By John Mills
Assistance to help people pay for the costs of long term care has been included in both the House and Senate healthcare reform packages. This bill, known as the CLASS Act, establishes a voluntary, affordable government long term care insurance program.
The coverage is designed to keep people in their own houses and out of institutions like nursing homes whenever possible. Some of the services covered under the CLASS Act include home care, respite care, home modifications, transportation, and assistive technologies.
The premiums will work in a similar manner to life insurance and will vary based on age at the time of purchase. They are expected to increase periodically with age.
In order to qualify for benefits, an individual is required to be 18 years old or older and have paid monthly premiums for at least 5 years. In order to receive coverage, a person must:
- Be unable to perform two or more activities of daily living (ADL) e.g. eating, bathing, dressing, transferring.
- Have a cognitive disability that requires supervision or hands-on assistance such as Alzheimer’s disease, multiple sclerosis or traumatic brain injury.
The benefit under the CLASS Act will be a minimum of $50 per day. While this amount does not cover the full cost of care, it will help many people by providing part time services. The latest National Alliance for Caregiving and AARP study found that the percent of people relying on paid caregivers has decreased from 45% in 2004 to 40% in 2008. Cost of care and tighter personal budgets during the economic downturn are probably the main reason so this benefit will help many people afford caregiving assistance.
As the baby boom generation retires over the next 10-15 years, the number of people needing care is going to increase substantially. The CLASS Act creates an affordable long term care insurance policy that will help people stay in their homes as they age. President Obama supports this program so it has a good chance of being in the final healthcare reform bill.