Will CLASS Act’s Repeal Bode Bad News?
It was supposed to serve as an alternative to the private long term care insurance (LTCI) policy but the Department of Health and Human Services (HSS) came out one day with the news that the Community Living Assistance Services and Supports program, or simply CLASS Act, won’t work for the time being.
According to HHS Sec. Kathleen Sebelius in her letter to Congress, there is no viable path for the program’s implementation. There is no doubt there’s going to be a need to bust a blood vessel to restructure this health care law and until that happens, nobody in America will be able to benefit from it.
Though designed for the middle-class and poor who cannot afford private LTCI, the program forebodes higher premiums due to absence of a medical underwriting. It seems to be attracting a bigger percentage of elderly folks who are at risk of needing a higher level of care than younger people who are expected to sustain the pool of benefits which will be solely dependent on the collected premiums.
Before the Act came to be, many senior folks were worried about their future as most of them have been declined by insurance companies that are marketing and selling LTCI policies due to the fact that they have pre-existing conditions.
When the Act, which was proposed by the late Sen. Ted Kennedy, was enacted in 2010 many uninsured elderly found hope for their health care. Had it not folded up, enrollment to the program is expected to take place in the first quarter of 2013 after the HHS Secretary had finalized the Act’s benefit plan in October of 2012.
What Now Without CLASS Act?
With the demise of this federally-supported LTCI program, the retirement security of elderly folks approaching 65 is now an important subject to tackle.
Their retirement money and Social Security allowance won’t be sufficient for in-home care, not to mention assisted living or nursing home services. The average annual rate of a nursing home is $77,745 while that of an assisted living facility is $37,512. In-home care is not any cheaper as it would require you to spend at least $3,000 every month for a home health aide. Where will a monthly allowance of $1,000 or $1,080 from Soc Sec get you?
While it is good to have faith in the government, it won’t do you any good to bank on their promise of LTC coverage for every American. Everybody should have an individual LTC plan to ensure not only his protection but most especially his family’s.
Medicare and Medicaid should be crossed out from your options as these programs don’t promise much.
CLASS Act, on the other hand, would’ve served as a supplement to the standard LTCI policy but never as a substitute or an alternative. Many believe that it is not capable of providing a daily benefit that conforms to the current cost of care, plus its scope of LTC coverage is very limited compared to a private LTCI policy. Its demise should not even affect people’s plans since not everything about it was clear to begin with.
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