The U.S. House of Representatives voted 267 to 159 today to repeal the CLASS Program, a component of the Patient Protection and Affordable Care Act.
Not one Republicans voted to keep CLASS, and 23 Democrats crossed party lines to vote for H.R. 1173, the "Fiscal Responsibility and Retirement Security Act of 2011."
The bill's chances in the Senate, which is controlled by Democrats, are far less certain.
H.R. 1173, sponsored by Rep. Charles Boustany, R-La., would repeal CLASS, aka, the Community Living Assistance Services and Supports program—a government-run voluntary long-term care (LTC) program that scored by the Congressional Budget Office as cutting the deficit by more than $80-plus billion over a 10-year period.
Lawmakers included the CLASS program in the act to honor the late Sen. Edward Kennedy, D-Mass., who had worked for decades to try to improve the U.S. LTC safety net. But critics in the LTC insurance community argued from the beginning that the combination of voluntary participation and loose underwriting rules would make the program unsustainable.
The CLASS program was due to begin enrollment in October 2012, however, U.S. Department of Health and Human Services Secretary Kathleen Sebelius seemingly halted its implementation in an letter to Congress sent in October 2011 after determining they could not meet the statutory requirement that the program be actuarially sound over 75 years. At that point it was said that the actuaries had left the building, figuratively and literally.
The decisive House repeal brought immediate reaction from the agent and producer lobby as well as from consumer groups.
The parameters of the program were such that only "those who were already in need of benefits would likely be attracted to apply, causing premiums to rise to the point where healthy individuals would be discouraged from enrolling thereby creating the classic adverse selection scenario," the Big I said. This lobbying group and others said the act would lead to a death spiral that would drive the program into insolvency.
"Today's action by the House was an important step toward full repeal of this ill-advised program and we urge the Senate to follow suit," says Charles Symington, Big "I" senior vice president of government affairs.
