U.S. Senator Richard Shelby (R-Ala.), Ranking Member of the Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies (Labor/HHS), today was joined by Senator John Thune (R-S.D.), Chairman of the Republican Policy Committee, in writing a letter to Health and Human Services Secretary Kathleen Sebelius regarding the implementation of the Community Living Assistance Services and Supports (CLASS) program.
The CLASS program is a long-term insurance entitlement authorized by the Affordable Care Act and already acknowledged by the administration to be fiscally unsustainable. To date, Congress has not appropriated funds for the CLASS program. However, the Obama administration is moving forward to use taxpayer dollars to fund a promotion campaign for the program. The Shelby/Thune letter questions the appropriateness of advertising a program deemed "immediately insolvent" by Secretary Sebelius and requests an accounting of specifically how much of the American taxpayers' money will be used to promote a program that has not yet been funded by Congress.
Senator Shelby made the following statement:
"It is absurd to use taxpayer-funded advertisements to promote a taxpayer-funded entitlement destined for a taxpayer-funded bailout. The use of taxpayer money for unworkable programs such as this is completely unjustifiable in any circumstance, but particularly in light of our current fiscal difficulties."
Senator Thune made the following statement:
"Despite the fatal flaws of the CLASS Act, the Obama administration continues to push ahead in implementing this unsustainable entitlement program. The Department of Health and Human Services owes the American taxpayer some honest accounting of where the administration is in the implementation process of the CLASS Act, and why they continue to ignore all of the red flags raised about the massive new entitlement program that is being created. I am greatly concerned about the sustainability of this program and look forward to receiving answers from Secretary Sebelius."
Forewarnings about the fiscal insolvency of the CLASS program were recognized prior to its authorization as part of the Affordable Care Act and continue as Congress debates the program's inclusion in the Fiscal Year 2012 Labor/HHS Appropriations bill.
"This program is immediately insolvent" -- Secretary Kathleen Sebelius discussing the program's fate should only the disabled community enroll in a testimony before Ranking Member Shelby at the FY12 budget hearing in the Health and Human Service budget in March 2011.
"There is a very serious risk that the problem of adverse selection will make the CLASS program unsustainable." -- Richard Foster, CMS Chief Actuary, CMS, "Estimated Financial Effects," April 22, 2010, page 15.
"[The CLASS program] is viewed by many experts as financially unsound Sustaining the system over time will require increasing premiums and reducing benefits to the point that the program is neither appealing to potential customers nor able to accomplish its stated function...To the extent this is not possible, we advise it be repealed." - The National Commission on Fiscal Responsibility and Reform, December 2010, page 38.