NEW YORK (6/23/10)--The new health care bill President Barack Obama signed into law in March includes a national voluntary insurance program for purchasing long-term-care services, called CLASS, for the Community Living Assistance Services and Supports program (SmartMoney
June 11). Working people age 18 or older will have the option to use CLASS, through voluntary payroll deductions, to take the place of or supplement private long-term-care insurance (LTC). The program is expected to launch next year. Why would you want more insurance? If you become disabled, traditional insurance, private LTC, Medicare, Medicaid, and your loving family most likely will not be enough to allow you to stay in your home and out of institutional settings (The New York Times
March 24). Here’s what you need to know about CLASS:
* Enrollment. If you are working, you can enroll no matter what pre-existing conditions you have. You can have premiums deducted from your paychecks if your employer participates. Some employers will enroll workers automatically and provide an opt-out if they choose. * Eligibility for benefits. You become eligible for benefits when you need help with two or more activities of daily living (ADL), as long as you’ve worked the previous three years and have contributed for at least five years. ADLs include preparing meals, eating, bathing, dressing, helping with medications, using the toilet, and so on. * Cash benefits. The cash benefits can be used to pay for home care services, nursing home care, assisted living care, or adult day care. CLASS benefits won’t cover all your costs for long-term care. The details are being ironed out--it may take awhile--but the Congressional Budget Office expects they’ll average $75 a day, and be no less than $50 a day.
You might do better getting private LTC insurance, but perform a careful comparison. Fewer than 10% of older adults have bought private LTC policies. The daily cost benefits are not the only differences between CLASS and private LTC insurance. Look at the consumer protection provisions, lifetime benefits, lifetime premiums, discounts, and other features, as well as the daily cost benefits.