What Happened to Long Term Care CLASS Act?
Since the long term care CLASS Act was suspended, many varying opinions were voiced out with regards to its usefulness and effectiveness to serve the United States residents with its primary aim of providing cheaper and more affordable LTC insurance monthly premiums that the majority of the population would experience in the future.
After a 19-month trial to make it financially stable and possible, the Community Living Assistance Services and Supports, commonly known as CLASS Act, was canceled by Health and Human Services Secretary Kathleen Sebelius, saying, through a letter to the Congress, that although all the possibilities and best efforts were taken, there is no success in sight at implementing the CLASS Act now.
Originally, CLASS Act aims to reduce the expenses of Medicaid, which uses almost 40 percent of its fund to support and compensate the LTC-related needs of the public. With this alone, the Medicaid is said to spend almost $100 billion annually and that this amount is even expected to increase as time goes by.
It was supposed to be a consumer-financed insurance pool that will be administered and run by the government. The idea is that all working individuals will be enrolled to the program and that the premiums of their policies will be automatically deducted from their salaries.
The employers will be the ones responsible for deducting the premiums from their enrolled employees’ salaries and place it in their trust funds. The employers were also given the option to pay for a certain percentage of their employees’ monthly premiums but this is not mandatory.
Although automatically enrolled in the long term care CLASS Act, an individual may still opt to cancel his enrolment in the program especially if he already has his own LTC insurance plan from other insurance providers.
Some of the benefits of the program is that no one is denied of their LTC insurance even if they have poor health status and the monthly premiums only cost $5 a month, a price which is way cheaper than those offered with private insurance policies.
Those who are in favor of CLASS Act are deeply saddened by the cancellation of the program saying that the future of LTC insurance for those who cannot afford paying for their own private LTC plans already died and that there would be no other option for those who are considered average income earners and those who belong below the poverty line to experience owning an LTC insurance plan.
However, those who are critical of the program from the moment it was made into law say that they knew the program will not work and that the cancellation would come mainly because the guidelines and other details regarding the CLASS Act are not yet fully polished and are still vaguely implemented.
The long term care CLASS Act was signed into law by President Obama March of 2010. The effective date of the program starts on January 1, 2011 but was not fully operational until its cancellation on October of 2011.
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