Responsible Long Term Care Planning
Forget long term care CLASS Act fashion because there is absolutely no reason to hang on to the hope that Congress will one day resurrect it. Its demise is actually a blessing because had the enrollment to this health care program pushed through, taxpayers will eventually find themselves in an unpleasant financial situation.
The Community Living Assistance Services and Supports Act, which is popularly known as CLASS Act, is a voluntary long term care insurance (LTCI) program that was created for members of the working class who cannot afford a private LTCI policy and are looking for a cheaper alternative.
However, after carefully evaluating the said health insurance program the U.S. Department of Health and Human Services (HSS) concluded there is no viable path forward for the implementation of the Act for the time being.
Prior to CLASS Act’s repeal, the HSS revealed that the program has been attracting a bigger percentage of older individuals who are at risk of requiring higher levels of care instead of young healthy people who are expected to sustain the Act’s pool of benefits.
If the program winds up spending more on benefits while collecting a miniscule amount of premiums from its members, it won’t take long before it dies a natural death. Now assuming it does not fold up, there’s the possibility that it would tap taxpayers’ money to be able to pay out benefits.
Long Term Care CLASS Act Inspired
Many people found CLASS Act very attractive in the beginning as it offered LTCI coverage for a low premium, not to mention the absence of medical underwriting.
Upon learning that the Act offers a maximum daily benefit amount of $50 to its qualifying members, younger people realized that they’re better off with a private LTCI policy.
Perhaps those who don’t follow LTC reports think $50 a day will be enough for in-home care services but those who keep abreast of the cost of care know that this amount is inadequate.
Responsible people don’t base their LTC plans on the current cost of care but on its future cost which is fourfold of what it is today.
For one to be able to receive topnotch LTC someday, he has to study the cost of care in his area and assess his future health care needs. He should use these factors, including the rate of inflation, in determining the maximum daily benefit amount of his LTCI policy.
Had CLASS Act been successfully implemented, its offerings will only jeopardize people’s finances and quicken their deaths. You’ll probably recall many financial advisers have discouraged the public from disregarding coverage from a private LTCI policy even if they enroll in the CLASS Act because what they’ll be getting from the latter won’t be sufficient for their LTC needs.
Since the cost of care is expected to soar continuously in the coming years, it is not advisable to depend on any health care program that is similar to the CLASS Act. As a matter of fact, had it not been for the limited long term care CLASS Act offerings which inspired people to change course, there could be more Americans with LTCI coverage by now.
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