Avik Roy On Repealing The CLASS Act

You may recall that an earlier article reported on the demise of the CLASS act portion of Obamacare back in October. Actually, CLASS was not really killed. Rather, it was sort of frozen in carbonite by HHS. Like Han Solo at the end of The Empire Strikes Back, it's "alive and in perfect hibernation." Of course, that was not the end of Han Solo. So too, the Congressional Research Service has warned that the CLASS could be reinstated by a court decree if it is not formally repealed from the law. Forbes' Avik Roy reports:

Why, you might ask, should Congress bother to repeal CLASS, given that Sebelius has suspended its implementation? Because, according to the Congressional Research Service, courts could force her to implement the new entitlement, despite the fact that it will blow up the deficit.

According to the text of the Affordable Care Act, Secretary Sebelius is required to “designate a benefit plan as the CLASS Independence Benefit Plan” by October 1, 2012. Back in November, the House Energy and Commerce Committee asked CRS to evaluate the question: based on this language, could advocacy groups file suit against HHS for failing to implement the program? Would a court be likely to side with these plaintiffs? According to CRS, it’s a real possibility.

“If the Secretary does not designate a plan by October 1, 2012,” write the CRS staffers, “this failure to act would appear to be the type of agency action that could be challenged under the judicial review provision for agency action unlawfully withheld.” A court could grant deference to Sebelius’ finding that the program was unsustainable, but it could also force implementation of CLASS by “declaring the Secretary in violation of 5 U.S.C. § 706(1) or issuing a write of mandamus to compel agency action, thus requiring the Secretary to renew her efforts to create a plan that is consistent with the statutory requirements.”

CLASS was halted not because of some outbreak of common sense at HHS, but due to its inability to pass the proviso placed into the law by Senator Gregg that HHS provide "an actuarial analysis of the 75-year costs of the program that ensures solvency throughout such 75-year period." HHS couldn't do it. Whither the same proviso applied to the whole of Obamacare?

Avik also quotes Democrat Tom Harkin, who admits that CLASS can't work, but has another prescription for the cure:

“It’s not going to be implemented,” he told National Journal. “But we need something like it…the problem with CLASS is that it’s voluntary.” That is to say, unless there is a federal individual mandate forcing all Americans to buy long-term care insurance, a government system is unworkable.

Well, that did not take long. Seems like "individual mandates" are all the rage. Hopefully, the Supreme Court will shut that down this June. But, Avik notes that the costs of long term care is something that the majority of Americans are woefully unprepared to absorb. He's right about that:

“As a physician, I treated hundreds of patients who needed long-term care, including ones with Alzheimer’s,” Boustany wrote in an op-ed for Politico. “More than 13.5 million seniors could have this disease by 2040. Middle-class families remain dangerously unprepared for these costs. Some people will likely spend more than $100,000 on care.

The private insurance market has a myriad array of LTC products that can help defer or address these costs. It just so happens that we sell these!