Nixing of health law's 'unsustainable' CLASS Act prompts GOP inquiry

House Republicans announced late Friday that they will be holding a hearing to find out why it took so long for the Obama administration to nix the health law's long-term care CLASS Act.

The hearing by the Energy and Commerce Committee's health and oversight panels has been scheduled for Oct. 26. The committee released a bicameral report last month accusing the administration of ignoring concerns that the program was unsustainable so it could use its projected savings to inflate the health law's deficit reduction.

"Make no mistake," Chairman Fred Upton (R-Mich.) said in announcing the hearing, "the CLASS program was tucked into the health care law to provide $86 billion in false savings, and this budget gimmick is a prime example of why Americans are losing faith in Washington. We plan to hold this hearing to get answers about why this sham was carried on for as long as it was, and what cancellation of the program means for the law's growing price tag."

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The CLASS Act would have provided daily benefits for people with disabilities if they've paid monthly premiums for at least five years. 

Doubts about its future reached a crescendo last month after the program's former actuary said the Department of Health and Human Services was killing the program and laying him off. At the time, the Obama administration dismissed the allegations as a "rumor" - even though it turned out the White House had asked Democratic Senate appropriators not to set aside any money for the program in the 2012 spending bill.

"While the staff of the CLASS office has been reduced, reports that the CLASS office is closing are not accurate," HHS said in a statement at the time. "We are continuing our analysis of this program."

The CLASS Act's savings represent about 40 percent of the health law's $210 billion in deficit reduction over a decade. Scrapping the program makes it easier for Republicans to repeal the entire law, as every presidential candidate has vowed to do.

"It is worth remembering that the CLASS Act is only one of the unwise, unsustainable components of an unwise, unsustainable law," Senate Minority Leader Mitch McConnell (R-Ky.) said Friday. "We should repeal the CLASS Act and the rest of the health spending law and replace it with the type of common-sense reforms that lower costs and Americans support."

The administration says the CLASS Act is a stand-alone benefit whose elimination has no impact on the rest of the law.

"The CLASS program is a unique, stand-alone program," an administration official said. "Long term care is important and it's something we are committed to addressing, but drawing conclusions between this and other parts of the law simply doesn't make sense."

Sam Baker contributed to this report.