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Administration will Not Move Forward with CLASS Act at this Time

Health and Human Services (HHS) Secretary Kathleen Sebelius announced last week that HHS will postpone implementation of the CLASS Act indefinitely. The announcement reignited an old battle over the program, with Republicans calling for the CLASS Act’s repeal and the White House opposing the effort.

HHS Secretary Kathleen Sebelius announced that the Administration would be halting implementation of the CLASS Act in a letter to Congress.  “For 19 months, experts inside and outside of government have examined how HHS might implement a financially sustainable, voluntary, and self-financed long-term care insurance program…” wrote Sebelius. “But despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time.” The letter was accompanied by a report, developed by the Offices of CLASS, ASPE, and the General Counsel, that included an actuarial analysis, a study of legal risks, and an overview of marketing factors that would affect the implementation of the CLASS Act. The reports’ authors dissected several versions of the CLASS plan, each with varying degrees of vulnerability to legal challenges and solvency problems.

In response to the announcement, the Subcommittee on Oversight and Investigations and the Subcommittee on Health will conduct a joint hearing, CLASS Cancelled: An Unsustainable Program and Its Consequences for the Nation’s Deficit,  next Wednesday on the program. Republicans have also responded to Sebelius’ announcement through a renewed effort to repeal the CLASS Act, an effort made easier by a new Congressional Budget Office (CBO) report that claims repealing CLASS would have no impact on the federal budget.

Despite Kathleen Sebelius’ statement, the White House has announced that it opposes a full repeal of the CLASS Act.  "Repealing the CLASS Act isn't necessary or productive,” said White House spokesman Nick Papas. “What we should be doing is working together to address the long-term care challenges we face in this country." Although Papas would not say if the President would veto a repeal effort, the statement further confused advocates for the CLASS Act, many of whom are still fighting for CLASS to be implemented.

Read the full actuarial report: A Report on the Actuarial, Marketing, and Legal Analyses of the CLASS Program and
 Secretary Kathleen Sebelius’ letter to Congress about the program’s indefinite postponement. Also read the Associated Press article: White House Waffling on Long-Term Care Plan?

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