So-Called "CLASS Act" Was Deemed "Totally Unsustainable" By U.S. Secretary of Health and Human Services

WASHINGTON– Congressman Leonard Lance (NJ-07) today voted in favor of legislation passed by the House Energy and Commerce Committee that would repeal a voluntary long-term care insurance program that federal officials said was too costly to implement.  The measure now moves to the House floor for consideration.

“We have a serious long-term care problem that is driving patients into bankruptcy and weighing down an over-burdened Medicaid program,” said Lance during the Committee’s consideration of the bill.  “But before we can develop bipartisan solutions to address this important issue, we must first repeal the misguided CLASS program.  Only then can we begin anew and properly address the issue of long-term care in a bipartisan and fiscally responsible manner.”

The bill supported by Lance — H.R. 1173, the "Fiscal Responsibility and Retirement Security Act of 2011" -- would repeal the Community Living Assistance Services and Supports Program or CLASS program included in the 2010 healthcare law.  The CLASS program was touted as the first-ever national program of voluntary long-term care insurance.

Lance noted that on October 14, 2011, after 19 months of review and $15 million later, the Department of Health and Human Services (HHS) Secretary Kathleen Sebelius said that financially speaking the CLASS program was, "totally unsustainable."  And U.S. Senate Budget Committee Chairman Kent Conrad (D-ND) has called the program, “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would be proud of.”

The Seventh District lawmaker added that the admission by HHS and others that the program was unsustainable should have come as no surprise.

“Many Members of Congress, independent analysts and actuaries raised concerns with the long-term solvency of the program before President Obama signed the bill into law,” Lance said. “In fact, Richard Foster, the chief actuary of the Centers for Medicare and Medicaid Services wrote in 2009, ‘Thirty-six years of actuarial experience lead me to believe that this program would collapse in short order and require significant federal subsidies to continue.’”

For his part, Congressman Leonard Lance supports replacing the health care law with common-sense fiscally responsible reforms that will lower health care costs, expand access and grow jobs. These reforms include allowing insurance to be sold across state lines, establishing high-risk insurance pools, limiting frivolous lawsuits and prohibiting insurance companies from discriminating on the basis of pre-existing conditions.  

As a member of the House Energy and Commerce Health Subcommittee, Lance is on the front lines of this effort.