The Obama administration announced that it was scrapping a long-term care insurance program created by the new health care law because it was too costly and would not work.
Kathleen Sebelius, the secretary of health and human services, said she had concluded that premiums would be so high that few healthy people would sign up. The program, which was intended for people with chronic illnesses or severe disabilities, was known as Community Living Assistance Services and Supports, or Class. "We have not identified a way to make Class work at this time," Ms. Sebelius said. She said the program, which had been championed by Senator Edward M. Kennedy, Democrat of Massachusetts, was financially unsustainable.
AdvertisementKathy J. Greenlee, the assistant secretary of health and human services in charge of the program, said: "We do not have a viable path forward. We will not be working further to implement the Class Act."
The administration's decision was another setback for the new law, which is under attack in court, in Congress and in many state legislatures. Ms. Sebelius said her decision "does not affect the rest of the health care law," which is supposed to provide coverage to more than 30 million people who are uninsured.
But the Senate Republican leader, Mitch McConnell of Kentucky, said the long-term care program was "only one of the unwise, unsustainable components of an unwise, unsustainable law." He and other Republicans in Congress want to repeal the entire law.
Advocates for older Americans and people with disabilities expressed disappointment at the decision, and Ms. Sebelius said Americans still had an "enormous need" for long-term care insurance. "At $75,000 a year for a nursing home and $18,000 a year for home health care, most families cannot afford to pay out of pocket," she said.
The program was intended for people with severe disabilities who wanted to live in the community, though benefits could also have been used to help pay for nursing home care or assisted living. It would have been financed with premiums paid by workers, through voluntary payroll deductions, with no federal subsidy. Premiums were supposed to have ensured the solvency of the program over 75 years.
Connie Garner, who helped devise the long-term care program as an aide to Mr. Kennedy, said she was "very, very disappointed" by the decision. "The program could have been made to work" if the administration had tried harder, Ms. Garner said.