Posted on 09/23/2010 8:38:27 AM PDT by roses of sharon
WASHINGTON - Continuing his commitment to the repeal and replace of Obamacare, United States Senator Lindsey Graham (R-South Carolina) has introduced legislation to repeal another major provision of the recently-passed health care law - the Community Living Assistance Services and Support (CLASS) Act.
"The CLASS Act is a Ponzi scheme that would make Bernie Madoff blush," said Graham. "It's billed as an insurance program for long-term care, but really it's just a huge and very costly government accounting trick."
Graham said:
* Under the CLASS Act, the government can begin collecting long-term care ‘insurance' premiums in 2011. * The CLASS Act won't begin to pay out benefits - at the earliest -- until 2016. * The government will use the initial ‘surplus' from CLASS Act to pay for other programs created by the health care bill. * By 2025, benefit payments will exceed premium revenues and the CLASS Act will run deficits. American taxpayers will be on the hook to cover the annual shortfalls. * The government's chief accountant for the Centers for Medicare and Medicaid Services has even sounded the warning alarm noting the CLASS Act faces, "a significant risk of failure."
"To help build momentum for repeal and replace of Obamacare, we should continue holding up all the individual pieces of this monstrosity - like the CLASS Act - to the light of day," said Graham. "The more Americans learn about the details of this health care bill, and provisions like the CLASS Act, the less they like it. The sooner we can repeal and replace Obamacare, the better off our nation will be."
Senators Tom Coburn (R-Oklahoma), Saxby Chambliss (R-Georgia), John Cornyn (R-Texas), and John McCain (R-Arizona) joined Graham as co-sponsors of the legislation, The Long-Term Care Bailout Prevention Act.
Obamacare has been rightly blasted as fiscally responsible, 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 theprogram 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 thisinsurance 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 theprogram 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?
American Traitors voted YES on this genocide. Get these anti-American traitors out of office on November 2nd.
Good. But you’ll still getting primaried, RINO.
There goes Graham, pretending to be a Republican man.
Which Lindsay Graham is this?
Beware of the GOP looking to “replace” the healthcare folks, this would be terrible, it just needs to be repealed. Remember, the GOP is fighting hard against the tea party, they are not on our side.
Why replace it? Why not just keep repealing and undoing the rest of the laws they have made up in the last 60 years. We already have more than enough laws and we would be better off only letting them get together about every ten years. They are all useless and do nothing constructive.
Why is he pretending to be a conservative now?
We don't want to replace it, we just want it gone. NO Government health care of any kind. What part of no doesn't this RINO a**hat understand?
REPLACE? = NO!
Replace, maybe... with only market-based solutions, though.
I agree whole-heartedly.
Zackly.
There’s no place for compromise on this.
If a RINO bellows in the woods and no one hears him does he then become a Democrat?
The Delaware Tea Party victory is starting to collect dividends. All the RINO’s, including those who are up for election 2 years from now, are getting nervous. They are much more likely to start acting like Republicans now that they are being held accountable, even if they are more “electable” in their state, let alone in a state like Graham’s!
The more and more this monster shows it’s face the worse it gets. It is one giant money grab and a road to DeathCare for Seniors.
Is he pushing Cap and Trade?
Is he pushing the amnesty bill?
REPEAL? = YES!
REPLACE? = NO!
REPLACE GRAHAM = YES!
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