II 111th CONGRESS 2d Session S. 3829 IN THE SENATE OF THE UNITED STATES September 23, 2010 Mr. Graham (for himself, Mr. Coburn, Mr. Chambliss, Mr. McCain, and Mr. Cornyn) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To repeal the CLASS Act.

1.

Short title

This Act may be cited as the Long-Term Care Bailout Prevention Act.

2.

Findings

Congress makes the following findings: (1)According to an August 2010 survey by the National Business Group on Health, only 3 percent of employers would participate in the CLASS program. (2)While the CLASS program is projected to create an initial surplus that is used to pay for the programs created by the Patient Protection and Affordable Care Act, the Chief Actuary of the Centers for Medicare & Medicaid Services (CMS) has stated that by 2025, benefit payments will exceed premium revenues and the CLASS program will run deficits. This financing mechanism has even been referred to as a Ponzi scheme. (3)The CMS Chief Actuary has said, In general, voluntary, unsubsidized, and non-underwritten insurance programs such as CLASS face a significant risk of failure as a result of adverse selection by participants.. (4)Because of the downward spiral created by adverse selection, the program could go bankrupt and the Secretary of Health and Human Services could be forced to drastically increase premiums to unaffordable levels or taxpayers could be asked to bailout the CLASS program. (5)The alternatives described in paragraph (4) are unacceptable so the program must be repealed.

3.

Repeal of the CLASS Act

Title VIII of the Patient Protection and Affordable Care Act (Public Law 111–148) and the amendments made by such title are repealed.