Sep 23 2010
Today, Dr. Coburn introduced the Long-Term Care Bailout Prevention Act (S. 3829) with Sens. Graham, Chambliss, McCain and Cornyn. This bill would strike the CLASS Act (long-term care) provision from the recently passed federal health care overhaul (Patient Protection and Affordable Care Act, Public Law Number 111-148). Dr. Coburn’s support for repealing the damaging CLASS provision is part of his fundamental support for repealing the health care overhaul in its entirety. (Although the bill as it stands now does not include funding that is offset, Dr. Coburn is committed to working with the sponsors of S.3829 to ensure the bill is paid for in its entirety.)
While Dr. Coburn supports improvements to long-term care, the CLASS Act provisions must be repealed in their entirety. While the CLASS program is projected to create an initial surplus that is used to pay for the programs created by the Patient Protection and Affordable Care Act, the Chief Actuary of the Centers for Medicare & Medicaid Services (CMS) has stated that by 2025, benefit payments will exceed premium revenues and the CLASS program will run deficits. The CMS Chief Actuary has said, ‘‘In general, voluntary, unsubsidized, and non-underwritten insurance programs such as CLASS face a significant risk of failure as a result of adverse selection by participants.’’ According to an August 2010 survey by the National Business Group on Health, only 3 percent 10 of employers would participate in the CLASS program. Because of the downward spiral created by adverse selection, the program could go bankrupt and the Secretary of Health and Human Services could be forced to drastically increase premiums to unaffordable levels or taxpayers could be asked to bailout the CLASS program. A Democratic Senator even referred to the CLASS’s financing structure as a “Ponzi scheme.”
Click here for the bill text of the Long-Term Care Bailout Prevention Act (S.3829).