By Daniel Weintraub
The Obama Administration, bowing to critics and mathematics, pulled the plug today on a long-term care insurance program that was part of the federal health reform bill passed last year.
The program, known as CLASS, was supposed to collect affordable premiums from individuals during their working years and then pay benefits for in-home care or nursing homes as consumers aged or became disabled.
But critics inside and outside of the government have said all along that the program would not be financially sustainable. It was impossible, they said, to charge a premium inexpensive enough to attract healthy consumers while also generating enough revenue to pay the benefits promised by the program.
Raising the projected premiums would drive away more potential customers, leaving only the sick and sending the program into a financial tailspin.
Although the program was not supposed to roll out until next year, and no one was to receive benefits for another five years after that, the administration was required to certify that the program would be self-sufficient for 75 years before it could go forward.
President Obama’s Secretary of Health and Human Services acknowledged Friday that she could not make such a certification.
For more details see this Washington Post story.