House Repeals Long-Term Care Program Obama Viewed as Too Costly

The U.S. House repealed a long-term care insurance program created by the 2010 health-care law that the Obama administration decided was too costly to put in place.

The 267-159 vote sends the bill to the Senate, where Democrats don’t plan to bring it up. The program, known as the Class Act, was proposed by the late Senator Edward Kennedy, the Massachusetts Democrat who died in August 2009 before passage of the law.

“While the goals of the program are worthy, good intentions don’t make up for fundamentally flawed, actuarially unsound policies designed to show the illusion of savings,” Pennsylvania Republican Joe Pitts, chairman of the House Energy and Commerce health subcommittee, said during yesterday’s floor debate.

Representative Henry Waxman of California, ranking Democrat on the Energy and Commerce panel, said Republicans who have majority control of the House haven’t offered an alternative long-care plan even though they say they want to “repeal and replace” the health-care law.

For a monthly premium, the long-term care program would have provided workers a cash stipend of at least $50 a day if they became seriously ill or disabled and needed care at home. The 2010 health-care law specified that the government wouldn’t start the program unless actuaries concluded it would collect enough in premiums to cover the benefits.

In October, Health and Human Services Secretary Kathleen Sebelius said the administration was canceling the program because it wasn’t financially viable. Officials said healthy people may not enroll in sufficient numbers to finance benefits for everyone who needed them.

$3,000 a Month

If too many sick people signed up for the program, premiums may have been as high as $3,000 a month, Kathy Greenlee, assistant secretary for aging, wrote in a memo explaining why it was canceled. She said the government didn’t have legal authority to limit enrollment.

Senate Republicans may try to force a vote on the House measure, said Don Stewart, a spokesman for the chamber’s Republican leader, Mitch McConnell of Kentucky.

“We think it ought to be repealed and we’d sure like to find a way to vote on it,” Stewart said in an e-mail.

Republicans have called the program a gimmick to conceal the cost of the health-care law. After canceling the long-term care plan, the Obama administration reduced the estimated budget savings from the health-care law from $210 billion over a decade to $124 billion. The Class Act would have saved money in its early years because it wouldn’t have paid benefits for at least five years after people started paying premiums.

Kennedy advocated a long-term disability insurance program throughout his 46-year Senate career and pushed for the Class Act -- Community Living Assistance Services and Supports -- as part of the health law before he died. Long-term care for the disabled can cost as much as $80,000 a year in a nursing home, Greenlee said in her memo.

The bill is H.R. 1173.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net

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