Obama was not candid; Congress did not care; Dems have paid the price - Long-Term Care Gets the Ax; Sen. Conrad: 'A Ponzi scheme of the first order.'

From The New York Times:

The Obama administration announced Friday 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.

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.

Two early critics of the Class program — Senator John Thune of South Dakota and Representative Charles Boustany Jr. of Louisiana, both Republicans — said they had been vindicated.

“The Obama administration ignored repeated warnings about the financial solvency of this massive new entitlement and suppressed information on the viability of the program,” Mr. Thune said.

In an interview, Mr. Boustany said that “in their haste to get the bill passed,” President Obama and Congressional Democrats ignored warnings about the program’s financial risks.

When Congress was developing the program in late 2009, Senator Kent Conrad, Democrat of North Dakota and chairman of the Budget Committee, described it as “a Ponzi scheme of the first order” because it required an ever-increasing stream of premiums to cover the cost of benefits.
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From The Wall Street Journal:

The move emboldened critics of the law, who said the pullback undermines the broader foundations of the health overhaul. Despite the popularity of some individual provisions, Americans remain divided in their support for the overhaul.

The program was projected to generate tens of billions of dollars of revenue in its early years, when it was taking in premiums and paying out little in claims. But over time, its obligation to pay out claims was projected to exceed that revenue.
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From The Washington Post:

The Obama administration cut a major planned benefit from the 2010 health-care law on Friday, announcing that a program to offer Americans insurance for long-term care was simply unworkable.

Although the program had been dogged from the start by doubts about its feasibility, its elimination marks the first time the administration has backed away from a key piece of President Obama’s signature legislative achievement.

Because the insurance program had been projected to reduce the federal deficit by $86 billion over the next 10 years, terminating it complicates the nation’s budget picture. It is now estimated that the health-care law will cut the deficit by $124 billion from 2012 to 2021, according to the Congressional Budget Office.

The program was a long-cherished goal of Kennedy, whose support helped ensure that it was folded into the larger health-care measure despite resistance from prominent Democrats and even the White House.

Its path to inclusion was also eased by projections that, at least initially, it would boost the federal balance sheet by tens of billions of dollars. This was because the law barred the program from paying out benefits for the first five years. So by adding the program to the health-care legislation, Democrats were able to substantially increase the deficit savings they could claim for the law as a whole.