Long Term Care Insurance Blog » Medicare Medicaid Services

Some Thoughts About The CLASS Act

Ian — Fri, 14 May 2010 13:31:23 +0000

There have been many conversations of late about the CLASS Act and it’s impact on long term care & long term care insurance: what it means, what it will do to premiums, when it go into effect, etc. The folks over Center for Long Term Care Reform just happened to write about this very topic, so we thought we’d share a short blurb from their website:

This was a question they received:

“In January of 2011, the government will start taking between $150-$250 out of our paychecks every month. And, not to worry, there is no discrimination here. ALL of us will be taxed on this one. Rich, poor, everyone except people who don’t have a job, is included. If you have a job and get a pay check, the government will take this tax from you. Just to clarify, this is not a fee per household. It is a payroll tax deduction PER PERSON.”

Here is the reply:

“OK, let’s clear this up. First of all, nothing will start January 1, 2011. That’s just an effective date. No real plan is due until October 1, 2012.

“Secondly, no one knows what the premiums will be. That all depends on what CLASS can afford and still remain ‘actuarily solvent’ for 75 years.

“Regarding participation, employers may opt to automatically deduct CLASS premiums on behalf of the government. They don’t have to. I think most won’t.

“For employees of companies that opt not to enroll employees and for the self-employed, the government has to come up with alternative methods to ‘automatically’ opt them in. No matter what, anyone and everyone may opt not to participate in CLASS.

“CLASS is to be fully funded by participants’ contributions. No government money will be used. That’s in the law. But it is misleading. Because every penny CLASS collects will go to fund current government expenses, the only ‘reserves’ CLASS will retain will be IOUs, i.e. bonds, showing that the federal government borrowed the money.

“When it comes time for CLASS to pay claims, say in seven or eight years, as it will be 2013 before it starts and another five years before any claims are due, where will it get the money to pay? By cashing the bonds, which means the federal government will have to raise the funds, through extra taxes or printing money or borrowing more, to pay the CLASS claims. So much for the promise that no government funds will be used.

“But not to worry, this boondoggle will collapse of its own weight long before any of that comes to pass.”

What are your thoughts on CLASS Act? Do you believe the government will be able to replay claims when they start rolling in? Please share your comments!

Today’s Top Long-Term Care Stories

Ian — Thu, 06 May 2010 23:03:10 +0000

Long-Term Care Coverage Headed for Change in California – California Healthline
An Opinion on Long Term Care Insurance – Calgary Herald
New: a hybrid annuity with LTC coverage - bankrate.com
Putting together the pieces of the retirement puzzle - philly.com
Long-term care costs cheapest at home – US News

Part 1 – Long Term Care & The CLASS Act – What Is It?

Ian — Wed, 10 Mar 2010 06:11:05 +0000

We wanted to share some insight into something BIG that is hidden in much of the health care reform talk. It’s the CLASS Act – Community Living Assistance Services and Supports (CLASS) Act. In short, the government would provide certain long term care services (once someone pays into the program for a certain number of years.) You’ll hear both sides of the story, but for a quick overview, I’d recommend reading Howard Gleckman’s piece HERE

Every worker would get basic coverage under CLASS, for care either at-home or in a nursing facility. They’d pay premiums for five years, and they’d have to need help with at least two activities of daily living (such as bathing or dressing) before they’d be eligible for benefits. While these would be modest (perhaps $75 a day), they would be available in cash. It is hard to overestimate how significant this could be for those Americans who need assistance and the 40 million family members and friends who care for them.

Tomorrow we’ll share the first of some video interviews with Claude Thau, who comments on the CLASS Act and what it may mean for long term care and to long term care insurance companies.

Do You Know Who Pays For Long Term Care?

Ian — Wed, 23 Dec 2009 06:40:23 +0000

Have you ever thought about who actually pays for long term care? According to the Health Policy Institute, in 2007, a report confirmed that “…more than $200 billion is spent each year on long-term care in the US.”

That’s a lot of money, so it begs the question is, who is paying for this?

Those who are fortunate enough to have family near by can count on family for long term care, and therefore save lots of money. The reality is though, as families live further and further apart, this is becoming more difficult. So…

The top 5 payers of long term care are:

Medicaid – $101.1 billion
Medicare – $42.2 billion
Out-of-pocket – $37.4 billion
Private Health & Long Term Care Insurance – $14.9 billion
Other Private – $5.6 billion

These statistics, and a lot more, can be found in Kiplinger’s “The Next Step”, a fantastic workbook on planning for long term care. As mentioned in the workbook, reading these numbers may create an assumption that the government is willing to pay the bill for long term care. Click the image below to read more about why one, the government most likely isn’t going to cover the tab and two, why it’s important to educate yourself now about how to handle the escalating costs of long term care.
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Free Long Term Care Guide – What Does it Cost in My State?

