Health reform implementation

Internal email says controversial CLASS health office to close

The Obama administration is putting a controversial part of the 2010 healthcare reform law on hold for at least a year, sources tell The Hill, leaving in doubt whether the benefit for disabled Americans will ever take effect.

The White House asked Senate Democrats not to provide any funding for the long-term care program for the next fiscal year, an appropriations staffer told The Hill. That move is in sharp contrast to the administration’s 2009 position on Sen. Edward Kennedy’s (D-Mass.) long-term care bill. At that time, President Obama called it an “innovative” program that “would expand resources available to individuals and families to purchase long-term services and supports to enable them to remain in their own homes in the community.”

{mosads}But Republicans and even a few Democrats contend that Community Living Assistance Services and Support (CLASS) Act provisions would be a budget-buster. 

The flurry of activity on the issue started Thursday morning when the administration’s CLASS Act actuary said the Department of Health and Human Services (HHS) was closing down the office charged with implementing the program and reassigning its staff.

“They just said they would take a pause,” Robert Yee told The Hill. “Technically, Kathy Greenlee, the administrator for CLASS, is still in charge. But the staff, eight people in the office as of last week, will not be working on CLASS. They have been, or are in the process of being, reassigned.”

The White House spent Thursday trying to downplay the controversy after Yee announced his departure from the office in an email to colleagues that was quickly leaked to reporters.

The administration called Yee’s allegations a “rumor” but did not respond to repeated requests to explain on the record what’s happening with the program, and how it’s supposed to go forward without any funding.

“While the staff of the CLASS office has been reduced, reports that the CLASS office is closing are not accurate,” HHS said in a blanket statement to the media. “We are continuing our analysis of this program. As we have said in the past, it is an open question whether the program will be implemented. A CLASS program will only be implemented if it is fiscally solvent, self-sustaining and consistent with the statute.”

 The program has been dogged by controversy throughout the 2009-2010 healthcare reform debate, and has continued to face persistent criticism from Republicans, who have called it an unsustainable “Ponzi scheme.” 

Senate Budget Committee Chairman Kent Conrad (D-N.D.) voted for healthcare reform, but has long been skeptical of the CLASS provisions.

Puzzled Democrats on Capitol Hill declined to comment on the administration’s move on the CLASS Act, wanting to first learn more about the rationale behind it.

Yee, a Fellow of the Society of Actuaries from California, joined HHS in February. He said HHS officials told him earlier this month that they were ending his contract because they had no other jobs for him, while his CLASS Act Office colleagues — all long-term federal employees — would be reassigned.

Obama had initially requested $120 million for the CLASS Act program for the fiscal year starting Oct. 1. Recently, though, the administration asked the Appropriations Health subcommittee to zero out the funding, according to the office of panel Chairman Tom Harkin (D-Iowa).

“The committee has not provided funding for this activity in recognition that its implementation has been delayed,” says the report for the fiscal 2012 HHS spending bill that Senate appropriators approved Wednesday evening.

The CLASS Act is a form of long-term care insurance in which beneficiaries who pay monthly premiums for at least five years can get daily payments to help them with their daily living activities if they become disabled. 

 Medicare does not cover long-term care, and only about 8 percent of Americans have private insurance. As a result, many seniors end up having to divest themselves of their assets to become eligible for Medicaid, placing an unsustainable strain on the program for low-income Americans.

The CLASS Act requires beneficiaries to start paying premiums next October, but Yee questioned how that’s supposed to happen without an office tasked with setting rates and collecting payments.

“Legally, this is a government program — it should be run by the government,” he said. “If you don’t have a plan, how are you going to collect premiums?”

The uncertainty has left advocates scratching their heads.

Connie Garner, a former Kennedy staffer and architect of the CLASS Act who’s now trying to build support for it in the private sector, said the real issue isn’t whether the office is being shut down, but whether the administration is committed to making the program work.

She pointed out that the program was created by law, and that the administration can’t just terminate it.

“The 275 groups that want to see some change aren’t going to let that happen,” she told The Hill.

Asked if the administration had chewed him out for letting the cat out of the bag, Yee said it didn’t matter.

“Today’s my last day,” he said. “I’m going home.”

This story was originally posted at 11:36 a.m. and last updated at 8:05 p.m.

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