Whither the CLASS Act?

“Seems like a recipe for disaster to me.” That’s one of many e-mails, sent by Obama administration officials and released today by congressional Republicans, taking shots at health reform’s long-term insurance program.
(LAUREN VICTORIA BURKE - AP)

The messages, all referring to the Community Living Assistance Support and Stability (or CLASS) Act, were sent before health reform became law. The concern, raised in this and other e-mails, is over the CLASS Act’s financial stability. The long-term insurance program relies on voluntary enrollment. If only a small group of unhealthy people — those who anticipate using the services — sign up, the program could quickly destabilize.

It’s certainly not good news for the White House to have officials criticizing a prominent health reform program. But it’s not surprising; the White House has never been a big CLASS Act booster. This past February, HHS Secretary Kathleen Sebelius testified before the Senate Finance Committee that the CLASS Act should either be “reformed or repealed.”

In fact, it was a bit of a legislative fluke that the CLASS Act made it into the Affordable Care Act in the first place. John McDonough, a former aide to the late Sen. Ted Kennedy, reveals how it happened in his new book, “Inside National Health Reform.”  

Kennedy was unquestionably the driving force behind the CLASS Act, pushing it forward despite opposition from other top Democrats. “Senate Finance chair Max Baucus was a CLASS skeptic and his chief health reform ally, budget chair Kent Conrad, was a CLASS opponent,” McDonough recalls.

But a split-second decision, in the middle of a Senate mark-up in summer 2009, all but secured the CLASS Act’s place in health reform. Here’s how McDonough recalls the meeting, where Sen. Christopher Dodd filled in for the then-ailing Kennedy:

Dodd was unsure he could hold together enough Democrats to keep CLASS in the bill. When Gregg moved his amendment to delete an explicit premium and replace it with an actuarially sound premium to be determined by the HHS secretary, Dodd peered at [an aide] for her call: “How about accepting it?” he asked in a whispered conversation. They decided on the spot to agree, surprising and disarming Gregg.

Gregg was caught off guard, the amendment passed and the bill moved out of committee. After that, any amendment to kill it would have needed a filibuster-proof 60 votes. “Arguably and ironically,” McDonough writes, “Gregg’s amendment did more to secure [the CLASS Act’s] survival than anything else in the lengthy process.”

Moving through the legislative process with relatively sparse support doesn’t bode well for the CLASS Act’s future. As McDonough writes in his book, “As the Obama administration — not a fan of CLASS during the legislative process — moves toward implementation, CLASS has a challenging future ahead of it on many levels — financially, programmatically, and politically.”