Recently a cache of letters to President Obama were found mislaid in one of the Postal Sorting Centers abandoned by the federal government. We are carefully reviewing these letters to ensure that no information is revealed that would endanger the life of anyone. Thus, identifying references have been removed to protect the innocent.
What follows is the text of the first of those letters we are releasing.
President Barack Obama
1600 Pennsylvania Ave.
Washington D.C.
RE: No CLASS health care
Dear Mr. President;
Your administration has abandoned the Community Living Assistance Services and Support Act – the CLASS Act; essentially, because the market-based approach failed even before it started. Then, you engaged in a bipartisan effort to allow the Republicans to repeal CLASS. Yet you propose no alternative to help elderly or disabled Americans live with dignity and independently in the community? You refuse to propose an alternative because the only viable alternative is a Medicare-for-all approach, and you don’t have the courage to fight for that real change. I am deeply dissapointed.
The CLASS Act, as part of the Affordable Health Care for All Americans Act, was supposed to be a voluntary long-term care insurance choice, paid for entirely by premiums, which would help provide in-home care to disabled persons. As the Act says:
No taxpayer funds will be used to pay benefits under this provision. The program will actually reduce Medicaid spending, as people are able to continue working and living in their homes and not enter nursing homes. Safeguards will be put in place to ensure its premiums are enough to cover its costs.
CLASS was supposedly a win/win program that mimicked a market-based solution and saved the government money. Unfortunately, your administration has abandoned the program. HHS Secretary Kathleen Sebelius informed Congress last year that “…
despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time.” According to HSS, the premium for the basic plan would have been between
$235 and $391 a month for a future minimum $50 a day lifetime benefit. The conclusion of Secretary Sebelius is that the premium levels would be too high to attract any participants, except those virtually in immediate need of the program. Thus, HHS abandoned CLASS.
Mr. President, you sold us the Affordable Care for All Americans Act because CLASS “…would pay out far less in benefits than it would receive in premiums over the10-year budget window, reducing deficits by about $72 billion over that period, including about $2 billion in savings to Medicaid.” Now, that CLASS related deficit reduction is gone.
CLASS failed because it tried to mimic market-based insurance; however, it would not cherry-pick as insurance companies do to maintain profitability. As Secretary Sebelius’s report states,
Initial premiums with likely be inadequate if the enrollment of healthy workers turns out to be lower than was assumed in the pricing. Subsequent premiums would need to increase. This action would tend to drive out the healthy enrollees who can get lower premiums through private insurance. With fewer healthy enrollees, there may be more premium increases. This rate spiral can lead to program insolvency. Because of the potential for adverse selection, a number of experts have opined that the CLASS Program is unworkable.
In short, it is not possible to enroll sufficient people in the program on a voluntary basis to pay the benefits promised, especially when private insurance has lower premiums. However, the same report notes that even private market insurance options for long term care are beginning to falter, despite the fact that
enrollees tend to be white-collared workers who have available discretionary income for insurance and who are generally in better health status than the average worker.
Of course, your Republican opponents are using that deficit issue to hammer you and to discredit the entire Affordable Health Care act. However, they have proposed no viable replacement, and neither have you.
In fact, you and the republicans are playing a game together that allows Congress to repeal CLASS without having to jump the hurdle of dealing with the deficit impact. First, Secretary Sebelius dumped the program by simply stating it wouldn’t work – how she could simply ignore the law is another story. Then the Congressional Budget Office sent a letter to Senator John Thune stating: CBO will assume that CLASS will not be implemented unless there are changes in law or other actions by the Administration that would supersede the Secretary’s announcement. The effect of this letter is that Congress can repeal the CLASS program without considering the budgetary impact. This bipartisan effort is cute by half. The Secretary of HHS simply refuses to implement the law; then Republicans are able to repeal the law avoiding the strict requirement of considering a deficit increase solely because the budgetary analysis assumes the program is already gone. As the CBO said: Further, beginning immediately, legislation to repeal the provisions of law establishing the CLASS program, such as S. 720, would be estimated as having no budgetary effect.
The failure of the market-based CLASS program exposes the inadequacies of your entire approach to affordable health care. America has the most expensive health care in the developed world, yet improvements in our health over that other developed countries are not evident. Medicare is more efficient and less expensive than private insurance at providing health care. Programs like CLASS could thrive in a system that focused more on health care than on profits and the associated corporate game-playing.
The only efficient and just way to provide the important benefits of CLASS which would allow elderly and disable people the dignity of continuing to live in their own homes in the community is to provide the program under a Medicare-for-all structure. This would spread the costs of the program across a broad base and provide the benefits where needed.
Thank You Mr. President
PS: Thanks for the $40.