CLASSy: Administration Ignored Warnings From Own Analysts In Effort To Get Expensive Boondoggle Passed Into Law

This is actually Major Scandal 3, because it broke yesterday. Drew's post about the general being asked to change his testimony to help a donor's company is Major Scandal 4.

3:

In the thick of the debate over President Barack Obama’s health care reform bill, administration officials ignored warnings that one of its most controversial provisions was financially unsustainable and could leave taxpayers on the hook for billions of dollars.

According to a report released Thursday by a working group of congressional investigators, officials inside the Department of Health and Human Services ignored numerous red flags about the Community Living Assistance Services and Supports program (CLASS) — and in some cases the officials went to work figuring out how to hide them.

...

When the Congressional Budget Office scored the program, analysts said it would account for $70 billion in deficit reduction over ten years. However, that was because those enrolled in the program won’t be able to start receiving benefits until five years into that ten-year period.

The program’s architects assumed it would take in more money than it paid out. And the $70 billion in savings became a crucial selling point that helped secure the bill’s passage.

The congressional working group, however, found that since the program is voluntary it would likely see more unhealthy participants than healthy ones. That means more payouts and less revenue. In the long run, that imbalance puts the CLASS program on a path to financial disaster.

I don't want to steal everything from the Daily Caller, but Medicaid's chief actuary wrote this problem would result in "an insurance deaths spiral."

Thanks to JohnE.

posted by Ace at 12:31 PM

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