President Obama enters the East Room with Sen. Edward M. Kennedy for a White… (Pete Souza / White House )
The Obama administration on Friday told congressional leaders that it cannot implement a new program to provide Americans with long-term care insurance, abandoning a controversial part of the new healthcare law the president signed last year.
The move will not affect implementation of other parts of the sweeping healthcare law, including preparations for a major expansion of health insurance coverage starting in 2014, according to administration officials.
But the decision to give up on what was once touted as a key benefit of the law marks a major retreat for the Obama administration and a vindication for critics who have voiced doubt about the promises that Democrats made as they fought to enact the law last year.
It also struck a blow at one of the late Sen. Edward M. Kennedy’s long cherished goals – a government entitlement to help elderly Americans pay for home care or a nursing home at the end of their lives.
In a letter to senior Democrats and Republicans on Capitol Hill, Secretary of Health and Human Services Kathleen Sebelius said such a benefit remains critical.
But she said the program envisioned in the healthcare law – known as the Community Living Assistance Services and Supports, or CLASS, program – couldn’t have been structured to collect enough in premiums to remain solvent.
"For 19 months, experts inside and outside government have examined how [the Department of Health and Human Services] might implement a financially sustainable, voluntary and self-financed long-term care insurance program under the law," Sebelius wrote.
"But despite our best analytical efforts, I do not see a viable path forward for CLASS implementation."
Republican critics of the healthcare law, most of whom have pledged to roll back the whole law, urged even more aggressive action to eliminate the program.
"Simply setting aside the program for the near-term is not enough," said Sen. John Thune (R-S.D.), a leading critic. "Repeal is the only solution to ensuring American taxpayers will not be on the hook in the future for this disastrous entitlement."