Health Reform Bill Includes Coverage for Long-Term Care Needs
With the clamor about the health care reform law, one of its most significant provisions has not had much attention. The Community Living Assistance Services and Supports (CLASS) Act establishes a new, public long-term care (LTC) insurance program.
The bill will not assist with Americans’ long-term care needs immediately because it requires people to pay into the system for five years before receiving benefits. Much is still being hammered out in the implementation of the new program but many expect that the system will not be put into place until 2013. That means benefits would not be paid out until 2018.
It is a voluntary program in which participants can have the monthly premium deducted from their paychecks. The premiums, which would be determined annually by the U.S. Health and Human Services Secretary, have been estimated to be anywhere from $65 to $240 a month. Participants would be able to receive from $50 to $75 a day to meet LTC needs such as bathing, dressing, getting in and out of bed and using a toilet (for those who become disabled). Recipients would be able to use the money for care in the home or at a facility.
Although some in the insurance industry have praised the legislation for bringing attention to the issue of long-term care, they also say the program could be counterproductive. That’s because the benefit is less than daily care costs now, which are hundreds of dollars. People might not buy private LTC insurance because they believe they will be covered by the government program – only to find the payout is inadequate when they need it most.
Proponents of the plan say the payment is not meant to cover all of a person’s LTC needs, but will help relieve the burden. For example, it would allow people to hire help for part of a day, allowing a disabled person to remain at home.
The legal and tax information contained in these articles is merely a summary of our understanding and interpretation of some current provisions of tax law and is not exhaustive. Consult your legal or tax advisor for advice concerning your particular circumstances.
