CLASS abandoned

The CLASS program in Obamacare is an obscure provision that would create a long-term care insurance program. The provision was important because it exploited Obamacare’s usual accounting gimmick (comparing ten years of revenue to just five years of expenses) to generate an (illusory) $70 billion surplus over ten years. It thus helped shift the all-important (to nervous Democrats) overall price into the black.

But the program was never designed to work. Medicare’s chief actuary wrote (as quoted by Power Line):

I can’t see how there would be enough workers participating to cover the selection costs for those with existing [activities of daily living] limitations plus the costs for the internal subsidies for students and low-income persons. 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.

And sure enough, the Obama administration seems to be shutting the program down. Its only function was to coax reluctant Democrats into voting for Obamacare, so its work is done.

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