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Public Statements

Town Hall - Reject CLASS 2.0 and Address Medicaid's Looming LTC Crisis


Location: Washington, DC

By Rep. Marsha Blackburn and Rep. Phil Gingrey

As we work to reign in wasteful spending and improve retirement security, our nation cannot afford to overlook Medicaid's long-term care (LTC) financing crisis.

We're completely unprepared for the coming "age wave." More than 15 million Americans will be 85 years or older in 2040. While 7 in 10 seniors will need some type of Long Term Care (LTC) during their lives, only 1 in 10 seniors has private LTC insurance coverage. Almost 14 million seniors could suffer from Alzheimer's in 2040, and the annual rate for a private nursing home room continues climbing, reaching $81,030 in 2012.

Research shows many Americans mistakenly believe they have LTC coverage through Medicare when they do not. The misinformation puts their retirement plans at risk. Without change, millions of middle-class baby boomers will turn to a welfare program, Medicaid, to finance these needs.

The authors of Obamacare pretended to solve Medicaid's LTC financing problems by creating the Community Living Assistance and Support Services (CLASS) program, a national entitlement, promising a daily cash benefit to disabled Americans. The program failed because liberals promised the impossible: a self-funded, fiscally-sound program that prohibits underwriting without forcing healthy Americans to participate. As it fell apart, Senator Tom Harkin criticized CLASS because "it's voluntary."

Less supportive Democrat Senators called it a "Ponzi scheme." And, the Congressional Budget Office (CBO) warned it would: "inevitably add to future deficits (on a cash basis) by more than it reduces deficits in the near term, even though the premiums would be set to ensure solvency of the program."

Aggressive Congressional oversight forced Department of Health and Human Services (HHS) Secretary Kathleen Sebelius to concede the program was unsustainable and admit she lacked legal authority to rewrite the program. HHS attorneys warned CLASS could leave some enrollees "worse off" or unable to "recoup their paid premiums" once it failed due to legal challenges. The Secretary stopped implementation, but she defied commonsense by urging Congress to keep the budget-busting program on the books. When Senate Democrats finally agreed to repeal CLASS, they replaced it with a flawed commission and tasked its Democrat-appointed majority with producing a plan in September. Congress should reject any recommendations for CLASS 2.0. We can't afford a new mandatory, publicly-funded LTC entitlement.

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