Legislation repealing CLASS would have no budgetary impact, CBO says

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Sen. John Thune (R-SD)
Sen. John Thune (R-SD)
Cancellation of the CLASS Act means there will be billions less going toward reducing the nation's net deficit, the Congressional Budget Office said Monday.

The Community Living and Assistance Services and Support (CLASS) program was a part of healthcare reform law, the total of which the CBO estimated would reduce the federal deficit by around $143 billion in a decade. Of that, $81 billion was coming from premium payments for long-term care insurance through CLASS.

In a letter to Sen. John Thune (R-SD), the CBO said his legislation seeking to repeal the CLASS program “would be estimated as having no budgetary effect.” It also said repeal of CLASS will mean more costs for Medicaid.

The agency “anticipated that the CLASS program would begin collecting premiums in fiscal year 2012 and that net receipts of the program over the 2012-2021 period would amount to $81 billion,” CBO Director Douglas W. Elmendorf wrote in a letter. “In the absence of the program, the government would not receive that income — and, in addition, Medicaid costs would be about $2 billion higher, CBO estimates.”

CLASS was effectively jettisoned last month, when Health and Human Services Secretary Kathleen Sebelius said she could not see a way to make the program financially viable.