Health Reform and Long Term Care Health Insurance Changes

Have You Heard of The CLASS Act?

The CLASS act is not an old movie or a book about rules for good behavior. Instead it is a provision of health reform, that is voluntary, and may help some families make nursing care more affordable.

CLASS stands for Community Living Assistance Services and Supports. It is a pat of the new health reform bill. It was passed by the US Senate and House of Representatives. Workers will be enrolled in this program, but may choose to decline it at any time according to the wording in the bill.

What Does the CLASS Act Do?

It is a voluntary program. Employers will be required to deduct premiums, but employees can opt out of this program if they choose to.
Premiums have not been determined yet. It is believed they will be lower tor people with low incomes, but.that average workers can expect to pay about $120 a month
If people under the program become disabled, it will pay about $50 a day for nursing care. Note that these people do not have to be over 65 years old.
The nursing care could be from a nursing home, but it could also be in-home care, such as a home health aide, adult day care or assisted living. So it pays for nursing homes or alternatives.
The plan premiums are set to be adjusted at a rate that will keep it solvent without any federal funds.
The CLASS act is NOT A TAX. It is voluntary.

Will This Health Reform Measure Help?

There is no doubt that nursing care is expensive, and that most of us faced a high chance of needing long term care at some point in our lives. A nursing home can cost well over $100 a day so this new bill is just part of the picture. It would help, but not totally keep us from needing to rely upon other assets, long term care insurance or government aid.

Is There Already Government Help To Pay For Nursing Care?

Note that Medicare, the federal health insurance program for seniors and disabled people, does not pay for long term nursing care today. It only pays for short term stays. Medicaid, the federal heath insurance for the poor, only starts to pay after a person has almost exhausted their other assets.

Many people confuse Medicare and Medicaid. They do have similar names, but are very different programs. Some people are on both Medicare and Medicaid, but they are on them for different reasons. Medicare is for seniors and disabled people. Medicaid is for people with low assets and incomes.

What About Private Long Term Care Insurance Policies?

Again, even if a worker opts into the health reform plan, they cannot rely on $50 a day to fully pay for nursing home care. In fact, it may pay 30 - 50 percent of it. The other $50 - $100 a day would have to come from another source. This could be a private or group nursing home insurance policy, assets, or Medicaid.

This part of the plan has not been implemented yet. I also understand that there will be a waiting period, so nobody can sign up for the plan a few days before they need it. The benefits of this part of health reform are not going to affect us in the next few years, but may help younger people with their retirement planning.