Little-Known Health Care Law Provision Is a Budget Buster, Critics Say
Patients are cared for at the emergency room at Jamaica Hospital in New York March 22. (AP Photo)
While Congress spent the last year debating how to provide health insurance for the uninsured, a little-known provision slipped into the heath care law that could cost some Americans upwards of $2,000 a year.
The Class Act, otherwise known as the
Community Living Assistance Services and Support Act, is the federal government's first long-term care insurance program.
Under-reported and the under the radar of most lawmakers, the program will allow workers to have an average of roughly $150 or $240 a month, based on age and salary, automatically deducted from their paycheck to save for long-term care.
The CLASS Act's $50 per day "average benefit" will only cover a small portion of the $75,000+ per year most Americans pay for in-home care. Most people who want to protect their savings will still need to purchase long-term care insurance.
ReplyDeleteOne of the biggest problems we face is that most Americans still think that Medicare or their medical insurance covers the cost of long term care.
The CLASS Act addresses this problem by making a very clear statement: You have to pay for your own long term care. You either have to pay for your own long term care by using your savings, the $50 per day CLASS Act benefit, long term care insurance, or a combination of these.
Most of the ten million Americans who own long term care insurance, own it because they've seen friends or family have to spend down their assets before qualifying for Medicaid. The CLASS Act will help alert the rest of the country to the fact that they need to financially plan for their future long term care needs.
There are 2 reasons the projected premiums for the CLASS Act are much higher than a comparable long term care insurance policy.
1) Anyone who is working (even just part-time) can enroll in the CLASS Act regardless of their health history. Enrollees with severe diabetes or crippling arthritis will pay the same amount for the CLASS Act benefit as those who are in perfect health.
2) Those who earn less than the federal poverty level will be automatically enrolled in the CLASS Act for only $5 per month (unless they opt-out). Their premiums are being subsidized by the rest of the enrollees.
Many of the leading long-term care insurance policies today can pay family caregivers.
Scott A. Olson
www.LTCInsuranceShopper.com