In the face of criticism that the workers' long-term-care insurance program included in last year's health-care overhaul is fiscally unsustainable, the Obama administration is looking at modifying the plan.
Officials of the administration said on Monday that the Department of Health and Human Services is looking into raising the income requirement for participating in the program and allowing its insurance premiums to be raised over time.
The long-term care program, known as the Class Act, is designed to insure workers in the event they become unable to care for themselves, primarily due to injury or illness. Workers who choose to participate and end up needing to make a claim would receive a payout of $50 a day or more to cover services such as home health care, transportation and nursing-home facilities.
The program isn't set to begin until at least 2012, and workers must participate for five years before they can qualify for benefits.
The program has become a target of deficit hawks, who say its costs will exceed its revenue once it begins paying out benefits later this decade. President Barack Obama's bipartisan deficit commission last year called for repealing or reworking the program, saying it will eventually collapse under its own weight if it doesn't generate more revenue.
In a speech Monday, Health and Human Services Secretary Kathleen Sebelius said she and the president realize the program is "certainly far from perfect." She added: "Many of the changes that were debated and proposed to the reform bill that would have improved the program's financial stability were not included in the final legislation."
But Ms. Sebelius made clear the administration didn't want the program repealed. Officials said the changes they were weighing could be done under the existing law.
Monday's remarks underscore an emerging response from the Obama administration as Republicans campaign to knock down the entire health-overhaul law.
White House officials are getting behind a small number of changes aimed at improving the law and emphasizing that it is better to tweak the overhaul than to throw it away. Last week, the Democratic-controlled Senate passed a bill to repeal an expanded tax-reporting requirement in the law that upset small businesses, and Mr. Obama has signaled he would sign it.
The Class Act has been a sensitive issue for Democratic lawmakers because it was pushed by the late Massachusetts Democratic Sen. Edward Kennedy.
The program is projected to raise money for the health overhaul during its first decade because it will take in more premiums than it pays out in benefits. However, the nonpartisan Congressional Budget Office estimated that eventually the sum of benefit payments and administrative costs would probably exceed its revenue and related cost savings.
Supporters of the program note the program won't add to the deficit because the law contains a mechanism that shuts the program down if it can't pay for itself over the long term.
Under the current law, the long-term care insurance program is open to workers who have earned about $1,100 a year or more for at least three years during the five-year-enrollment period. The administration is concerned that minimum income level may be too low and would result in so many workers drawing benefits that the financial viability of the program would be threatened.
The law also calls for the program's insurance premiums to remain flat while benefits would increase with inflation. That could lead to premiums being set so high in the beginning that they would discourage people from participating. But if premiums are set too low, they will be eclipsed by rising benefits. To address that, officials are considering indexing premiums so they would rise along with benefits.