Obamacare has been rightly blasted as fiscally irresponsible, yet few have noticed what may be Obamacare’s largest ticking entitlement time-bomb: the CLASS Act. My new op-ed on the subject is here, and my new report, co-written with Jim Capretta, is here.
CLASS is a new long-term-care insurance program that was inserted into Obamacare so that Congress could raid its $70 billion surplus through 2020 to cover Obamacare’s initial deficits. Like the raided Social Security trust fund, future taxpayers will have to repay that $70 billion with interest when the program falls into deficit later.
Thus, even Sen. Kent Conrad (D., N.D.) admits that Congress has enacted “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.”
It gets worse. CLASS is simultaneously 1) voluntary, 2) supposedly self-financing (premiums must be raised to match benefits), and 3) required to charge the same premium to healthy and unhealthy individuals of a given age. This is a recipe for insolvency.
To see why, consider an admittedly simplified example: Let’s say three 45-year-olds, based on varying health and expected long-term needs, state their individual willingness to pay for this insurance at $100, $500, and $900 per month.
In order to maintain solvency without risk-based pricing, CLASS would be required to charge all three people the same $500 premium. The healthiest person (willing to pay just $100) would consider this a bad deal and decline participation. At that point, premiums for the remaining two individuals would have to rise to $700 to keep the program solvent. This would cause the moderately healthy person (willing to pay $500) to also drop out, leaving only the unhealthiest person and a $900 premium.
Health economists call this an “adverse-selection death spiral,” and it would likely end in program bankruptcy. The CBO, the Department of Health and Human Services, and even the American Academy of Actuaries all agree that CLASS is unsustainable. Once it goes bankrupt (likely in 15 to 25 years), the subsequent taxpayer bailouts could cost trillions of dollars.
The best way to avoid a bailout would be to repeal CLASS before it begins enrolling participants and collecting premiums, which could be as soon as January 1, 2011. Is anyone in Congress paying attention?
Finally – Brian – you have stated the truth on one of your posts. It really is amazing – you have finally seen the light – Love your freudian slip in opening line – thank you!
'Obamacare has been rightly blasted as fiscally responsible' – that's right fiscally responsible!!!!!
Pingback: Must Know Headlines 7.28.2010 — ExposeTheMedia.com
Well, we are finding out what's in it now that it's passed.
When the right-wingers of today tell a lie, to them – it is the truth, for they are like their father the devil who is the father of lies and confusion.
Conception does not ever create a soul. God made us in God's Image, Spirit. God would Never force a woman to go through an unwanted pregnance or force her to give birth to a child she does not wish to mother. In a fetus, no-brain = NO-SOUL. God is pro-people = GOD IS PRO-CHOICE!!!
Genesis 1:19 and 1:20 – God caused Evolution – it is in the Bible!!!
Republicains serve money.
Republicains serve money for thier own gready intrests and for the 'special intrests' who give to them. Thier silos are bursting with illgoten, immoral wealth.
"You can not serve two Masters." Republicains have chosen thiers – $$$$$.
Republicains like Jesus said: "These people honor God with thier lips, not with thier hearts." "Thus in vain do the masses worship God, teaching not the will/doctrins of God, but thier own man-made doctrins."
Conservitives and right-wingers aquiring the money which they prize, they will spend stollen from another, not giving to those who trully own it and deserve it, thier fondness/gread for money which they have made thier master, makes them unwilling to pay taxes, (with money they have plundered from the 90% who deserve it). They have received their reward, and as Jesus said in : 10 Maidians; Lazareth the Beggar; Etc thier punishment will come. God is the same now, from the beginning and forever. They don't like what Jesus taught because as God said: "an evil tree brings forth evil fruit. Right-wingers have had thier reward, and thier punishment will come.
Read: 10 Maidians; Lazareth the Beggar; Sermon on Mount; for whom to through a feast; what Jesus told man who asked what he must do to be saved; Etc. Etc. Etc.
"Thus in vain do the masses(right-wingers) worship God…." "These people (right-wingers) worship God with their lips…."
M. Serot, you're very confused. God doesn't hold you responsible for my actions…
People are born free and individually when they're not aborted. Republicans respect that, where Muslims or I mean you and Kevin, DON'T. It wasn't republicans that put abortion in the bill. It was your party that thrives on individual weakness. THAT IS A PERSONAL ISSUE AND RESPONSIBILITY. GOVERNMENT ISN'T GOD!
grow up.
M. Serot, you're very confused. God doesn't hold you responsible for my actions…
People are born free and individually when they're not aborted. Republicans respect that, where Musli or I mean you and Kevin, DON'T. It wasn't republicans that put abortion in the bill. It was your party that thrives on individual weakness. THAT IS A PERSONAL ISSUE AND RESPONSIBILITY. GOVERNMENT ISN'T GOD!
grow up.