Medicare Won’t Go Broke But Seniors May-The Class Act
Long-term care comprises a variety of services that include medical and non-medical care for people with chronic disease or disability. These services include support services such as assistance with activities of daily living at home or in assisted living or nursing homes. Many seniors mistakenly believe that Medicare pays for long-term care. Well, it doesn’t and it can be very expensive. For example, if you don’t have long-term care insurance (which is obtained privately and can cost over $2500 per year if you’re over 60 years old) nursing home costs can run upwards of $75,000 per year! Medicaid does pay long-term care costs, but you have to be impoverished or you have to impoverish yourself by spending down all your wealth.
The new healthcare reform legislation contains the Community Living Assistance Services and Supports Act or the CLASS Act – Amends the Public Health Service Act to create a national, voluntary disability insurance program (CLASS program). This bill was the brain child of the late Senator Edward M. Kennedy. The Act essentially recognizes that the Graying of America is a demographic event that will dominate healthcare in this country for the next two decades and beyond. As 78 million boomers live into their eighties and nineties, more and more of them will need long-term care services at home or in nursing and assisted living facilities. Under the act: (1) all employees are automatically enrolled, but are allowed to opt out; (2) payroll deductions pay monthly premiums (roughly $146 a month); and (3) two-tiered benefits are provided, based on the level of disability, to purchase non-medical services and supports that the beneficiary needs to maintain independence. To obtain benefits, you’d have to be enrolled for at least five years, and the daily benefit is expected to be at least $50.
The CLASS Act will help end the financial/medical nightmare faced by seniors and their families by creating a way for enrollees in this voluntary saving program to get financial help for in-home, non-medical expenses when they develop disabilities. The Act will also save Medicaid billions of dollars for long-term care making the program financially viable and available to all who want to participate, no matter what your personal wealth may be.