Not many folks understand the Healthcare Reform Act. Fewer still know that it has a long term care (LTC) provision called the CLASS Act. CLASS stands for “Community Living
Assistance Services and Supports. The law specifies that it is “a national voluntary insurance program”. The key word in the law is that it is “voluntary”. The law sets premiums at $5 per month for those below the official poverty line and for students. For others, the level of premiums are set to insure payments to plan participants without any subsidy from the government. The Secretary of Health and Human Services is expected to set benefits by October 2012, and then to begin enrolling workers. Benefits will depend on a person’s degree of impairment, but can’t average less than $50 per day. That’s $1500 per month. At current rates in California, 24 hour in-home care averages $7500 per month.
Bottom Line, LTC insurance, is like every other type of insurance: you hope you never need it and the money you paid was not just wasted. But if you do need it, it will have been one of the greatest purchases you ever made! The truth is, no matter how much LTC insurance you buy, it may not be enough. That is why pre-planning for Medicaid or other public benefits is so important. Here’s an article of mine that examines the topic from that perspective.