What Changes in the Health Care Law May Mean for Long-Term Care

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An article yesterday in the New York Times asked a panel of healthcare experts to weigh in on what the new Community Living Assistance Services and Supports Act will mean for long-term care in America.

The CLASS Act – which was one piece of the health care overhaul legislation – is the first national plan to help Americans who have no long-term care insurance.  Secretary of Health and Human Services Kathleen Sebelius is in charge of working out all the details, but so far this is what we know:

Eligibility: Working Americans.  Not retirees (unless they work part-time).  Not nonworking spouses.  Not the unemployed.

Cost:  Last fall, the Congressional Budget Office estimated a monthly premium of $123 based on a 5-6 percent participation rate among those who are eligible.  However, final costs are yet to be determined.  Those who do participate must pay premiums for five years before they can receive benefits.

Benefits:  The CBO assumed a cash benefit of $75 per day; the law says it must be a minimum of $50 per day.  This cash benefit is for living assistance help and was never intended to cover full home or nursing home care.  According to a market survey published by MetLife, the national average cost of an assisted-living facility was $37,572 in 2009; a $75 daily cash benefit would pay 73 percent of that.

It is estimated that two-thirds of Americans will need long-term care but will the CLASS Act be the answer?  The Times article summed it up this way:

In a way, the Class Act will give the country an option as appealing or as unattractive as we deserve. If we understand that paying for long-term care is largely a personal responsibility, then large numbers of people will buy insurance through the Class Act, which becomes a sustainable, affordable and helpful program. If too many people close their eyes and shrug their shoulders, trusting that their children or Medicare or God or someone else will provide, the Class Act will run into trouble. And so will they and their families.

Don’t run into trouble by failing to plan for your future.  For help, contact our California estate planning law firm.

Help is available to you by contacting your Southern California financial planning experts today.

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