There's another angle on LTC that folks should watch. The recently passed health care law included a voluntary federal LTCi provision (the CLASS program). It is going to be a big government giveaway to those enrolled in the program unless it is reformed (that's not a political statement or bashing of the law--the present HHS secretary has admitted that the CLASS act is "totally unsustainable" in its present form, which is plainly true). The law will likely be reformed or changed in some way eventually, but sometimes there are considerable benefits to getting a foot in the door of such a broken program. Our legislators and their staffs have proven to be sloppy in their work, and sometimes loopholes turn up.
There are a lot of unknowns about how the CLASS program might work, but the daily benefit is supposed to be a minimum of $50 per day (to be adjusted for inflation), but
other sources indicate it might be higher depending on degree of impairment. Premiums haven't been published, but the CRS estimated the average premiums would be about $123 per month. You have to pay premiums for 36 months out of the first 60 months you are enrolled in the program before you qualify for benefits.
What I need to find out--once you qualify for CLASS benefits (paid premiums for 36 months), if you are retired (no longer earning income subject to SS), are you still required to pay CLASS premiums? The legislation is set up to collect premiums via payroll deduction--hmm.
Observations:
-- $50 per day aint a lot, but it's something. It is enough to pay for about 25% of nursing home costs in most parts of the country, and could pay for home visits, etc. It will be indexed for inflation. There are signs that the government will offer higher amounts to those with more impairment. The legislation specifically states that the benefits won't count against the recipient when figuring Medicaid eligibility or other benefits, so Medicaid + CLASS might result in better accommodations. Also, unlike most commercial LTCI, the duration of the benefit is unlimited.
-- Government benefits tend to go up, not down.
-- If the premiums for this program are linked to employment or to income, ERed folks or the "flying under the radar" low income types might get make out.
So, keep your eyes open. Final rules should be set and published in the next year or two. Maybe this program will be worthless, but maybe not. An ER person might do alright, and it will almost certainly be a good deal for folks with risk factors that make it likely they'll need LTC (and therefor can't buy coverage commercially. This adverse selection is the main reason the federal program will probably lose tons of money, whatever the law says about it being self-supporting). With all the goodies being thrown around in DC, it's prudent to grab a net and scoop some up.
Anyone know?
