When will the CLASS Act begin?
While provisions of the CLASS Act become effective in 2011, there are so many details to be worked out that most experts don't expect the plan will actually become available until 2013. (The law says details are not due until the final months of 2012.
Costs have to be determined. Employers must be given sufficient time to educate employees and prepare to start withholding premiums from employee paychecks. Systems have to be in place to accept and keep track of monies withheld from participants.
Following implementation and withholding of the first payments from employees' paychecks, there is a five-year waiting period during which premiums must be paid before the participant becomes eligible to receive benefits. As a result, the earliest anyone could be receiving CLASS benefits may be as late as 2018.
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Who will pay - will it cost me money?
CLASS is intended to be a voluntary plan primarily offered by employers and paid for by employees. Or simply stated, money will be withheld from individual paychecks -- similar to the way Social Security (FICA) tax payments are withheld from paychecks.
There are provisions to make the CLASS offering available to others who may be self-employed or who may not have access to the plan through an employer. These also will have to be defined and systems established.
Congress made CLASS an "opt out" plan. This is an important point that people need to be aware of. Unlike Social Security or Medicare that are mandatory, CLASS is a "voluntary, opt-out" plan. If that sounds confusing, it is. Read the question below regarding "opt out".
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Sunday, June 19, 2011
Wednesday, January 12, 2011
Do You Need Long-Term Care Insurance?
Ethan Ewing | November 04, 2010If you are like many military service members, you have instituted a long-term savings plans to tackle accepted later life expenses such as college tuition and/or retirement. What many people -- civilians and military personnel alike -- fail to consider is the need for long-term care.
Long-term care can include a wide range of medical and support services for those who are disabled or infirm. It is easy to put off this topic by claiming that you are young, strong or unlikely to find yourself in need of such support. But long-term care is a fact of life -- and sometimes sooner rather than later. The numbers are sobering and sometimes staggering:
1. More than nine million people over the age of 65 will need long-term care. By 2020, that number increases to 12 million. (1)
2. Average long-term care is 2.5 years, but roughly 30 percent of people need it for more than five years. (2)
3. The average daily rate in 2008 for a semiprivate room was $191. That is almost $70,000 a year. (3)
ItÂ’s important to realize that long-term care doesnÂ’t always have to happen at a nursing facility or only to the elderly. Often, older individuals are cared for at home by a family number. Even in this scenario, the costs -- both emotional and monetary -- can accumulate quickly. And on-the-job or in-service injuries can lead to a need for long-term care much sooner than expected in life.
So how do you protect yourself and plan accordingly? One option is Long-Term Care Insurance (LTCI). This provides coverage for services related to long-term care needs, including in-home services provided by loved ones. Typically, it pays a specified daily amount for nursing home care, in-home service or similar support for a specified number of years or even the individualÂ’s lifetime.
Like with any insurance, there are positives and negatives that each potential policyholder must consider. Specific to LTCI, it also matters when you initiate coverage. Is it worth it to buy at a younger age when premiums are less, but youÂ’ll be paying into the insurance for longer? Or should you hedge your bets on a disability while young, but face higher premiums later in life? You can also buy a policy that will only cover a specific number years of payments versus an entire lifetime of care. There are obviously risks in balancing the short-term financial benefits versus long-term financial exposure.
The simple math shows that it makes sense to at least consider LTCI. At $70,000 a year and an average stay of 2.5 years, an out-of-pocket medical bill of $175,000 is more than enough to significantly dent your military retirement fund. Considering that the cost of medical care will only increase, it is a safe bet that these costs will be exponentially greater when you reach your 65th birthday.
According to the American Association for Long-Term care Insurance, a single 55 year-old purchasing 3 years of coverage at a daily $100 maximum will pay $1,060 per year in premiums. For a 65 year-old, that premium jumps to $2,028. At this point, it makes sense to consider your personal health as well as your family history. By purchasing early, you will save almost $1,000 a month but you will also pay 10 years of additional premiums.
Some critics of LTCI say it is unnecessary at any age; that a smart retirement and personal savings program can account for later in life long-term care needs. If you can be diligent and aggressive enough in your savings to account for two to three years of potential costs at that level, then it is certainly worth considering avoiding LTCI. In that scenario, if you never need long-term care then you would maintain ownership of money that otherwise would have been paid into a premium.
