A New Plan for Long-term Care

Nothing like gathering around the holiday dinner table to remind ourselves we’re getting older – as in aging.

 And the older generations is, well, older too.  And caregiving, for Gen X and baby boomers,  is a huge stressor…financially and emotionally..

 So the prospect of a government sponsored long-term care program should come as good news.  And it is, sort of.  Because the fact is that so many of the facts about the program are still unknown that it is hard to tell what kind of benefit it will be for the future.

 I’m referring to the CLASS Act program in the Health Care Reform bill.  It hasn’t gotten much notice yet.  It is the first time a widely available-long term care program will be in place to help older and disable individuals who can care completely for themselves.  The timing couldn’t be better with the first of the baby boomers turning 65 next year. 

CLASS stands for Community Living Assistance Services and Supporters Act.  It sets up a new voluntary national program which you will be able to sign up for, pay a monthly premium and receive benefits after five (5) years. The benefit is expected to be $50-$75 per day.   It will generally be offered through employers and workers will have to opt out of the program.  For those working but self-employed or their employer does not offer the program, consumers will be able to sign up directly. 

The benefits of the program, the cost to consumers and how it will work are details yet to be determined.  The government has until October, 2012 to issue rules.  Detractors fear only those who need the benefits will sign up, sending premiums high and bringing the viability of the program into question.  Of course, in any insurance program like this, it only works if both the healthy and not-so-healthy sign up.  

 So, what do you do now? That all depends on your situation, your health and health history and your appetite for risk.

 1. If you have long-term care insurance, hold onto it. 

2. If you are in your 50s or older, waiting for the government program might be a pretty high risk plan, since the details are incomplete right now.  But it is clear that you’ll need to pay in for five years before you can receive benefits.So waiting might not be realistic.  Or, you could consider a long-term care insurance benefit level that covers some of the potential costs and leave yourself room to add the government program.  Or you could look at a higher level of premium that you could reduce later if you wanted to add the government program.  Or proceed with a long-term care plan from a private company and know that you’ll probably opt out of the government program. 

If you are younger, you need to weigh the risk, your own personal financial situation and your potential need for long-term care.

Sorry, no quick and easy answer.  Your personal circumstances should dictate your decision.  Get help from an expert who can look at your circumstances and help you think through different financial scenarios. 

3. If you can’t qualify for long-term care insurance, the CLASS Act could be a great benefit for helping to pay for care in the future. Watch for details over the next year.

 So, we’ll keep watching for details on the CLASS Act. 

And while it might not help you with today’s long-term care needs, for millions of baby boomers and those in the sandwich generation, it’s a ray of hope for how we might finance our own long-term care.

 Because if there is one thing the bill makes clear, long-term care costs will continue to be a personal responsibility. 

Some links about the CLASS Act

 Kaiser Health News   

American Association for Long-term Care Insurance