CLASS Act: Long-term Care Insurance on Hold Now

Senior care can cost from $80 to $300 per day, when full service hands-on care is needed.  You can check out the daily costs of nursing homes nationwide and also learn about senior home care services in your area to understand the rates and services offered.

In an effort to help pay for senior caregiving services, former Senator Ted Kennedy championed the CLASS Act, a program which would allow working Americans to deduct money from their paycheck to go towards this benefit.  After working for a minimum of 5 years, anyone who qualified for needing care services would receive a benefit from $50 to $75 a day.

The CLASS Act was passed as part of the new healthcare law, with the Secretary of Health and Human Services given the job of outlining the specifics of the program, with a deadline of October, 2012.

Kathleen Sebelius, the Secretary of Health and Human Services, told Contgress last week that she does not see a way to make this new long-term care insurance benefit viable for everyone.  Medicare's cheive actuary, Richard Foster, wrote a memo to Congress in April of this  year, saying he feared a significant risk of failure as sicker people would tend to sign-up for the program, which would have voluntary participation.

Right now, if a senior does not own more than $2,000 in assets and has a very low monthly income, they will qualify for Medicaid care which will pay for nursing home care ongoing.  Otherwise, the senior is on their own to pay for senior care services.  It is possible for senior's with significant assets to "spend down" their assets paying for senior care services and then qualify for Medicaid.  However, this will become a financial challenge for the American government when more and more seniors, with the baby boomers aging, are expecting the government to pay for Medicaid nursing homes.

The CLASS Act was looked upon as one part of the solution to help pay for senior care needs.  Because tax payers are already on the hook for paying for Medicaid services, perhaps some of our financial wizards can come up with a long-term care program that would work for everyone. 


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