From: United States Republican Policy Committee
September 15, 2011

The CLASS Act’s Untold Story

The report of the CLASS Act Working Group was publicly released this morning, and can be found online here. The report analyzes internal HHS [Health and Human Services] documents showing the problems with CLASS that the Administration ignored in the rush to enact Obamacare:

  • Senior HHS officials publicly pronounced the CLASS program solvent in the fall of 2009, at the same time career officials were calling CLASS “a recipe for disaster”;
  • In January 2010, HHS raised serious concerns that the CLASS program created in PPACA would be unsustainable – yet Secretary Sebelius and HHS staff never expressed those concerns publicly prior to the bill’s passage; and
  • Secretary Sebelius and other HHS officials have claimed through much of 2011 that the Department has sufficient authority to modify the CLASS program to make it solvent – yet internal HHS documents from January 2010 show that HHS drafted a legislative “fix” (which was never adopted) precisely because they were worried that the Secretary did NOT have sufficient authority to change the program.

Unfortunately, the damage associated with CLASS will extend not just to the federal government, as the report reveals that states will be saddled with massive new mandates. As a reminder, states already face budget shortfalls of $175 billion, and mandates from Obamacare’s new Medicaid requirements of at least $118 billion. On top of all that, states are about to get hit with separate new requirements under the CLASS program that, in the words of HHS officials, will “create significant new burdens on the states” trying to comply with “fatally flawed” deadlines.

Businesses could also face massive new mandates as a result of CLASS; the report demonstrates a strong desire by Administration officials to pass the costs of the program on to employers. To raise participation, HHS officialsrepeatedly proposed imposing mandates on businesses requiring them to participate in CLASS. At a time when the economy remains sluggish and employers are reluctant to hire, these new requirements could saddle businesses with additional fiduciary responsibilities, leading to potential lawsuits for large and small employers alike.

In March 2010, then-Speaker Nancy Pelosi famously claimed we had to pass the bill so the American people could find out what was in it. Today’s report finally allows the American people to find out what is in the CLASS Act – and examine the damage created by Democrats’ headlong rush to enact Obamacare.

RPC Analyst Chris Jacobs