Pat Dollard

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Geriatric Leftists will be in quite a fuss when they come to learn this…assuming they can find their reading glasses.

Forbes:

I’ve written extensively about the looming fiscal disaster that is CLASS, Obamacare’s new entitlement for long-term care for retirees. Now, according to an official at the U.S. Department of Health and Human Services, the Obama administration may be shutting the program down.

This morning, Bob Yee, who was tasked with serving as the actuary of the CLASS program, sent out an email to his colleagues, announcing his departure from HHS, given that “HHS has decided to close down the CLASS Office effective tomorrow.” Yee writes that “I believe I have made a contribution to CLASS to the best of my ability and hope I haven’t embarrassed the actuarial profession too much.”

He gives thanks to his actuarial colleagues in the government, “whose predicament I have learned to appreciate—overworked and underpaid.” Yee spent 17 years at what is now Genworth Financial, one of the nation’s largest private providers of long-term care insurance, before joining Kathleen Sebelius at HHS. In February, Sebelius boasted of Yee’s expertise in assuring Congress that HHS would fix CLASS’s problems, despite legal analyses that she lacked that authority:

“The program will not start unless we can absolutely be certain that it will be solvent and self-sustaining into the future. But we do have flexibility…The snapshot in the bill, I would absolutely agree, is totally unsustainable. We do have administrative flexibility though, and we have a team including the actuary who was with Genworth who’s probably the largest provider of any kind of long term services; we are modeling things. This will not be a program that starts collecting until 2012.”

Sebelius promised that she wouldn’t implement CLASS if she couldn’t find a way to make the program work. If HHS is indeed shutting the program down, it would mean that she is honoring that promise. However, Sarah Kliff of the Washington Post is tweeting this morning that, according to the White House, the rumor is “flat-out false.”

Here is the full text of Yee’s email:

Sent: Thursday, September 22, 2011 8:16 AM

To: Bob Yee

Subject: CLASS

Dear colleagues,

I’m leaving my position as the CLASS Office actuary as HHS has decided to close down the CLASS Office effective tomorrow. I believe I have made a contribution to CLASS to the best of my ability and hope I haven’t embarrassed the actuarial profession too much.

I had the good fortune to work with, and receive advice from, almost all of you during this assignment. Thank you so much for your help and guidance. You have no idea how comforting it is to know that you have my back. Special thanks to the government actuaries whose predicament I have learned to appreciate – overworked and underpaid.

I’ll be taking some time off in late October. But, as my beloved governor Arnold has promised, I’ll be back.

If you have any questions or thoughts, please share them with me.

Take care.

Bob Yee

Yee confirmed to National Journal that the email is authentic. “I don’t think that’s the official line [that CLASS has been shut down]. But that’s my interpretation. All of the people are being reassigned.”

Sarah Kliff quotes an HHS statement:

“While the staff of the CLASS office has been reduced, reports that the CLASS office is closing are not accurate. We are continuing our analysis of this program. As we have said in the past, it is an open question whether the program will be implemented. A CLASS program will only be implemented if it is fiscally solvent, self-sustaining, and consistent with the statute.”

It seems odd, however, to “reduce” the staff of the CLASS office by laying off the actuary, who is the program’s most important official. (Actuaries are the insurance profession’s version of accountants; they’re the risk-assessment experts who design insurance plans such that the premiums taken in comport with anticipated future costs.) There are rumors that everyone who was working exclusively on CLASS has been laid off or reassigned, which echoes what Yee told National Journal.

My guess is that the Administration was hoping to let CLASS die quietly, so as to avoid upsetting the numerous interest groups whose advocacy of Obamacare hinged on the program.

In a comment upon one of my other CLASS posts, Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance, gives “enormous credit to Secretary Sebelius for keeping to her word,” while also crediting “those (especially Connie Garner) who are at least trying something to address the looming [long-term care] problem.”

Yee provides yet another explanation of the CLASS shutdown: “My understanding is they’re slowing down the development” of CLASS, Yee told Janet Adamy of the Wall Street Journal. “They’re taking a pause and reducing the amount of work being done.” But he re-confirms that the entire office is being reassigned (emphasis added):

“Bob Yee, chief actuary for the Health and Human Services office that administers what is known as the CLASS Act, told The Wall Street Journal on Thursday that the office was being disbanded effective Friday. He said officials informed him last week that his services were no longer needed, and that the remainder of the eight-person office is likely being reassigned to other jobs…

Mr. Yee was hired in January, when HHS opened the CLASS office, to develop actuarially sound proposals for how much the program should pay out in benefits and take in from premiums, among other things. He said he presented those findings to Kathy Greenlee, an assistant secretary at HHS who administers the CLASS Act.

Mr. Yee said he didn’t know how top brass were characterizing the office reductions, but said: “Clearly, all the people are reassigned, I’m leaving, so there’s nobody else except maybe the head of the office.” He plans to return to San Francisco, and said he’s optimistic about finding another job.”

Connie Garner, the Ted Kennedy staffer who helped push for CLASS and then promptly left to become a long-term care lobbyist at Foley Hoag, is “upset” to find out about the CLASS shutdown through the press:

“[Garner] pointed out that the program was created by law, and that the administration can’t just terminate it.

“The 275 groups that want to see some change aren’t going to let that happen,” she told The Hill.

Garner said she didn’t want to overreact to the email, which was making the rounds among CLASS Act advocates, before she had more information.

Still, she said, if the administration is closing the office without first informing advocates, they would naturally be upset.

“If in fact it fleshes out that they’re closing the office,” she told The Hill, “I would argue that of course we would be upset that we found out that way.

Congressional Republicans have sent Sebelius a list of 24 pointed questions about CLASS, such as: Who is running CLASS now? Why was Yee let go? Why was CLASS included in Obamacare despite its actuarial unsoundness? Sebelius’ answers will be interesting.