CBO: Repealing CLASS healthcare law won't affect budget deficit

The Congressional Budget Office confirmed Monday that formally repealing the dormant CLASS program in the healthcare reform law would not affect the deficit.

Republicans are pressing hard to repeal CLASS. The program had accounted for roughly 40 percent of the healthcare law’s total deficit reduction — about $81 billion over 10 years, according to CBO’s most recent projections. But the Health and Human Services Department announced earlier this month that it could not make the program work and would not proceed with implementation.

CBO considers that announcement “definitive new information” and will no longer assume any revenue from the CLASS program, the budget office said in a letter to Sen. John Thune (R-S.D.). For that reason, Thune’s bill to formally repeal CLASS would not affect the deficit.

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Many Democrats, including the White House, oppose repealing CLASS. They say Congress should look for a new alternative to provide insurance for long-term care, such as nursing-home stays, rather than spend its time repealing a failed effort. But HHS officials have said clearly that the program isn’t going anywhere, giving Republicans a strong opening to undo a large — if self-contained — part of the healthcare law.

CBO’s letter to Thune also confirms that long-term care places a growing strain on Medicaid. The program is the primary federal vehicle for covering long-term care, and the aging population will create more demand for long-term care services. Before HHS announced that it was giving up on CLASS, CBO would have said repealing it would add $2 billion over 10 years in Medicaid costs, according to Monday’s letter.

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