Congress Ends CLASS Act Limbo

The New Year's Day agreement to avoid the fiscal cliff included a repeal of the Community Living Assistance Services and Support (CLASS) Act. This action will likely not have a material impact on anyone, as this component of the 2010 health reform law was abandoned by the Obama Administration when it was determined to be unsustainable. It was simply a matter of when - not if - it would be eliminated.

Its repeal, however, is welcome as it makes it more difficult for Congress to amend the act and thus impose another financially burdensome entitlement program upon us. As I pointed out previously, if the program makes sense and there is both a demand for it and a means to provide it, the market will ensure it exists without the need for an inefficient and bureaucratic mandate.

While the fiscal cliff deal ended up being smaller than originally expected, the New Year's agreement did make some notable changes in the healthcare space. Repealing CLASS was one; cutting $1.7 billion from the funding for Consumer Oriented and Operated Plans (CO-OPs) is another. What else would you have trimmed and what do see as the implications of these changes?

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