Regardless of your choice, every individual should at least weigh the numbers and consider LTCI. Military members who pursue LTCI are fortunate in that they have access to a federally sponsored insurance program called Federal Long Term Care Insurance Program. It is the largest group long-term care insurance program in the country. Created in 2000 by federal law and administered jointly by John Hancock Life Insurance Company and Metropolitan Life Insurance Company, the program covers nursing home care, home health care, assisted living facilities, and adult day care.
Like any insurance program, individuals must qualify for coverage -- but undocumented estimates claim that nearly two out of three retirees who apply are accepted. You can find more information on FLTCIP at http://www.opm.gov/insure/ltc/. Be sure to research it carefully and obtain plan estimates from multiple insurance providers to make sure you are receiving the best deal possible.
______________________________________
(1) US Department of Health and Human Services
(2) Joint study conducted by Penn State, Georgetown and Lewin Group
(3) MetLife Mature Market InstituteÂ’s annual survey of nursing homes
Copyright 2011 Ethan Ewing. All opinions expressed in this article are the author's and do not necessarily reflect those of Military.com.
Long-term care can include a wide range of medical and support services for those who are disabled or infirm. It is easy to put off this topic by claiming that you are young, strong or unlikely to find yourself in need of such support. But long-term care is a fact of life -- and sometimes sooner rather than later. The numbers are sobering and sometimes staggering:
1. More than nine million people over the age of 65 will need long-term care. By 2020, that number increases to 12 million. (1)
2. Average long-term care is 2.5 years, but roughly 30 percent of people need it for more than five years. (2)
3. The average daily rate in 2008 for a semiprivate room was $191. That is almost $70,000 a year. (3)
ItÂ’s important to realize that long-term care doesnÂ’t always have to happen at a nursing facility or only to the elderly. Often, older individuals are cared for at home by a family number. Even in this scenario, the costs -- both emotional and monetary -- can accumulate quickly. And on-the-job or in-service injuries can lead to a need for long-term care much sooner than expected in life.
So how do you protect yourself and plan accordingly? One option is Long-Term Care Insurance (LTCI). This provides coverage for services related to long-term care needs, including in-home services provided by loved ones. Typically, it pays a specified daily amount for nursing home care, in-home service or similar support for a specified number of years or even the individualÂ’s lifetime.
Like with any insurance, there are positives and negatives that each potential policyholder must consider. Specific to LTCI, it also matters when you initiate coverage. Is it worth it to buy at a younger age when premiums are less, but youÂ’ll be paying into the insurance for longer? Or should you hedge your bets on a disability while young, but face higher premiums later in life? You can also buy a policy that will only cover a specific number years of payments versus an entire lifetime of care. There are obviously risks in balancing the short-term financial benefits versus long-term financial exposure.
The simple math shows that it makes sense to at least consider LTCI. At $70,000 a year and an average stay of 2.5 years, an out-of-pocket medical bill of $175,000 is more than enough to significantly dent your military retirement fund. Considering that the cost of medical care will only increase, it is a safe bet that these costs will be exponentially greater when you reach your 65th birthday.
According to the American Association for Long-Term care Insurance, a single 55 year-old purchasing 3 years of coverage at a daily $100 maximum will pay $1,060 per year in premiums. For a 65 year-old, that premium jumps to $2,028. At this point, it makes sense to consider your personal health as well as your family history. By purchasing early, you will save almost $1,000 a month but you will also pay 10 years of additional premiums.
Some critics of LTCI say it is unnecessary at any age; that a smart retirement and personal savings program can account for later in life long-term care needs. If you can be diligent and aggressive enough in your savings to account for two to three years of potential costs at that level, then it is certainly worth considering avoiding LTCI. In that scenario, if you never need long-term care then you would maintain ownership of money that otherwise would have been paid into a premium.
Regardless of your choice, every individual should at least weigh the numbers and consider LTCI. Military members who pursue LTCI are fortunate in that they have access to a federally sponsored insurance program called Federal Long Term Care Insurance Program. It is the largest group long-term care insurance program in the country. Created in 2000 by federal law and administered jointly by John Hancock Life Insurance Company and Metropolitan Life Insurance Company, the program covers nursing home care, home health care, assisted living facilities, and adult day care.
