Long Term Care Insurance and CLASS Act

KRUPALI JOSHI

Long term care

• A variety of services which help, meet both the medical and non-medical needs of people with a chronic illness or disability or cognitive impairment, who cannot care for themselves for long period of time

• Activities of Daily Living (ADLs) Bathing, Dressing, using the toilet, transferring (to or from bed and chair), caring for incontinence, eating

(U.S. Department of HHS)

Video

• http://www.youtube.com/watch?v=9sicwS_hb_M

• Real life story.

Long Term Care Insurance

• Long term care insurance helps provide for the cost of long term care beyond a pre-determined period and covers care generally not covered by health insurance, Medicare or Medicaid (The Demise of CLASS Act, November 2013, 7(11)).

Long Term Care Insurance

• Public Sector – Medicaid (federal / state funded program), primary

payer and only program providing comprehensive long term services ad supports. But to qualify for it legitimately people are either poor or depleted all their money paying for acute care.

- Medicare (completely federally funded)

(Elgin, L.(1993))

Long Term Care Insurance

• Private sector – Premium rates and coverage costs are very high. Two types:

• Tax Qualified policies – 1) require care for at least 90 days and unable to perform 2 or more ADL. 2) for at least 90 days, need substantial assistance due to severe cognitive impairment

• Non tax qualified

The Community Living Assistance Services and Supports Act (Section 8002 of Affordable

Care Act) • March 23,2010, PPACA – A program that

would expand the options for people who develop functional disability and require long term services and supports.

• The health reform law as amended by the health care and education reconciliation act of 2010 establishes a national, voluntary insurance program for being able to purchase community living services and supports.

CLASS Act

• People who need LTC would be provided a basic lifetime benefit of at least $50 a day, in the event of prolonged physical illness, disability, or severe cognitive impairment such as Alzheimer’s disease, which keeps a person from living independently.

(Kaiser Family Foundation, 2010)

CLASS Act

• The goal of this health Act was to provide workers and future retirees with a financing alternative so that they could be able to be financially independent, to afford long term services and supports, that provide community living without having to be impoverished and rely on Medicaid for these services. (KFF, 2010)

Implementation Issues

• However, the payout of CLASS benefits would not take effect until 2017, which leaves many current seniors and people with disabilities without affordable options to finance long term care.

• Other factors like the affordability of premiums and the adequacy of benefits for CLASS enrollees as well as participation rates that will impact the solvency of the program

Stakeholders View

• Denial - Nobody was willing to believe that they would have health problems in the future could need long term care, which kept most of the people away from taking up CLASS Act benefits

• Since it is a voluntary payroll deduction, participation rates will always remain a probability as the exact number of people and that their contribution can never be estimated.

Conclusion

• On October 14, 2011, HHS Secretary Kathleen Sebelius announced that the Obama Administration would not attempt to implement the C.L.A.S.S. Act.

• On January 1, 2013, the CLASS Act was officially repealed as part of the American Taxpayer Relief Act of 2012, known as the Fiscal Cliff Bill

Refrences• U.S. Department of Health and Human Services. Retrieved from

http://longtermcare.gov/the-basics/what-is-long-term-care/• Elgin, L. (1993). Long-term care insurance: issues and opportunities.

Nursing Economic$, 11(6), 358-363• The Henry J. Kaiser Family Foundation, Health Care Reform and the

CLASS act, April 28, 2010. http://kff.org/health-costs/issue-brief/health-care-reform-and-the-class-act/

• The Henry J. Kaiser Family Foundation, The Community Living Assistance Services and Supports (CLASS ) Act, Oct 01, 2009.http://kaiserfamilyfoundation.files.wordpress.com/2013/01/7996.pdf

• Mehta N, Jha S (2012) the PPACA in a nutshell, Journal of the American College of Radiology - December 2012 (Vol. 9, Issue 12, Pages 877-880, DOI: 10.1016/j.jacr.2012.09.009)