Republican critics of the CLASS Act–the national long-term care insurance program that was included in the 2010 health law– have concocted a phony scandal about how the law passed. As I have written often, CLASS is deeply flawed (though well-intended). But there is a big difference between a poorly executed idea and a scandal.
In a report that is as partisan as it is breathless, a group of GOP lawmakers who call themselves the Repeal CLASS Working Group (at least you know where they stand) pretend they have found shocking evidence that the Obama Administration knew CLASS would fail before it included the idea in the health reform law. In the words of Senator John Thune (R-SD), “The Obama Administration willfully chose to ignore the fiscal insolvency of the CLASS program in order to achieve a political victory by pushing the president’s health care bill through Congress.”
Further, the report says, “Documents uncovered through a bicameral congressional investigation show that well before the law’s passage, warning flags were raised within the Department of Health and Human Services (HHS) about the CLASS program’s sustainability in the long-term.”
Well, no kidding. The report is built almost entirely on the conclusion of Medicare chief actuary Richard Foster that CLASS would be unsustainable. The trouble with this conspiracy theory is that Rick made no secret of his views in 2009, which he outlined in widely distributed public documents. Heck, I wrote about Rick’s warnings almost two years ago.
It is certainly true that the White House and congressional supporters of CLASS disagreed with Foster and chose to use more favorable Congressional Budget Office estimates of how many people would buy the insurance. We knew that too back in 2009.
But was this a scandal, as the authors of this trumped up investigation claim? The problem is nobody had any idea in 2009 whether Rick’s projections or the CBO’s (or any of the other estimates floating around at the time) were correct. In fact, we still don’t know.
What’s almost amusing about this little comedy is that Foster was last in the headlines in 2004 when he warned the Bush Administration that its proposed Medicare Part D drug benefit would be fiscally unsustainable. At the time, Bush political appointees ordered him to stop sending information to Congress and he was sharply criticised by some of the same lawmakers who are praising him today. Then, many of us thought Bush was making a terrible and cynical mistake to ignore Rick’s predictions of how much the drug benefit would cost taxpayers. But, you know what, Rick was wrong. It turned out Part D’s cost was far lower than he estimated and much closer to CBO’s estimates.
Rick Foster is a scrupulously honest, extremely competent actuary. But with CLASS he was asked to estimate the participation rates for a program that would be unlike anything the government has ever offered before. He made an educated guess. The White House and the Democratic leadership in Congress chose to ignore it.
One day soon, we may see a specific CLASS insurance plan from the Obama Administration, and we’ll find out how many people do buy the policies. We will, that is, if congressional critics don’t kill the program first.
My own sense is that premiums will be lower than Foster projects, but still too high for CLASS to work. This makes the White House and congressional Democrats guilty of poor policy judgment. It was dumb, but not a scandal.
Aging Baby Boomers and their families would all be far better off if congressional critics of CLASS sat down with the White House to design a national long-term care insurance program that does work. Instead, it seems, they prefer to invent imaginary scandals.