Like any insurance program, individuals must qualify for coverage -- but undocumented estimates claim that nearly two out of three retirees who apply are accepted. You can find more information on FLTCIP at http://www.opm.gov/insure/ltc/. Be sure to research it carefully and obtain plan estimates from multiple insurance providers to make sure you are receiving the best deal possible.
______________________________________
(1) US Department of Health and Human Services
(2) Joint study conducted by Penn State, Georgetown and Lewin Group
(3) MetLife Mature Market InstituteÂ’s annual survey of nursing homes
Copyright 2011 Ethan Ewing. All opinions expressed in this article are the author's and do not necessarily reflect those of Military.com.
Tuesday, May 4, 2010
Long-term insurers may have missed an opportunity
Published: Tuesday, May 04, 2010
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By JANET COLLITON
With all of the debate over health care reform, one provision that passed regarding seniors and payment for long-term care at home failed to attract much attention. That will likely change and the Community Living Assistance Service and Supports Act, referred to in short as the CLASS Act, presents some interesting questions.
I would go so far as to suggest that the long-term care insurance industry might have missed an early opportunity to make its product more accessible and more affordable. With some modifications to coordinate with private long-term care insurers, CLASS Act might pave the way to a better future for seniors and the disabled.
First, it helps to know what the Act does. A longtime proposal of the late Sen. Ted Kennedy, CLASS Act deals with some of the major concerns regarding long-term care insurance.
Seniors tell me frequently that they have long-term care insurance but the premiums have increased significantly over the years and increased premiums coincide with their decreased income. The premium that they could afford to pay at age 60 continues to increase while, at age 80, they are afraid to discontinue coverage just at the time they might need it.
Various suggestions have been made to deal with the issue. These include reducing the dollar amount of coverage, increasing the elimination period, reducing the time period over which benefits are paid, and dropping the inflation rider. All of these possibilities result, one way or another, in reducing coverage.
At the same time, insurers have a valid concern that, as people age and need more care, the company’s costs have increased also.
If people began to pay into the long-term care system at an earlier age, say, for example, while they are still employed full time, then long-term care insurers would have a larger pool from which to draw. This is where CLASS Act comes in as a small payroll deduction that workers pay into while they are still healthy and that can result in daily benefits when the worker is disabled or elderly and needs at-home long-term care. It is a movement away from the Medicaid model that depends on reduced assets and income and toward an insurance model.
The CLASS Act benefit is projected to be small, some estimates range in the $50 to $75 per day range, but after five years of payment into the system, participants would be eligible to receive benefits without the complicated asset issues raised by the Medicaid program. Think of the program as a small first step. It could help with at-home care for the disabled at any age and the very frail elderly. It could not deal with the much larger nursing home care expense.
In an Internet article published by Kaiser Family Foundation, probably the best source for long-term care analysis on the Web, at www.kaiserhealthnews.org, Howard Gleckman, senior research associate at the Urban Institute, raised the question “Will private long-term care insurance supplement the CLASS Act?”
Gleckman raised some valid issues. First, CLASS Act would have, as previously indicated, a small daily benefit. It could be assumed that a sizable number of participants would want more coverage. This additional coverage might be provided by private long-term care insurers.
If insurers worked with the system, they could offer supplemental coverage the way that we have Medicare Supplement plans and Medicare Advantage to supplement Medicare but, in this case, dedicated to long-term care insurance. The question is, would long-term care insurers want to offer this kind of supplement to the basic CLASS Act coverage?
A downside of working with the federal legislation is that coordination of coverages could be a problem. People who might receive benefits under CLASS Act might not be covered under the private policy. CLASS Act coverage would continue indefinitely. Most private insurers today offer policies covering no more than four to five years of care.
If insurers decided to compete with CLASS Act instead of working with it, both would likely suffer.
Governments have tried for years to encourage consumers to take out long-term care insurance. Pennsylvania not long ago spearheaded an effort called “Own Your Future” which provided contacts and links into private insurers.
There have been some positive signs on the horizon. Recently, on April 20, I wrote about hybrid long-term care insurance-life insurance and long-term care insurance-annuity products. See www.collitonlaw.com, “New Hybrid Insurances May Help With Long Term Care.”
There has been movement toward paying an upfront single premium to avoid the problem of declining income. Flexibility will be needed to deal with these very common concerns.
