Impact of New Health Care Legislation
Long Term Care Coverage for All
A new government-run program is meant to address the growing need for Long Term Care Services.
Tucked into the Health Reform Law (originally sponsored by the late Ted Kennedy) that passed in March is a national voluntary insurance program for purchasing Long Term Care services.
It is called the “Community Living Assistance Service and Support (CLASS) Act.” The program will be financed by voluntary contributions paid by working adults through payroll deductions.
This program could supplement the private insurance that people buy to cover the costs related to Long Term Care services which are “not” covered by traditional health insurance or Medicare. A private LTC insurance policy pays for several types of care including Nursing Home Care, Assisted Living Care, and Home Health Care services.
The idea is this: “How can we keep people at home for as long as possible and reduce the number of people going into institutional settings?”
More than 10 million Americans need Long Term Care services and that number is expected to “explode” with the aging population according to the Kaiser Family Foundation, a non-profit health group.
One advantage to the CLASS provision is that it is guaranteed issue, which is not the case with private Long Term Care insurance. While many of the details of this program are still to be determined, the Department of Health and Human Services has until October 2012 to fully define the program.
However, the Congressional Budget Office expects the benefits to be on average $50 to $70 a day. The CLASS program is not meant to cover all costs associated with LTC, but the intention is to help.
But one must understand that the national average for a semi-private room in a Nursing Home is $198 a day (that’s over $72,000 a year), and more importantly is the average hourly rate for a home health aid is $21.
As you can see, the benefits of CLASS are just a small band-ad on a major cut. Based on conservative assumption the CBO estimate that workers will pay an average monthly premium of $150 with premiums increasing with inflation each year (premiums would also vary by workers age when they enroll).
There is no doubt in my mind that you can get a better, more efficient policy on your own!
As an example, with private Long Term Care insurance, once you start utilizing benefits, you no longer pay premiums. However with CLASS, you must continue to pay premiums even when utilizing benefits.
Also, private LTC policies have consumer protection provisions. But under the CLASS program, the government can increase premiums or change requirements for getting benefits at anytime.
It is also very important to know that those who do enroll in CLASS must contribute for at least 5 years and have worked during the most recent 3 years of that 5 year period.
Everyone must understand the importance of Long Term Care…DO YOU?
Abe Glickman, LTCA, LTCP
Member: AALTCI, NAHU, NAIFA, SOA
Abe Glickman Insurance Group
Toll-Free Phone: 877-298-5824
“It is better to create a plan 10 years too soon than one day too late.”
Questions or Comments? Give me a call!
* Data Collected by MSN Money