Why Long-Term Care is So Hard to Provide

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The aim of the CLASS Act is not to create a new government entitlement program. It will be funded by the premiums of the participants (similar to Medicare Part B). And the $50 per day "average benefit" will only cover a small portion of the $60,000 per year most Americans pay right now for in-home care. Most people who want to protect their savings will still need to purchase long term care insurance to supplement the CLASS Act benefit.
The biggest problem 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 all three.
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.
Scott A. Olson
www.LTCInsuranceShopper.com

Scott A Olson of CA 11:05AM November 23, 2009

Your article was very good at looking at both the plus and minus side of what the plan can offer. It may very well go through with the Health Care reform which is now on the door step of Senate debate. However, when you couple the factors of premiums as high as $180 a month, 5 year waiting periods for benefits and only paying $50 a day in benefits you won't have many takers.
Current cost in facilities often exceed $200 a day in today's dollars, with home care ranging from $100-$150 per day. So, even with premiums being paid these people purchasing CLASS are still going to be out of pocket quite a bit of money.
Potentially it could save a few Medicaid dollars, but only if there is a huge buy in of the government run plan. Generally, people that need Medicaid can't afford a $180 a month premium, thus they spend down and qualify for Medicaid.
Bottom line. while the heart is in the right place for the plan, the overall fiscal feasibility is just not there.
Neil Gholson
President
Long Term Care Financial Solutions
http://www.longtermcareinsurance-guide.com

Neil Gholson of FL 4:17AM November 23, 2009

Thank you for a balanced look at the CLASS provision which will likely make it into the final health reform bill. The Congressional approach of passage first, details later is a most effective strategy. The federal government already offers a voluntary long-term care insurance plan to its own employees and other affiliated groups. Few signed up and claims started within days of the start date so why many are optimistic that millions will have their salaries reduced by $2,160 a year (that's what $180 a month amounts to) or $4,320 for a couple fail to have any basis for the expectation. What CLASS will do is create a new, underfunded entitlement program the cost of which will be borne by future generations starting in 15 years. Interestingly, the Medicare Chief Actuary who predicts how the plan will not be financially solvent is also the one (I believe) President Bush wanted fired for predicting the Medicare Drug plan wasn't properly priced. History, once again, will repeat itself - and taxpayers will pick up the tab.
Jesse Slome
Executive Director
American Association for Long-Term Care Insurance
http://www.aaltci.org

Jesse Slome of CA 12:14PM November 19, 2009

Thank you for a balanced look at the CLASS provision which will likely make it into the final health reform bill. The Congressional approach of passage first, details later is a most effective strategy. The federal government already offers a voluntary long-term care insurance plan to its own employees and other affiliated groups. Few signed up and claims started within days of the start date so why many are optimistic that millions will have their salaries reduced by $2,160 a year (that's what $180 a month amounts to) or $4,320 for a couple fail to have any basis for the expectation. What CLASS will do is create a new, underfunded entitlement program the cost of which will be borne by future generations starting in 15 years. Interestingly, the Medicare Chief Actuary who predicts how the plan will not be financially solvent is also the one (I believe) President Bush wanted fired for predicting the Medicare Drug plan wasn't properly priced. History, once again, will repeat itself - and taxpayers will pick up the tab.
Jesse Slome
Executive Director
American Association for Long-Term Care Insurance
http://www.aaltci.org

Jesse Slome of CA 12:14PM November 19, 2009