Obamacare Suffers First Major Setback – It’s Unsustainable Long-Term Insurance Plan

The Obama Administration suffered its first major casualty to the unpopular health care law. On Friday Health and Human Services Director Kathleen Sebelius dropped the the Community Living Assistance Services and Supports program from the program. The administration admitted their long-term insurance plan was unsustainable.
The AP reported:

The Obama administration’s signature health overhaul law, under relentless assault by Republicans, has suffered its first major casualty — a long-term care insurance plan.

The program, expected to launch in 2012, had been dogged from the beginning by doubts over its financial solvency.

Proponents, including many groups that fought to pass the health care law, have vowed a vigorous effort to rescue the program, insisting that Congress gave the administration broad authority to make changes. Long-term care includes not only nursing homes, but such services as home health aides for disabled people.

“This is a victory for the American taxpayer and future generations,”
said Sen. John Thune, R-S.D., spearheading opposition in the Senate. “The administration is finally admitting (the long-term care plan) is unsustainable and cannot be implemented.”

Known as CLASS, the Community Living Assistance Services and Supports program was a long-standing priority of the late Sen. Edward M. Kennedy, D-Mass.

Although sponsored by the government, it was supposed to function as a self-sustaining voluntary insurance plan, open to working adults regardless of age or health. Workers would pay an affordable monthly premium during their careers and could collect a modest daily cash benefit of at least $50 if they became disabled later in life. The money could go for services at home or to help with nursing home bills.

But a central design flaw dogged CLASS. Unless large numbers of healthy people willingly sign up during their working years, soaring premiums driven by the needs of disabled beneficiaries would destabilize it, eventually requiring a taxpayer bailout.

After months insisting that could be fixed, Health and Human Services Secretary Kathleen Sebelius finally acknowledged Friday she doesn’t see how.

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