has come to light that I believe warrants closer examination of the CLASS Act.

First, at a hearing before the Senate Finance Committee last month, Secretary Sebelius said that she believes the CLASS Act, as written, is "totally unsustainable." I could not agree more. During the debate on the Affordable Care Act, assessments on the sustainability of the program were done by the Chief Actuary at the Center for Medicare and Medicaid Services (CMS), and the Congressional Budget Office (CBO). At that time, CBO said the CLASS Act "would add to budget deficits in the third decade-and in succeeding decades-by amounts on the order of tens of billions of dollars for each 10-year period."

The Chief Actuary at CMS also raised concerns that the CLASS Act is not a viable program because his calculations showed that the initial average premium would need to be approximately $240 per month to attempt to mitigate the low enrollment due to high premium costs, adverse selection, and other factors. At more than $2,800 per year, it is an exorbitantly large percentage of income for many Americans. If Secretary Sebelius believes this program is "totally unsustainable," Members of Congress should have the opportunity to examine this program closely before implementation.

Second, Secretary Sebelius has spoken of broad powers to make changes to the CLASS Act in an attempt to make it more fiscally sound. She appears to be exploring changes in the eligibility criteria, such as employment and earnings requirements, and changes to premiums. However, the Congressional Research Service disagrees with the scope of the Secretary's powers to make such changes. It is critical that Members of the Budget Committee have the opportunity to examine the changes HHS is considering because of the effect this could have on the federal budget.

Finally, in today's Finance Committee hearing, Secretary Sebelius would not deny that HHS had conducted actuarial modeling prior to the passage of the Affordable Care Act. These models are important in the evaluation of the federal budget, as well as of the solvency and sustainability of the CLASS program, but the actuarial models still have not been released to all Members of Congress. It is imperative that the Budget Committee have the opportunity to examine the actuarial models HHS created prior to the law's passage and examine the updated actuarial models currently under consideration because of the CLASS Act's significant budgetary implications.

In order to gain a better understanding of the current implementation process and the actuarial models HHS is using, I request that the Senate Budget Committee invite Congressional Budget Office Director Douglas Elmendorf and the Chief Actuary for the Centers for Medicare and Medicaid Services Rick Foster, to testify before the Senate Budget Committee on the implementation of the CLASS Act.


John Thune
U.S. Senate