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COMMENTARY: Rush to reform adds clunkers


The reason a federal long-term care program was incorporated in the health care reform law is a disturbing example of the seedy side of the legislative process.

This month, Health and Human Services Secretary Kathleen Sebelius pulled the plug on the Community Living Assistance Services and Support, or CLASS, Act.

Under the program, participants would have paid a monthly premium for five years, after which they would have become eligible for a cash benefit of at least $50 a day that could be used to offset the cost of long-term care services. The program was not expected to begin until next year.

Because the program was voluntary, critics correctly said it would have resulted in adverse selection, a point Ms. Sebelius acknowledged.

“This could have led to a vicious cycle where premiums would have to be set higher and higher to cover the likely costs of the benefits, leading fewer and fewer healthier people to sign up for the program,” she said.

If the program, as designed, was doomed to fail, why then was it incorporated in the health care reform law?

The answer to that, regrettably, is obvious: Since no benefits would have been paid out for five years, the premiums paid in would have been counted as revenue used to offset the cost of the health care reform law.

That feature made it attractive to health care reform law advocates anxious to show the law would not add to the federal deficit and explains a good part of the reason why it was embedded in the law.

Of course, the reality is that the long-term care program—because of adverse selection—eventually would have required a big taxpayer-funded bailout to remain solvent.

Ms. Sebelius, to her credit, saw the inevitable fate of the program and killed it.

Still, one wonders how many clunkers like the CLASS program remain in a law that didn't get the intense scrutiny it deserved—as opposed to meaningless sound bites by members on both sides of the aisle—as it moved through the House of Representatives and Senate.

There are some obvious ones, like a provision in the law that appears to impose a $2,000-per-employee penalty on employers for all their full-time employees even if only one lower-paid employee was not offered coverage, was eligible for a premium subsidy and used the subsidy to purchase coverage in a state insurance exchange.

This type of sledgehammer approach is hardly the way to encourage employers to offer coverage.

We hope the Obama administration and lawmakers can work together to identify and strip those clunkers from the law before they can do real damage, as would have been the case with the long-term care program.