Health Care Reform and LTC: What is the CLASS Program?

The health care reform bill (now known as the Patient Protection and Affordable Care Act), which includes the Community Living Assistance Services and Supports (CLASS) provisions has been signed into law.

Many of the details of the CLASS provisions are not yet defined and will be developed through regulation. Most of the terms of the new CLASS program that passed as part of the Patient Protection and Affordable Care Act will be developed by the Department of Health and Human Services over the next few years. Certain terms are set in statute,

including the following:
Enrollees will:

• Pay a monthly premium, through payroll deduction, that has yet to be determined, but most recent estimates indicate that the average premium will be $180-$240/month; that premium could be increased yearly to ensure that the CLASS fund is actuarially sound.

• Be covered on a guaranteed-issue basis;

• Be eligible for benefits for their long-term care needs after paying premiums for the first 60 months of coverage (i.e., a 5-year waiting period) and have worked at least three of those five years;

• Receive a lifetime cash benefit after meeting benefit eligibility criteria, based on the degree of impairment, which is expected to average about $75/day or more than $27,000 per year and is payable as long as the claimant remains disabled.

Now that the bill has been signed into law by President Obama, it will go to the Department of Health and Human Services, where the terms of the program will be worked through. From there it will be two years before the program goes into effect and another five years from that point before anyone is eligible for benefits.

Delaying the purchase of an LTC insurance policy because you think that the government program will cover your long-term care costs is not recommended. Any delays in long-term care planning can have an effect on the cost of a policy and possibly your insurability.

The advantages of an individual private LTC insurance policy are many:

• It does not require that the individual be employed.
• Offers a broad range of benefits and is better suited to address the high cost of care
• It does not have a minimum number of years an individual must pay premiums before benefit are payable: the coverage will begin paying benefits once the benefits trigger and waiting periods have been met.
• Any unused LTC insurance benefits are carried over from year to year.
• The policy provides access to care coordination services, quality providers and provider discount.

If and when the CLASS provisions are up and running in about 7 years and you have been in the workforce and contributing to the pool, you may have yourself a additional supplement to your solid private LTC insurance policy.

For a Free, No Obligation Long-Term Care Financing and Planning Consultation