| With healthcare reform coming closer to reality, it is | | | | projected the monthly premium that will be deducted |
| increasingly likely that the final bill will include provisions | | | | from people's paychecks will need to be in the $120 |
| for the establishment of a federal long-term care | | | | range. That's about $1,500-per year, per-person or |
| insurance plan. The plan will provide little benefit for | | | | $3,000 for a couple if both husband and wife choose |
| anyone currently over age 55. | | | | to be covered. |
| The Community Living Assistance Services and | | | | The cost projection for the federal long-term care |
| Supports (CLASS) Act will provide for the creation of | | | | insurance is higher than one might anticipate simply |
| a voluntary long-term care insurance plan to be | | | | because the plan is intended to benefit those who |
| offered by employers on a voluntary, opt-out basis. | | | | are in poorer health and are unable to qualify for |
| Simply stated, that means your employer has to first | | | | traditional long-term care insurance available on the |
| choose to offer the plan and then you, as an eligible | | | | private market. Therein lies a most important point. |
| employee, will be given the chance to opt out of | | | | Is It Worth Considering? If you are in your mid-50s |
| having your paycheck reduced to pay for the | | | | or older, it's likely CLASS will be of little value to you. |
| coverage. | | | | That's simply because you will not have enough |
| While CLASS is years away from becoming reality, it | | | | years to pay into the system in order to become |
| could be a financially catastrophic mistake to assume | | | | eligible for benefits. If you are 55 now, you'll be 57 or |
| Uncle Sam now has established a plan for you. | | | | 58 when the plan is rolled out, and you'll need to be |
| The most essential pieces of information you'll want | | | | working and contributing for five years before being |
| to know are; 1) when will this plan become available, | | | | eligible for any benefits. |
| 2) what will it cost and 3) is CLASS something worth | | | | If you are not employed by a large employer. it's |
| considering compared to private long-term care | | | | likely you won't have access to CLASS initially. It's |
| insurance. And, the most important question; should | | | | likely the federal government will focus on getting |
| you wait until details pertaining to CLASS are | | | | larger employers to make this available to their |
| available. We'll explain all. | | | | employees and then hope it creeps down to smaller |
| The current health reform legislation that includes the | | | | employers. |
| CLASS provisions does little more than provide a | | | | If you are in good health, CLASS will be unattractive |
| framework without any specific details. Such | | | | (way too costly). Simply stated, because the plan will |
| important factors as actual costs, benefits to be paid | | | | allow those in poor health to qualify, those in good |
| are left to be worked out following the final passage | | | | health will subsidize the cost of those in poorer health |
| of healthcare reform and the signature of President | | | | and the ones who are more likely to be claiming |
| Obama. | | | | benefits. When you compare the cost for private |
| When Will The Plan Start? The CLASS program, if | | | | insurance, you'll be able to pay less for more benefits |
| enacted, is not expected to be operational prior to | | | | on the private marketplace. |
| 2012. Then, the program calls for a period of five | | | | CLASS' $50-per-day maximum benefit is pretty |
| years from when you pay your first premiums until | | | | meager by current standards. Granted, for those |
| you become eligible to claim benefits. As a result, | | | | with little or no savings, it's better than nothing (of |
| someone who starts the plan on Day 1 (assuming it | | | | course, assuming they can afford the payments). |
| is operational on January 1, 2012) will not be eligible | | | | And, that's really who CLASS is designed for -- those |
| for benefits until 2017. | | | | in poorer health, and with little savings to protect. |
| What Will The Plan Cost? The legislators drafting the | | | | The protection is also designed for care at home, not |
| CLASS Act have wisely not spelled out costs. Had | | | | in assisted living communities or skilled nursing homes. |
| they done so, it is likely the measure would have not | | | | For that, you'll need to look at traditional long-term |
| passed. | | | | care insurance. |
| They have given a ballpark estimate for desired | | | | And, finally, you'll be subjecting yourself to the trials |
| costs. They have spelled out a desired benefit (up to | | | | and tribulations of a new federal plan, a bureaucracy |
| $50-per-day). They have stated that the program | | | | and quite likely a plan that is significantly under priced. |
| should be financially viable without the need for | | | | Only time will tell whether future administrations |
| taxpayer bailouts. | | | | choose to have taxpayers pick up the shortfall or |
| For all those things to happen, the Chief Actuary for | | | | turn to plan participants. Unlike private long-term care |
| the U.S. Department of Health and Human Services's | | | | insurance that is heavily regulated by States, the |
| Centers for Medicare and Medicaid Services, has | | | | federal plan will be self-regulated. |