Ian — Wed, 14 Oct 2009 18:11:02 +0000

Seven in ten people who live to age 65 will need some long-term care services at some point in their lives.

Click HERE (opens in PDF) to start reading this recently published guide by Kiplinger on everything you need to know about long term care and long term care insurance. Topics include:

what long term care costs are in your state
who pays for long term care (from Medicaid to your family)
how to, if you choose to do so, create the best long term care insurance policy that meets your needs.
what does long term care insurance cost
help from employers

And more. It’s a great read for anyone who wants to know more about long term care and how it can/will impact them later in life.

Click below to open the PDF

5 Common Questions About Long Term Care Insurance

Ian — Mon, 29 Jun 2009 17:48:21 +0000

As the debate over universal health care heats up, LTCI continues to receive far more attention then it used to. Some argue it needs to be further regulated, while others believe their just needs to be more transparency into how policies work.

Last week there was a new piece on long term care insurance in the NY Times, one that takes a stab at answering 5 pretty common questions regarding long term care insurance. These questions included:

What should I look for in a policy?

I’m only in my 50s. I don’t need to worry about this insurance yet, right?

Why should I buy this insurance?

Don’t Medicare and Medicaid cover long-term care?

This insurance is expensive. What can I do to get more for my money?

These are all very good issues to address, ones that we get often. Although some of the answers provided in the column lack details, they provide some basic answers for those looking into LTC insurance. We’ve covered many of these topics in past posts, including (click on any of the links to go to that post):

the medicare medicaid services issue (that is, neither of these services cover long term care under most circumstances.)
At What Age Should I Purchase Long Term Care Insurance & CLICK HERE
Reducing Long Term Care Insurance Premiums

Please feel free to contact us anytime you have questions regarding LTCI. You can also read the rest of the NY Times column HERE

Long Term Care Insurance Bill Introduced in House

Curt — Wed, 29 Apr 2009 13:57:50 +0000

In recognition of the enormous social and economic impact of long term care and the costs associated with that care, a bill was introduced in the House of Representatives to increase the accessibility of long term care insurance (LTCI) to Americans.

The “Long-Term Care Affordability and Security Act” would would permit LTCI to be included in employer-sponsored cafeteria plans and flexible spending accounts (FSAs), enabling people to pay LTCI premiums using pre-tax dollars.

You can visit govtrack.us to read the full text of the document and track the bill’s progress.

Managing the Cost of Long Term Care

Ian — Thu, 23 Apr 2009 22:25:31 +0000

Managing the cost of long term care. It’s a topic we often discuss here on the Long Term Care Insurance Blog, as we hope to educate and inform everyone about how to deal with both the financial and mental obligations that often fall hand-in-hand with with long term care. This is why we’re constantly browsing the web in search of resources we can share with our readers.

Today we came across an article on the WebMD website titled “How to Help Your Aging Parents without Going Broke“. (If you haven’t seen this site, take a moment to browse it’s huge library of resources.) So it’s not necessarily the most comforting headline, but it does get straight to the point. The article is broken into a couple sections, which are helpful, including “Have the Conversation”, “Get the Right Help”, “How to Save Money”, “Dealing with Alzheimer’s or Dementia” (Although the article goes into more detail about these specific issues, the discussion in the article can be applied to many long term care issues.) and “Paperwork Prep”.

One of the first issues the article tackles is that of your parents financial status. Are they prepared to pay for care out of their own pockets or have they purchased long term care insurance? This is very important, because understanding your parents financial stability (or instability) will greatly impact the type, and ability, to maintain quality long term care.

You can read the full article here. It discusses medicare medicaid services but also provides some input into ways you can lower costs of daily care.

If you have any questions regarding long term care, please don’t hesitate to contact us. We’ve experienced our own family long term care issues and will be happy to share our wealth of history on long term care.

Medicaid vs LTC Insurance – Which One Is Right?

Ian — Tue, 24 Mar 2009 00:00:52 +0000

It’s an ongoing topic of conversation, one that is often quite heated, and, at times confusing. We’ve written about medicare medicaid services in the past in an effort to educate what medicare & medicaid will, and won’t, cover, versus LTC insurance. In the end it is a personal decision, though the best thing to do is to simply contact a long term care insurance specialists and ask them questions, lots of questions. Discuss your situation, your health, your financial status. Take this information and sit it on overnight. Talk to friends an others who are in similar situations.

Why are we bringing up this topic again? Here’s the premise from a recent news story by the Washington Post, titled “Medicaid Planning Is the Wrong Call”.

My sister says our family should begin elaborate “Medicaid planning” to shelter our elderly parents’ assets and make them look poor enough to qualify for government-paid nursing-home assistance, even though they’re in good health today. I think this is unethical. What do you think?

What’s the right thing to do here? Is there a right answer? You can read the rest of the story HERE, but we’d love to hear your reaction.