10.20.2011 0

How Much Has The Obama Administration Wasted on the CLASS Program?

By John Vinci — Americans for Limited Government recently sent a Freedom of Information Act request to the Department of Health and Human Services’ Administration on Aging to find out how much money was wasted on an Obamacare program the Obama Administration already knew would not work.

With a looming congressional hearing, the Obama Administration reported to Congress last Friday that after 19 months of work they could not find a way to implement Obamacare’s Community Living Assistance Services & Supports (CLASS) program.

CLASS is long-term disability insurance much like Aflac except that it’s government-run. The law requires CLASS to be self-sustaining. The Obama administration has admitted for some time that CLASS was unsustainable, but they insisted, contrary to a Congressional Research Service report, that they had the power to change it.

Health and Human Services (HHS) Secretary Kathleen Sebelius told congressional leaders on Friday, “[D]espite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time.”

According to an HHS report, CLASS would have to charge premiums of $3,000 per month in order to be self-sustaining. The report also admits that there are “strong arguments” that the Secretary of HHS does not have the legal authority to make necessary changes to the program.

We’re glad that the Obama Administration has chosen to suspend the CLASS program. But they were warned by their own actuary that CLASS wouldn’t work — even before it was passed into law.

In an email obtained as part of a congressional investigation, CMS actuary Richard Foster warned the Obama Administration, “Thirty-six years of actuarial experience lead me to believe that this program would collapse in short order and require significant federal subsidies to continue.”

That warning was issued July 9, 2009 — long before Obamacare passed the Senate.

Now, we want to know how much the Obama Administration wasted by disregarding the warnings of its own experts. We know that Obamacare created a $1 billion slush fund to pay for its own implementation, but how much of that money went to the Office of Community Living Assistance Services & Supports?

We’ll let you know when we get a response.

John Vinci is a staff attorney with Americans for Limited Government who specializes in health care policy.

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