Earlier in the summer I wrote about President Obama’s support of the late Senator Ted Kennedy’s long term care insurance bill as part of health reform. While this proposal is an improvement over current programs, it does not provide the comprehensive solution families need to pay for the cost of long term care.
Caring for an elderly or infirm relative is both time consuming and expensive. According the Department of Health and Human Services, the US spends over $200 billion per year on long term care services. To give you an idea of what this means to a person receiving care, it costs between $18 and $29 per hour for home health care services and an average of $209 per day for a nursing home.
Medicare provides only limited coverage for long term care so the US has a piece meal system to cover these services. The most common ways to pay for care are:
- Long Term Care Insurance – About 10 million Americans have purchased these policies. While they help cover the cost of care, they generally cover less than 50% of the expense of long term care.
- Medicaid – This program that pays for long term care for people who are poor. Many people divest themselves of their assets to become eligible for Medicaid coverage. The rules vary by state. To learn more about each state’s requirements visit the Financing Care page of eCareDiary.com.
- Out of Pocket – About 20% of long term care costs are paid out of pocket by senior citizens and their families.
The current health reform proposals would add an affordable long term care insurance policy known as C.L.A.S.S. (Community Living Assistance Services and Support). Premiums would start around $100 for a 55 year old and would go up to $300 for a senior citizen. These are lower than what most people can get in the current private market. However, the coverage provided by them is relatively paltry with a $50 per day benefit for nursing home and home health care coverage. To put this benefit in perspective, this would only cover 25% of the average daily cost of a nursing home.
The US needs a better approach to long term care especially with the baby boomers getting ready to retire. When I was Legislative Director for Congressman Eliot Engel, I wrote legislation to create a long term care benefit in Medicare. The bill provided long term care coverage for nursing homes, rehabilitation facilities and home health care under Medicare. This is the type of comprehensive long term care policy we need to develop.