Janet Colliton is an elder law attorney whose offices, Colliton Law Associates PC, are located at 790 E. Market St., Suite 250, West Chester, PA 19382, 610-436-6674, colliton@collitonlaw.com. She is also, with Jeffrey Jones, CSA, co-founder of Life Transition Services LLC, a service for families with long-term care needs.
Comments
No comments posted. | Email to a friend | Print version | ShareThis| RSS Feeds
By JANET COLLITON
With all of the debate over health care reform, one provision that passed regarding seniors and payment for long-term care at home failed to attract much attention. That will likely change and the Community Living Assistance Service and Supports Act, referred to in short as the CLASS Act, presents some interesting questions.
I would go so far as to suggest that the long-term care insurance industry might have missed an early opportunity to make its product more accessible and more affordable. With some modifications to coordinate with private long-term care insurers, CLASS Act might pave the way to a better future for seniors and the disabled.
First, it helps to know what the Act does. A longtime proposal of the late Sen. Ted Kennedy, CLASS Act deals with some of the major concerns regarding long-term care insurance.
Seniors tell me frequently that they have long-term care insurance but the premiums have increased significantly over the years and increased premiums coincide with their decreased income. The premium that they could afford to pay at age 60 continues to increase while, at age 80, they are afraid to discontinue coverage just at the time they might need it.
Various suggestions have been made to deal with the issue. These include reducing the dollar amount of coverage, increasing the elimination period, reducing the time period over which benefits are paid, and dropping the inflation rider. All of these possibilities result, one way or another, in reducing coverage.
At the same time, insurers have a valid concern that, as people age and need more care, the company’s costs have increased also.
If people began to pay into the long-term care system at an earlier age, say, for example, while they are still employed full time, then long-term care insurers would have a larger pool from which to draw. This is where CLASS Act comes in as a small payroll deduction that workers pay into while they are still healthy and that can result in daily benefits when the worker is disabled or elderly and needs at-home long-term care. It is a movement away from the Medicaid model that depends on reduced assets and income and toward an insurance model.
The CLASS Act benefit is projected to be small, some estimates range in the $50 to $75 per day range, but after five years of payment into the system, participants would be eligible to receive benefits without the complicated asset issues raised by the Medicaid program. Think of the program as a small first step. It could help with at-home care for the disabled at any age and the very frail elderly. It could not deal with the much larger nursing home care expense.
In an Internet article published by Kaiser Family Foundation, probably the best source for long-term care analysis on the Web, at www.kaiserhealthnews.org, Howard Gleckman, senior research associate at the Urban Institute, raised the question “Will private long-term care insurance supplement the CLASS Act?”
Gleckman raised some valid issues. First, CLASS Act would have, as previously indicated, a small daily benefit. It could be assumed that a sizable number of participants would want more coverage. This additional coverage might be provided by private long-term care insurers.
If insurers worked with the system, they could offer supplemental coverage the way that we have Medicare Supplement plans and Medicare Advantage to supplement Medicare but, in this case, dedicated to long-term care insurance. The question is, would long-term care insurers want to offer this kind of supplement to the basic CLASS Act coverage?
A downside of working with the federal legislation is that coordination of coverages could be a problem. People who might receive benefits under CLASS Act might not be covered under the private policy. CLASS Act coverage would continue indefinitely. Most private insurers today offer policies covering no more than four to five years of care.
If insurers decided to compete with CLASS Act instead of working with it, both would likely suffer.
Governments have tried for years to encourage consumers to take out long-term care insurance. Pennsylvania not long ago spearheaded an effort called “Own Your Future” which provided contacts and links into private insurers.
There have been some positive signs on the horizon. Recently, on April 20, I wrote about hybrid long-term care insurance-life insurance and long-term care insurance-annuity products. See www.collitonlaw.com, “New Hybrid Insurances May Help With Long Term Care.”
There has been movement toward paying an upfront single premium to avoid the problem of declining income. Flexibility will be needed to deal with these very common concerns.
Janet Colliton is an elder law attorney whose offices, Colliton Law Associates PC, are located at 790 E. Market St., Suite 250, West Chester, PA 19382, 610-436-6674, colliton@collitonlaw.com. She is also, with Jeffrey Jones, CSA, co-founder of Life Transition Services LLC, a service for families with long-term care needs.
