PDA

View Full Version : Another Big Fact The Obama Administration Hid To Pass Obamacare




Swordsmyth
07-30-2018, 09:12 PM
During the early years of the Obama administration, ASPE lay at the heart of the failure of the CLASS Act, a $70 billion Obamacare program. As a congressional staffer conducting oversight of the CLASS Act (https://archives-energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/analysis/CLASS/20110915CLASS.pdf) in 2011-12, I reviewed thousands of pages of e-mails and documents from the months leading up to Obamacare’s passage. Those records strongly suggest that ASPE officials, including Frank, withheld material facts from Congress and the public about CLASS’s unsustainability, because full and prompt disclosure could have jeopardized Obamacare’s chances of passage.


The Community Living Assistance Services and Supports program, or CLASS for short, intended to provide a voluntary insurance benefit for long-term care. Included as part of Obamacare, the program never got off the ground. In October 2011, HHS concluded (https://aspe.hhs.gov/report/report-actuarial-marketing-and-legal-analyses-class-program) it could not implement the program in an actuarially sound manner; Congress repealed the program entirely as part of the “fiscal cliff” deal enacted into law in the early days of 2013.
CLASS’s prime structural problem closely resembled that of the Obamacare exchanges—too many sick people, and not enough healthy ones. Disability lobbyists strongly supported the CLASS Act, hoping that it would provide financial support to individuals with disabilities. However, its voluntary nature meant that the more people already with disabilities enrolled and qualified for benefits, the higher premiums would rise, thereby discouraging healthy people from signing up.


Given these structural problems, the Obama administration had lukewarm support (https://khn.org/news/sebelius-talks-class-act/) for the CLASS Act from the start. Sen. Ted Kennedy (D-MA) stood as its longtime champion, and with Kennedy fighting an ultimately unsuccessful battle with cancer, few wanted to thwart what Kennedy viewed as a personal legacy issue.
Moreover, although actuarially questionable in the long-term, CLASS’s structure provided short-term fiscal benefits that aided Obamacare’s passage. Because CLASS required a five-year waiting period to collect benefits, the program would generate revenue early in its lifespan—and thus in the ten-year window budget analysts would use to score Obamacare—even if it could not maintain balance over a longer, 75-year timeframe.
This dynamic led the Senate Budget Committee Chairman Kent Conrad (D-ND), to dub CLASS (http://www.washingtonpost.com/wp-dyn/content/article/2009/10/27/AR2009102701417.html) “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would have been proud of.”

A report (https://archives-energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/analysis/CLASS/20110915CLASS.pdf) I helped draft, which several congressional offices released in September 2011—weeks before HHS concluded that program implementation would not go forward—highlighted concerns raised within the department during the debate on Obamacare about CLASS’ unsustainable nature. For instance, in September 2009, one set of talking points prepared by ASPE (https://archives-energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/analysis/CLASS/ExhibitL.pdf) indicated that, even after changes made by Congress, CLASS “is still likely to create severe adverse selection problems”—i.e., too many sick people would enroll to make the program sustainable.


In an e-mail exchange this weekend, I asked Frank about these strong internal statements about CLASS, and how they squared with his public comments. At the time, Frank served as the deputy assistant secretary of ASPE charged with long-term care policy. HHS’s own report (https://aspe.hhs.gov/report/report-actuarial-marketing-and-legal-analyses-class-program) into the program notes that he attended nearly every single meeting with outside stakeholders. In other words, he ran point on CLASS, and supervised most of the activity within the department on the issue.
Frank told me that, during one public speech in October 2009, “I spent about half my time setting out the problems with CLASS that needed to be fixed.” He did indeed highlight some of the actuarial challenges the CLASS program faced. But Frank’s remarks (https://kaiserfamilyfoundation.files.wordpress.com/2013/01/102009_kff_class_act_transcript_final.pdf), at a Kaiser Family Foundation event, closed thusly:

We’ve, in the department, have modeled this extensively, perhaps more extensively than anybody would want to hear about [laughter] and we’re entirely persuaded that reasonable premiums, solid participation rates, and financial solvency over the 75-year period can be maintained. So it is, on this basis, that the Administration supports it that the bill continues to sort of meet the standards of being able to stand on its own financial feet. Thanks.
Frank told me over the weekend that his comments “came at the end of my explaining that we were in the process of addressing those issues” (emphasis mine). But Frank actually said that the Obama administration was “entirely persuaded” of CLASS’ solvency, which gives the impression not that the department had begun a process of addressing those issues, but had already resolved them.
Frank’s public comments notwithstanding, ASPE had far from resolved the actuarial problems plaguing CLASS. Two days after his speech, one of Frank’s employees sent around an internal e-mail (https://archives-energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/analysis/CLASS/ExhibitM.pdf) suggesting that the CLASS Act “seems like a recipe for disaster.”


Frank and the employees at ASPE continued to try and make good on their promises to fix the CLASS Act, but they ran up against too many obstacles—and a legislative crunch. By late November and December 2009, the Social Security actuary’s office had run several analyses (https://archives-energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/analysis/CLASS/ExhibitO.pdf) of the program, all of which showed significant problems maintaining actuarial balance.
In response to these new analyses, HHS and ASPE came up with a package of technical fixes (https://archives-energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/analysis/CLASS/ExhibitQ.pdf) designed to make the CLASS program actuarially sound. One section of those fixes noted that “it is possible the authority in the bill to modify premiums will not be sufficient to ensure the program is sustainable.”
However, the proposed changes came too late:


No changes to the CLASS Act made it into the final version of Obamacare, which then-Majority Leader Harry Reid (D-NV) filed in the Senate (https://www.congress.gov/amendment/111th-congress/senate-amendment/3276) on December 19, 2009.
The election of Scott Brown (R-MA) to replace the late Kennedy in January 2010 prevented Democrats (https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2011.1222) from fixing the CLASS Act through a House-Senate conference committee, as Brown had pledged to be the “41st Republican” in the Senate who would prevent a conference report from receiving a final vote.
While the House and Senate could (and did) pass some changes to Obamacare on a party-line vote through the budget reconciliation process, the Senate’s “Byrd rule (http://thefederalist.com/2017/05/11/need-know-budget-reconciliation-senate/)” on inclusion of incidental matters in a budget reconciliation bill prevented them from addressing CLASS.

The White House’s own health care proposal (https://khn.org/news/obama-health-care-proposal/), released in February 2010, discussed “a series of changes to the Senate bill to improve the CLASS program’s financial stability and ensure its long-run solvency.” But as HHS Secretary Kathleen Sebelius later testified (https://www.finance.senate.gov/imo/media/doc/75792.pdf) before the Senate Finance Committee, the “Byrd rule” procedures for budget reconciliation (http://thefederalist.com/2017/05/11/need-know-budget-reconciliation-senate/) meant that those changes never saw the light of day—and could not make it into law.

More at: http://thefederalist.com/2018/07/30/heres-another-big-fact-obama-administration-hid-pass-obamacare/

phill4paul
07-30-2018, 09:14 PM
Another? They hid everything. Ya gotta pass it to see what's in it.