February 14, 2012
My View: Tierney, Dems won’t let discredited CLASS Act die
By Richard Tisei

Many speak about a broken Washington, D.C., one that cries for new leadership. The CLASS Act is living proof of the problems that plague our capital and why it is time for a change in Congress.

The CLASS Act (“Community Living Assistance Services and Supports”) was passed as part of ObamaCare and hailed as a long-term care insurance program that would help seniors maintain independence at home and avoid nursing home placement.

At the time, congressional leaders promised that every senior in the nation would be eligible for this new government-run program and that this new benefit would be financed solely by enrollee premiums without federal subsidy. Seniors would pay premiums for five years before receiving benefits of up to $50 per day to pay for homemaker and other services. In addition, low-income enrollees would pay a premium of only $5 per month, and be subsidized by those paying full premiums.

If it sounded too good to be true, it was!

Even before being passed into law, Richard Foster, chief actuary of the Center for Medicaid and Medicare Services, reviewed CLASS for financial solvency. In a letter sent to Congress on Jan. 8, 2010 — 21/2 months before ObamaCare became law — Foster stated that CLASS faced a “significant risk of failure.” He predicted that by 2025, benefit payments would exceed premium receipts, and CLASS would experience an “insurance death spiral” with premiums having to increase at such a high rate to pay for obligated benefits, that voluntary enrollment would decline and the program would fail.

So from its inception, CLASS was projected to become insolvent, and those paying premiums would be at great risk of losing everything they paid in. (Just imagine the tirades and congressional investigations that would take place if a private insurance company attempted to sell equally shaky policies to seniors!)

And, of course, once the program went broke there is no doubt that taxpayers would be on the hook to pay billions to bail out what essentially would be a new entitlement.

So with all of its problems, why was CLASS included as part of Obama-Care?

At the time, Speaker Nancy Pelosi and her allies, including Congressman John Tierney, D-Salem, were desperate to get ObamaCare enacted. But they needed to somehow show that passage of ObamaCare would reduce the federal deficit.

Here’s how CLASS played a role: For the first five years of CLASS, only premiums would be collected and no benefits paid. That $38 billion collected in premiums allowed the Congressional Budget Office (CBO) to “score” ObamaCare as creating a surplus rather that a deficit.

What’s worse is that the CBO double-counted the $38 billion — first as Medicare “savings” that reduced the deficit, and then again as $38 billion available to pay future CLASS benefits.

Only in Washington is money routinely counted twice. Yet every American knows you can’t use the same money twice, once to pay the mortgage and again to make the car payment!

On Oct. 14, 2011, after spending a small fortune to set up a CLASS office and conduct extensive analysis, President Obama’s Health and Human Services secretary, Kathleen Sebelius, told Congress what everyone knew in January 2010, namely that HHS could not “see a viable path forward for CLASS.” In addition, the Congressional Research Service informed members that if CLASS was not repealed, it could expose the government to legal liability.

CLASS was officially dead, or so one would think.

Recently, the House took up H.R. 1173, a bill to repeal CLASS. It was disappointing to see that our congressman, Tierney, voted to go forward with the program despite conclusive evidence that seniors would lose paid premiums and CLASS would need a government bailout at great cost to taxpayers.

With Medicare and Social Security headed toward insolvency, and the country just about broke, it is mind-boggling that anyone would be advocating for a new entitlement program that even the Obama administration says we can’t afford and will not work.

But the story isn’t over. H.R. 1173 now heads to the Senate where the majority leader, Harry Reid, will never let it come up for a vote. Why? Because the president must be re-elected at any cost, and repeal of CLASS could start the unwinding of ObamaCare, the president’s signature legislation.

I am a strong advocate of home care, and in fact was named legislator of the year by the Home Care Association of Massachusetts when I served in the state Senate.

Our seniors and the American people deserve better. We can start by electing leaders who will be honest, not use financial gimmickry to justify programs, and work to put our nation back on solid financial footing.

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Richard Tisei of Wakefield is seeking the Republican Party’s nomination to take on incumbent Congressman John Tierney this fall.

This OP/ED originally appeared in the Salem News and on SalemNews.com.