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U.S. cuts staff from disabled program, weighs future

By Anna Yukhananov

WASHINGTON (Reuters) - Cuts to staff overseeing a new federal insurance program for the disabled and elderly have cast further doubt on whether the program will ever go ahead.

Republican opponents of the Obama administration's healthcare overhaul declared the program dead, although the Department of Health and Human Services insisted on Thursday that it remains under evaluation.

"As we have said in the past, it is an open question whether the program will be implemented," said HHS spokeswoman Erin Shields in an emailed statement.

The Community Living Assistance Services and Supports (CLASS) program is designed to give the disabled and elderly cash to receive care at home instead of usually more expensive institutional care.

Republicans in Congress posted emails last week that showed government actuaries were already questioning CLASS, even before the program became part of last year's Patient Protection and Affordable Care Act.

And on Thursday, the Republican Policy Committee posted an email from Bob Yee, an HHS actuary who said he was hired to run the program, saying he was leaving his position and the CLASS office would be closing on Friday.

HHS officials admitted the staff has been "reduced," but said the program was not closing its offices.

"A CLASS program will only be implemented if it is fiscally solvent, self-sustaining, and consistent with the statute," Shields said.

The Community Living Assistance Services and Supports (CLASS) program is meant to provide cash benefits for people who become unable to perform at least two daily activities, such as dressing and bathing.

The program is voluntary, and participants must pay into the program for at least five years before qualifying for benefits.

Critics have said the program is fiscally unsustainable in the long run, as few healthy people would choose to purchase the expensive insurance.

The Congressional Budget Office has also said the program would start to lose money after the first decade or two, once benefit payments exceed income from premiums.

However, in the program's first decade, it would reduce the federal deficit by about $70 billion, the CBO said.

Under the law, workers can begin enrolling in the program after October of 2012, when the HHS is scheduled to set the program's benefits.

(Reporting by Anna Yukhananov; Editing by Tim Dobbyn)