Obama Administration Kills Part of Obamacare After Bicameral Pressure Spotlighted Unsustainable Model

October 14, 2011

(WASHINGTON) – The Obama Administration announced today it was killing a provision in the President’s signature health care reform program because the underlying actuarially model was unsustainable. A bicameral coalition said the provision, known as the Community Living Assistance Services and Support (CLASS) Act, was originally included to mask the true budgetary impacts of Obamacare.

House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA) and Health Care, District of Columbia, Census and the National Archives Subcommittee Chairman Trey Gowdy (R-SC) worked as part of the House and Senate Repeal CLASS Working Group to spotlight the fiscally irresponsible nature of the program.

The group released a September 15 report that revealed staff within the Department of Health and Human Services (HHS) warned that CLASS was unworkable and that senior officials at HHS may have ignored warning signs. A letter to Secretary Sebelius on September 22 documented the report’s findings and raised a series of questions about the program’s inclusion in the health care law and about whether Secretary Sebelius had the legal authority she claimed to make the program actuarially sound.

“The accumulated evidence indicates that CLASS was primarily included in Obamacare because it improved the legislation’s estimated impact on the deficit since premiums are collected for five years before any benefits are paid out. This is a budgeting gimmick that is irresponsible and the Administration was right to terminate this program,” Chairman Issa said.

“I hope today’s decision is the first of many more that lead to repeal of Obamacare, a program I and many in Congress believe is economically destructive.” Issa added.

A link to the September 15 report is available here, and a copy of the September 22 letter is here.

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