Comments
Monday, May 3, 2010
The Community Living Assistance Services and Supports Act
Dear Howard,
Many provisions in the recently enacted health reform law will take effect in the first year. The Community Living Assistance Services and Supports Act, or the CLASS Act, will go into effect January 2011, and will improve the lives of millions of Americans in need of long-term health care. Families USA has recently updated two of our reports, which highlight several of the benefits the long-term care community will receive through the CLASS ACT:
Helping People with Long-Term Health Care Needs: An Insurance Program to Help People Afford Long-Term Services and Supports
Helping People with Long-Term Health Care Needs: Improving Access to Home- and Community-Based Services in Medicaid
Many of us will need some form of long-term care in our lives, whether it’s when we get older, or if we have a disability, injury, or illness that requires assistance with daily activities. Unfortunately, our current system does not offer adequate options for long-term services. Helping People with Long-Term Health Care Needs: An Insurance Program to Help People Afford Long-Term Services and Supports discusses how the CLASS Act includes a voluntary insurance program that will help people afford the long-term services they need so they can remain living in the community longer.
Many people who currently require long-term care receive benefits through Medicaid. However, Medicaid is structured to favor institutional care over home- and community-based care. Helping People with Long-Term Health Care Needs: Improving Access to Home- and Community-Based Services in Medicaid discusses how the CLASS Act will allow states to create new options for Medicaid beneficiaries to obtain home-and community-based services and how it will create incentives for states to restructure their Medicaid programs to offer home-and community-based services.
Thank you for your tireless work to improve the health and quality of life of seniors and people with disabilities.
Best wishes,
Jessica Larochelle
Field Director
Families USA
Visit the web address below to tell your friends about this.
Tell-a-friend!
If you received this message from a friend, you can sign up for Families USA.
This message was sent to maldensenior@gmail.com. Visit your subscription management page to modify your email communication preferences or update your personal profile. To stop ALL email from Families USA, click to remove yourself from our lists (or reply via email with "remove or unsubscribe" in the subject line).
--------
Families USA | 1201 New York Ave., NW, Suite 1100, Washington, DC 20005
www.familiesusa.org | info@familiesusa.org
Many provisions in the recently enacted health reform law will take effect in the first year. The Community Living Assistance Services and Supports Act, or the CLASS Act, will go into effect January 2011, and will improve the lives of millions of Americans in need of long-term health care. Families USA has recently updated two of our reports, which highlight several of the benefits the long-term care community will receive through the CLASS ACT:
Helping People with Long-Term Health Care Needs: An Insurance Program to Help People Afford Long-Term Services and Supports
Helping People with Long-Term Health Care Needs: Improving Access to Home- and Community-Based Services in Medicaid
Many of us will need some form of long-term care in our lives, whether it’s when we get older, or if we have a disability, injury, or illness that requires assistance with daily activities. Unfortunately, our current system does not offer adequate options for long-term services. Helping People with Long-Term Health Care Needs: An Insurance Program to Help People Afford Long-Term Services and Supports discusses how the CLASS Act includes a voluntary insurance program that will help people afford the long-term services they need so they can remain living in the community longer.
Many people who currently require long-term care receive benefits through Medicaid. However, Medicaid is structured to favor institutional care over home- and community-based care. Helping People with Long-Term Health Care Needs: Improving Access to Home- and Community-Based Services in Medicaid discusses how the CLASS Act will allow states to create new options for Medicaid beneficiaries to obtain home-and community-based services and how it will create incentives for states to restructure their Medicaid programs to offer home-and community-based services.
Thank you for your tireless work to improve the health and quality of life of seniors and people with disabilities.
Best wishes,
Jessica Larochelle
Field Director
Families USA
Visit the web address below to tell your friends about this.
Tell-a-friend!
If you received this message from a friend, you can sign up for Families USA.
This message was sent to maldensenior@gmail.com. Visit your subscription management page to modify your email communication preferences or update your personal profile. To stop ALL email from Families USA, click to remove yourself from our lists (or reply via email with "remove or unsubscribe" in the subject line).
--------
Families USA | 1201 New York Ave., NW, Suite 1100, Washington, DC 20005
www.familiesusa.org | info@familiesusa.org
Saturday, May 1, 2010
WHAT IS LONG TERM CARE?
Many people without realizing it have already tapped into the long term Health Care System. THAT DOES NOT MEAN A NURSING HOME!!
