With no money, no staff, and no way to make the program fiscally solvent, a controversial long-term disability insurance program established under the 2010 health reform law is officially over.
Health and Human Services Secretary Kathleen Sebelius said there was way to fix the program, known as CLASS.
"For 19 months, experts inside and outside of government have examined how HHS might implement a financially sustainable, voluntary and self-financed long-term care insurance program under the law that meets the needs of those seeking protection for the near term and those planning for the future," Sebelius wrote in a letter to Senate Majority Leader Harry Reid, D-Nev.
"But despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time."
Besides being a public failure of a significant piece of the health care law, it also will cost Democrats the chance of $84 billion in savings that the Congressional Budget Office said the program would have saved.
The CLASS program had been on indefinite hiatus since September. Staff at the CLASS office within HHS were reassigned last month. Senate Democrats removed all funding for CLASS in the Labor-Health and Human Services 2012 spending bill because program "implementation has been delayed." The program was originally intended to start collecting premiums in October 2012.
Republicans seized on the announcement as proof the entire health care law should be repealed.
“The Obama administration today acknowledged what they refused to admit when they passed their partisan health bill: the CLASS Act was a budget gimmick that might enhance the numbers on a Washington bureaucrat’s spreadsheet but was destined to fail in the real world,”Senate Minority Leader Mitch McConnell, R-Ky., said in a statement. “However, it is worth remembering that the CLASS Act is only one of the unwise, unsustainable components of an unwise, unsustainable law.”
Senate Health, Education, Labor and Pensions ranking member Mike Enzi, R-Wyo., also joined in on the criticism.
“After seeing the many unintended consequences that surround the President’s new health care law, this is more evidence that casts suspicion and doubt on the remaining portions of law,” Enzi said in a statement.