In yet another classic Obama administration Friday night news dump, the administration abandoned the CLASS Act last week. The progam was a major component of the Obamacare law, intended to address long-term care issues. While long-term care costs are a significant problem, the CLASS Act was a disingenous budget gimmick from the start.
It was designed as a voluntary insurance program run by the government. But the way the CLASS Act was to be implemented was problematic. The program was set to collect premiums for five years before it began paying out benefits, taking in a lot more money than it would pay out over the initial 10-year window the Congressional Budget Office (CBO) uses to determine how much a piece of legislation will supposedly cost.
The CLASS Act made no actuarial sense beyond that narrow budget window, and the White House was forced to concede as much and kill the program, along with the $53 billion in alleged deficit savings it was said to produce.