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Proposed Health Care Reform Bills Contain LTC provisions
by Eileen Doherty, Executive Director
Senior Answers and Service
and the Colorado Gerontological Society
A little talked about provision in the health care debate is the CLASS act which is
part of both the Senate and the House health care reform bills. CLASS , Community Living Assistance Services and Supports Act , is
designed to provide America’s more than 10 million Americans who need long term care services and supports with financial support for
activities of living.
The need for long term will only continue to grow as the baby boomers reach retirement age and
experience more disabling conditions. Individuals would qualify for CLASS services similar to qualifications for long term care insurance.
Individuals who are unable to perform two or more activities of daily living, e.g. eating, bathing, dressing, transferring, or who
have a cognitive disability that requires supervision or assistance to perform those activities as a result of traumatic brain injury,
Alzheimer’s disease, multiple sclerosis, or mental retardation, would be eligible if the condition is expected to last more than 90 days.
Although not expected to supplant long term care insurance and/or Medicaid services for home
care and/or nursing home care, this program would not require underwriting and everyone would be entitled to receive benefits.
According to an analysis by the Congressional Budget Office and discussed by the Kaiser Family
Foundation, the plan to finance this program is through monthly premiums paid by voluntary payroll deductions. The plan is to
have working adults automatically enrolled in the program, unless they choose to opt out. If employers choose not to participate,
individuals can still participate by enrolling and paying premiums privately. Anyone is eligible except patients in hospitals,
nursing homes, rehabilitation and Medicaid beneficiaries.
Although premiums will be placed in a “Life Independence Account” for each eligible beneficiary
nd managed by the Department of Health and Human Services as a new insurance program, benefits are envisioned to be paid out of a trust
fund. Monthly premiums would be determined by a formula to have the trust fund solvent for 75 years. Low income individuals and
students would pay minimal amounts.
Individuals are expected to receive approximately a $50 per day cash benefit based on
disability. Given that the average cost of home care is between $20-$30 per hour and that nursing home care costs approximately $200
per day, the benefit is not intended to cover the entire cost of long term care, but rather to support the costs currently covered by
private pay, Medicaid, and long term care insurance.
Similar to Social Security, the individual would be eligible for benefits during their lifetime,
including to offset costs of nursing home placement. Individuals would be eligible to carry over benefits from month to month, but
not from year to year out of their account.
The net effect of this proposal would be to reduce the federal budget deficit by $74
billion during the period 2010-2019, primarily with savings in Medicaid. These estimates are based on a $123 per month premium for
employees and an average daily benefit of $75 for life, with an inflation factor. Individuals would have to pay into the program for
five years before they would be able to receive benefits, thus payouts from the program would not begin until after 2016.
This is a minimal benefit that begins to address the government’s responsibility
in meeting the long term care needs of an aging population. Coupled with the long term care insurance partnership initiative and
Medicaid reforms, this may provide another financing alternative for the community needs of an elderly population that needs more
assistance to live independently.
Eileen Doherty, MS is the Executive
Director of Senior Answers and Services and the Colorado Gerontological
Society, 3006 East Colfax, Denver CO 80206. She has more than 30 years of
experience in education and training, clinical practice, research, and public
policy in gerontology. You may reach her at 303-333-3482 or Doherty001@att.net
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