We think of lond term care as only Senior Citizens but the term has a broader legal meaning. It could be that you become cognitively impaired
The Government has measurements called ADL's 6 activities of daily living
BATHING
DRESSING
TIOLETING
TRENSFERRING
CONTINENCE
EATING
If you have the expectation of not being able to manage at least two of these six activities you fall into the criteria Legal quidelines set out by law is the determination and determined by Madicaid or your private insurer Most of us associate nursing homes with long term care. this could be the last sad stop. there are also skeilled nursing care facilities,(assisted living centers) rehablilitation units, short term geriatrics centers and preferably for the majoirity of Seniors choice home based care from a variety of community, medical and religous agencies
We think of lond term care as only Senior Citizens but the term has a broader legal meaning. It could be that you become cognitively impaired
The Government has measurements called ADL's 6 activities of daily living
BATHING
DRESSING
TIOLETING
TRENSFERRING
CONTINENCE
EATING
If you have the expectation of not being able to manage at least two of these six activities you fall into the criteria Legal quidelines set out by law is the determination and determined by Madicaid or your private insurer Most of us associate nursing homes with long term care. this could be the last sad stop. there are also skeilled nursing care facilities,(assisted living centers) rehablilitation units, short term geriatrics centers and preferably for the majoirity of Seniors choice home based care from a variety of community, medical and religous agencies
Friday, April 30, 2010
The Solution: Health reform creates a new public insurance program
The Solution: Health reform creates a new public insurance program that covers long-term services that will help people stay in the community.
What Health Reform Does:„„
Health reform establishes the CLASS program, a voluntary public insurance program for long-term services. The program will start in 2011; the initial date to enroll has not been set. The program will be available to working adults. After a few years’ enrollment, individuals can stay in the program if they no longer work. There is a five-year vesting period. After that, enrollees who need long-term services will be eligible for a daily cash benefit. The benefit can be used to pay for services and supports such as home modifications that assist with continued community living.
The CLASS program will be fully financed by enrollee premiums, so it will not add to the deficit. „„
The program provides a cash benefit. The Secretary of Health and Human Services will „„develop benefit levels and premiums. Benefits will vary by level of disability, with a minimum of $50 a day. Premiums will likely vary by age at enrollment. Initial assessments indicate that, with an average benefit level of $75 a day, the program could be sustainable with monthly premiums that average $123. For full-time students between ages 18 and 22 and those with incomes below the poverty level, premiums will be $5 a month.
Why This Makes a Difference„„
The CLASS program will provide more reliable and more accessible assistance with the „„costs of home- and community-based care than most other coverage options that are available today.
The program will not deny coverage or charge a higher premium based on health status, „„like private insurance can. It is a lifetime benefit, so it pays as long as you need it; private insurance often limits the dollars or time period covered.
A $75-a-day benefit translates to $27,000 a year. While that may not pay for all of the care „„that someone needs, it can be a substantial contribution. The benefit will be adjusted to increase with inflation, something that not all private long-term care insurance policies do.
The CLASS program will keep many people from spending their assets to the point of „„reaching Medicaid eligibility. The Congressional Budget Office estimates that the program could save more than $3 billion in Medicaid costs in its first 10 years.
The CLASS program will give people a reliable benefit that will help them stay independ
What Health Reform Does:„„
Health reform establishes the CLASS program, a voluntary public insurance program for long-term services. The program will start in 2011; the initial date to enroll has not been set. The program will be available to working adults. After a few years’ enrollment, individuals can stay in the program if they no longer work. There is a five-year vesting period. After that, enrollees who need long-term services will be eligible for a daily cash benefit. The benefit can be used to pay for services and supports such as home modifications that assist with continued community living.
The CLASS program will be fully financed by enrollee premiums, so it will not add to the deficit. „„
The program provides a cash benefit. The Secretary of Health and Human Services will „„develop benefit levels and premiums. Benefits will vary by level of disability, with a minimum of $50 a day. Premiums will likely vary by age at enrollment. Initial assessments indicate that, with an average benefit level of $75 a day, the program could be sustainable with monthly premiums that average $123. For full-time students between ages 18 and 22 and those with incomes below the poverty level, premiums will be $5 a month.
