HHS spent $5 mln on unworkable Obamacare program

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Politics,Beltway Confidential,Philip Klein

Despite advanced warning that it was unworkable, the Department of Health and Human Services spent nearly $5 million trying to figure out a way to implement Obamacare's long-term care program before suspending it earlier this month, an HHS official told Congress this morning.

Earlier, Kathy Greenlee, assistant Secretary for Aging at HHS, told the House Energy and Commerce Committee that despite over 19 months of work, "we have not identified a way to make CLASS sustainable, legal and attractive to potential buyers at this time."

But the department could have saved a lot of time and money had it listened to Richard Foster, the chief actuary of the Centers for Medicare and Medicaid Services at HHS, who along with others raised alarms well before President Obama had signed the national health care bill into law in March 2010.

Foster warned in May 2009 that the CLASS proposal “doesn’t look workable.” That July, he was even more emphatic: “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.”

Yet Democrats made the program law anyway, and HHS spent millions to figure out the obvious.

CLASS had a central design flaw. The idea was for a self-sustaining program in which individuals pay out premiums and receive benefits down the road. But models showed that there was no realistic scenario under which the program would attract enough participants to keep the program sustainable over time.

Though HHS has publicly acknowledged this reality, the program remains, to use Halloween term, undead. Greenlee wouldn't give a simple "yes" or "no" answer when asked whether the program was shut down, saying work had stopped and staff had been reassigned. At other points, she used the term "suspended."

The only way to completely wipe the program off the books would be to formally repeal it legislatively.

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