A plan to create a government-sponsored long-term care insurance program for consumers made it into the Affordable Health Care for America Act approved last weekend by the House of Representatives, and experts believe it will also be included in the Senate’s bill.

Called the Community Living Services and Support Act (CLASS), the bill would create a consumer-funded national long-term care and disability insurance trust. Consumers would pay premiums into the trust and would be eligible to receive benefits after a five-year vesting period to fund long-term care needs. The benefit would be tied to the level of disability, but the daily benefit is estimated at $50 to $75 per day.

There’s no debating the need to finance long-term care for aging Americans. The Urban Institute estimates that 25 percent of people over 65 will need help at some point in their lives for an extended period with some aspect of basic personal care–bathing, eating, getting in or out of bed or dressing. Medicare doesn’t fund such costs, and long-term care policies were created to plug the gap.

But relatively few purchase the policies. The business got off to a rocky start in the late 1980s and early 1990s, the result of complicated policies and, in some cases, under-priced premiums that led to unforeseen rate hikes. The market has since matured and regulatory safeguards have been put in place. Today, a handful of major players offer fairly solid, reliable coverage, but many consumers perceive the policies as expensive–or because they exist in a state of long-term care denial, as my colleague Steve Vernon writes elsewhere at RR this week.

The CLASS Act was a top priority for the late Sen. Edward M. Kennedy, D-Mass., and the Obama administration wants to see it included in the final health reform bill. It’s opposed by insurance companies and conservative legislators, who worry it would, when finally enacted, boost the federal deficit.

One proponent, Larry Minnix of the American Association of Homes and Services for the Aging, said this week that he’s confident the CLASS Act will make into the final health care reform bill that President Obama signs.

For a more detailed analysis of the pros and cons of the CLASS Act, see this article at AISHealth.com.

Related posts:

1. How to plan ahead for a long term care need
2. House health care bill extends COBRA, not the subsidy
3. Have you set aside $85,000 for long-term care yet?
4. A tax you need to plan for: retirement health care costs
5. House health care bill delivers on COBRA extension

Tags | long-term care