Why This Makes a Difference„„
The CLASS program will provide more reliable and more accessible assistance with the „„costs of home- and community-based care than most other coverage options that are available today.
The program will not deny coverage or charge a higher premium based on health status, „„like private insurance can. It is a lifetime benefit, so it pays as long as you need it; private insurance often limits the dollars or time period covered.
A $75-a-day benefit translates to $27,000 a year. While that may not pay for all of the care „„that someone needs, it can be a substantial contribution. The benefit will be adjusted to increase with inflation, something that not all private long-term care insurance policies do.
The CLASS program will keep many people from spending their assets to the point of „„reaching Medicaid eligibility. The Congressional Budget Office estimates that the program could save more than $3 billion in Medicaid costs in its first 10 years.
The CLASS program will give people a reliable benefit that will help them stay independ
Helping People with Long-Term Health Care Needs:
An Insurance Program to Help People Afford
Long-Term Services and Supports
No one likes to think about getting old, getting sick, or having an accident and needing long-term help with daily activities. But as more of us are living longer—and often living longer with disabilities—more of us will need that kind of help.
Most people who need long-term services prefer to stay at home and receive the care that they need there, rather than having to move into an institution (such as a nursing home). For many, getting help at home can delay—or avert—the need for institutional care. Yet few people have insurance that will help pay for long-term services, in spite of the high cost of that type of care. The average hourly cost for a home health aide is $29, and homemaker services cost $18 an hour.
Health reform includes a voluntary insurance program, Community LIving Assistance Services and Supports (CLASS), that will help people afford the long-term services they need so that they can remain living in the community longer.
The Problem: Necessary Financial Protections That Many Don’t Have
About 70 percent of people over age 65 need some long-term services. But only about 9 percent of all adults have insurance that covers that type of care. There are several reasons for such low insurance rates. Employers don’t typically offer long-term care insurance, so people must buy policies in the individual market. That can be very expensive; benefits can be difficult to compare; and consumer protections for policy holders are often inadequate, which makes people wary of buying such policies. In addition, many people incorrectly believe that Medicare covers long-term services. In fact, Medicare coverage of these kinds of services is quite limited and does not include home- and community-based care.
Without insurance, the cost of long-term services can be financially devastating for the average family. Many eventually exhaust their financial resources and qualify for Medicaid, but that does not always mean that they will have access to the community-based care that many need and want. While Medicaid covers long-term nursing facility care, coverage of community-based care is optional and varies tremendously from state to state. There can be waiting lists; services are often not available statewide; and to qualify for care, there is often a requirement that a person be sick enough to need a nursing home.
From Families USA • April 2010
talking
about Health Care Reform
Long-Term Services and Supports
No one likes to think about getting old, getting sick, or having an accident and needing long-term help with daily activities. But as more of us are living longer—and often living longer with disabilities—more of us will need that kind of help.
Most people who need long-term services prefer to stay at home and receive the care that they need there, rather than having to move into an institution (such as a nursing home). For many, getting help at home can delay—or avert—the need for institutional care. Yet few people have insurance that will help pay for long-term services, in spite of the high cost of that type of care. The average hourly cost for a home health aide is $29, and homemaker services cost $18 an hour.
Health reform includes a voluntary insurance program, Community LIving Assistance Services and Supports (CLASS), that will help people afford the long-term services they need so that they can remain living in the community longer.
The Problem: Necessary Financial Protections That Many Don’t Have
About 70 percent of people over age 65 need some long-term services. But only about 9 percent of all adults have insurance that covers that type of care. There are several reasons for such low insurance rates. Employers don’t typically offer long-term care insurance, so people must buy policies in the individual market. That can be very expensive; benefits can be difficult to compare; and consumer protections for policy holders are often inadequate, which makes people wary of buying such policies. In addition, many people incorrectly believe that Medicare covers long-term services. In fact, Medicare coverage of these kinds of services is quite limited and does not include home- and community-based care.
Without insurance, the cost of long-term services can be financially devastating for the average family. Many eventually exhaust their financial resources and qualify for Medicaid, but that does not always mean that they will have access to the community-based care that many need and want. While Medicaid covers long-term nursing facility care, coverage of community-based care is optional and varies tremendously from state to state. There can be waiting lists; services are often not available statewide; and to qualify for care, there is often a requirement that a person be sick enough to need a nursing home.
From Families USA • April 2010
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