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Friday, March 26, 2010

ObamaCare Surprise: Long-Term Care Provision Could Cost Americans $2000 A Year Unless They Opt Out - Video 3/26/10


Here is a Fox News report on an almost totally unreported program tucked into the ObamaCare Law. It is a Long-Term Health Care Program that people will automatically be enrolled in by their employers unless they opt out. Those who are in, will have a premium of $146 a month (some say more) deducted from their paychecks. This will create a whole new huge Government program that the Federal Government will manage and pay out when people need Long-term care, either at home or in a nursing home.

While Congress spent the last year debating how to provide health insurance for the uninsured, a little-known provision slipped into the heath care law that could cost some Americans upwards of $2,000 a year.

The Class Act, otherwise known as the Community Living Assistance Services and Support Act, is the federal government's first long-term care insurance program.

Under-reported and the under the radar of most lawmakers, the program will allow workers to have an average of roughly $150 or $240 a month, based on age and salary, automatically deducted from their paycheck to save for long-term care. . .

Here's how the program will work:

-- The federal government will approach employers next year about alerting workers to the proposed deduction.

-- The deduction will work on a sliding scale based on age. Younger workers will be charged less, older workers more. The Congressional Budget Office pegged the average monthly deduction at $146. The Centers for Medicare and Medicaid Services put it higher, at $240.

-- After a five-year vesting period, enrollees who need help bathing, eating or dressing will be eligible to take out benefits, estimated to be around $75 a day for in-home care. . . . . .

"This creates a whole new bureaucracy that is going to break this country," Nunes said. "In the early years there will be money in it, but at the end of the day there won't be enough money to cover the problems because there will be too many people in the program." . . . MORE
 More of the joy of ObamaCare. Click here for an index of more consequences of ObamaCare.

6 comments:

Scott A Olson March 27, 2010 at 10:58 AM  

The CLASS Act's $50 per day "average benefit" will only cover a small portion of the $75,000+ per year most Americans pay right now for in-home care. Most people who want to protect their savings will still need to purchase long term care insurance to supplement the CLASS Act benefit.

The biggest problem we face is that most Americans still think that Medicare or their medical insurance covers the cost of long term care.

The CLASS Act addresses this problem by making a very clear statement: You have to pay for your own long term care. You either have to pay for your own long term care by using your savings, the $50 per day CLASS Act benefit, long term care insurance, or a combination of these.

Most of the ten million Americans who own long term care insurance, own it because they've seen friends or family have to spend down their assets before qualifying for Medicaid. The CLASS Act will help alert the rest of the country to the fact that they need to financially plan for their future long term care needs.

The CLASS Act will not be an option for those who are already disabled (and unable to work) or those who are retired and do not want to work. The law requires that in order to qualify for benefits, one must pay premiums for 5 years AND must be working for at least 3 of those 5 years.

The healthcare reform bill requires that the CLASS Act program:
• be actuarially sound,
• not funded by taxes, but all benefits must be paid from the premiums of the participants in the program, and
• Anyone who is working can enroll in the program, regardless of their health history.

Because of those requirements, the premiums that have been proposed by federal actuaries for the program are 2 to 3 times more expensive than a comparable long term care insurance policy.


Scott A. Olson
www.LTCInsuranceShopper.com

Brian March 27, 2010 at 12:11 PM  

Scott,
Thanks for the information. The problem about the opting out will be that not one of us knows what is really going to happen over the next 10-20 years with Health Care in America. If we end up with a totally Government-run system some day, then opting out could be a real problem if the Government is the only way to get Long-term Care. I have not seen whether the "opt out" option will be a one time decision, or if people could "opt-in" later on if it begins to look like it will be the only way to get Long-term care in the future.

There are just a lot of unknowns about how all of this will play out.

Doug Ross March 28, 2010 at 3:40 PM  

The CLASS Act is a great program if you believe everyone deserves to have at least a modest benefit for long-term care services. There are problems with it though. As currently structured you can opt-in to CLASS any time if you decide to opt-out in the beginning. So why would healthy people decide to opt in? This creates something insurance companies call "adverse selection". People with pre-existing conditions who are unable to pass the medical underwriting of private coverage will make up the majority of people that participate in CLASS. By statute, the premiums to participate in CLASS must be set to keep the program financially sound for 75 years. Because people that are more likely to need benefits in the future will participate proportionately more than healthy people, the premiums for CLASS will actually be more than private insurance coverage that has superior consumer protections against future premium increases.

Pauline April 17, 2010 at 10:50 PM  

$50/day is just a drop in the bucket. I'm 75 and partially disabled. So I hire a care person by the hour when necessary at $27/hour. I'm paying premiums for long term care that will kick in when I can no longer perform 3 life functions. But even that LTC benefit won't be enough to pay for one day's care; I'll need to make up the difference from my income. And LTC gets more expensive every year. Working people: don't waste your money for such lousy Obamacare coverage. If you're getting LTC insurance, buy it from a private company competing for your business with other private companies.

Louise May 19, 2010 at 10:47 PM  

Nothing like burdening your children and grandchildren with this debt......

Spence July 7, 2010 at 1:40 PM  

$50/day really doesn't pay for sqwat. It's certainly better than nothing and I agree with an earlier comment that the unisurable will dominate this government provision.

However, due to the large number of probable enrollees expect rationing and poor care quality.

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