Congressional Working Group Releases Investigative Report on Unsustainable CLASS Act

--Internal Emails Reveal HHS Suppressed Information on Viability of Program--

The bicameral Repeal CLASS Working Group, of which I am a co-chair, issued “CLASS’ Untold Story: Taxpayers, Employers, and States on the Hook for Flawed Entitlement Program,” a report detailing the insolvency of a massive new entitlement program included in the new health care law called the Community Living Assistance and Supports (CLASS) Act.

Documents obtained through a bicameral Congressional investigation reveal that the Obama Administration’s Department of Health and Human Services (HHS) was acutely aware that the program was unsustainable and suppressed this information from Congressional leaders and the American people prior to the passage of the law, all in the effort to achieve phony savings to offset the bill’s massive spending and taxpayer-funded price tag.

The Repeal CLASS Working Group is comprised of Republican leadership in both the House and the Senate charged with overseeing the implementation of the new health care law.

The Working Group’s key findings include:

Senior HHS officials publicly pronounced the CLASS program solvent in the fall of 2009, even as their own employees were calling CLASS “a recipe for disaster” in internal emails.

Secretary Sebelius and other HHS officials have claimed through much of 2011 that the Department has sufficient authority to modify the CLASS program to make it solvent, yet internal HHS documents from 2010 cast significant doubt on those assertions.

HHS has already discussed requiring employers to participate in CLASS as a remedy for low participation, which forces a fiduciary responsibility on employers to collect premiums that could open the door to a blizzard of litigation.

In addition to the $118 billion in unfunded Medicaid mandates from the health care law, the administration of the CLASS program will largely fall on the shoulders of the states.

“This report is further confirmation that the Obama Administration willfully chose to ignore the fiscal insolvency of the CLASS program in order to achieve a political victory by pushing the president’s health care bill through Congress,” said Senator John Thune (R-S.D.), co-chair of the Working Group. “The CLASS Act is a ticking time bomb that will place taxpayers’ money at risk due to fatal flaws in the entitlement program’s design and structure. The American people had a right to know the information revealed in our report before they were put on the hook to pay for this massive new entitlement program.”

The Working Group’s full report is available below.

  • Class' Untold Story: Taxpayers, Employers, and States on the Hook for Flawed Entitlement Program - Documents uncovered through a bicameral congressional investigation show that well before passage, warning flags were raised within the Department of Health and Human Services (HHS) about the CLASS program’s sustainability in the long-term. CLASS Untold Story.pdf (821.8 KBs)

Repeal the CLASS Entitlement Act

On April 4, 2011, I introduced the Repeal the CLASS Entitlement Act which would fully repeal the Community Living Assistance Services and Supports (CLASS) Act, a new long term care entitlement program included in Obamacare. The nonpartisan Congressional Budget Office has said the $81 billion CLASS Act could end up adding tens of billions of dollars to the long-term budget.

I believe the CLASS Act threatens to put taxpayers on the hook for a massive new entitlement program. Our country’s existing entitlements are well past the point of sustainability, and we cannot add yet another program to this existing burden.

Experts predict the CLASS Act will attract enrollees who require high medical payouts, which will increase premiums for others and discourage young and healthy works from entering the risk pool.

Democrats have stated similar concerns over the CLASS Act’s sustainability. The president’s own Health and Human Services (HHS) Secretary Kathleen Sebelius has stated that the CLASS Act is “totally unsustainable,” and Senate Budget Committee Chairman Kent Conrad (D-N.D.) has called the program “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would be proud of.”

President Obama’s Assistant Secretary for Aging, Kathy Greenlee, recently admitted that premiums collected in the CLASS Act were double counted as funding the program and as savings achieved in the health care law.

In the last session of Congress, I introduced an amendment to strip the CLASS Act from the health spending bill, and the effort received a majority of the Senate’s support (51-47), but fell short of the necessary 60 vote threshold. Twelve Democrats voted to strip the program from the bill due to questions for long term sustainability.

I look forward to working with my colleagues to move this bill through Congress and fully repeal the onerous CLASS Act without delay.
Click here to read my bill, the Repeal the CLASS Entitlement Act.

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