CLASS Act: The New Long Term Care Insurance Program

By: Jenny Nielsen

Currently, there are more than 10 million Americans requiring long term care services, and this number will surely heighten as the population of seniors and people with disabilities swells almost every year. Medicaid, the nation’s sole payer of health care including LTC services, is on the rough path; it gives more consideration to the impoverished Americans while the middle-income tax payers are left inside the loopholes that they find difficult to pass through. This is because Medicaid makes it more cumbersome for people to qualify for coverage by cutting the asset limit at very low rate; thus, the only option for the consumers is to spend down their assets or have their assets subject for recovery. Also, much has been expected from Medicare, but, just like Medicaid, it provides more limited coverage on skilled nursing or home care. Paying these services from own resources is no doubt devastating for individuals and their families given that nursing home rates range from $70,000 a year and home services range from $29 per hour.

Over the years, there have been government programs that address the catastrophic problem with long term care. Recently, the Congress and President Barack Obama signed a program that would expand long term care options and fill the gap of Medicaid and private insurance companies. The program is called the Community Living Assistance Services and Supports (CLASS) Act.

The Long Term Care CLASS Act is a national, voluntary insurance program that will bolster the welfare of individuals with functional limitations to enjoy non-medical services in the comforts of their own community or residences. The goal of this program is to provide another option for future retirees in financing their long-term care needs instead of relying on Medicaid to foot the bill.

Unlike Medicaid, the CLASS budget does not directly come from taxpayers; it is, on the other hand, financed by the monthly premiums paid by voluntary members. All working adults will be automatically enrolled in the program, unless they wish not to participate. All non-participating employers will have their working adults enrolled to another mechanism advised by the Secretary. This program excludes patients in nursing homes or hospitals, ICF/MR, IMD, or Medicaid beneficiaries. The premiums contributed by members will be placed in “Life Independence Account” on behalf of each eligible or contributing beneficiary. Everything in this program will be supervised and managed by the Department of Health and Human Services. The benefits will be paid out from the trust fund, but the monthly premium is yet to be determined by the Secretary of HHS with regard to the 75 year program solvency. People below poverty line and students could pay nominal premiums.

Qualified members should be at least 18 years old and have contributed monthly premiums for five years. However, the eligibility for benefits shall be decided by the state and limited to:

1. Individuals incapable of performing two or more activities of daily living (ADL) such as eating, dressing and bathing
2. Individual with cognitive disability or disorder that requires more advanced treatments. These include Alzheimer’s or dementia, multiple sclerosis, and traumatic brain injury.

Article Source: http://yourfinance.co.za

About The Author
The Class Act is the newest federal health care program. Visit www.completelongtermcare.com for a brief overview of Long Term Care Class Act and browse through long term care insurance glossary.