Is Class Act Program Worth It?

When President Barack Obama signed the Community Living Assistance Services and Supports

Act or CLASS Act bill into a law, people have different speculations and high hopes for the success of the new program. The provisions in the 2400 page bill have been the limelight of national news.

The CLASS Act establishes the first voluntary program for long term care; this will be financed from the pool of monthly premiums paid by qualified members. The program is projected to take effect in 2013 until all details and provisions are defined coherently. The US Department of Health and Human Services is assigned to make necessary changes and implement rules for the program.

Eligibility

All actively working individuals full-time and part-time or self-employed individuals will be eligible for the CLASS Act. However, part-time employees should earn enough to pay Social Security taxes of about $1200. All of these working individuals are automatically enrolled in the program through their employers, but they can disjoin should they wish to opt out.

Health Qualifications

Private insurance companies require underwriting procedures for all applicants; this is to assure that no individuals with any pre-existing condition or serious health problem from getting benefits. The CLASS Act works its way to qualify all members despite of their health conditions. All qualified applicants need not undergo underwriting process.

Waiting Period

Unlike private long term care plan or policy that pays for daily, monthly, or yearly benefits, the CLASS Act requires a five-year waiting period before applicants receive the benefits. The projected CLASS Act benefits payment is in 2018.

As of employment status, members should be employed for at least three years before they become eligible for benefits.

Payments and Cost

Medicaid gets its budget primarily from taxpayers pool of money; otherwise, the CLASS Act will address this issue, without putting strain on the budget that should have been appropriated to other important national programs other than health care. All voluntary members will pay the monthly premiums that will be deducted from their paychecks, this works the same way with taxes and other deductibles. Self-employed individuals can freely join the program, but the provisions are yet to be determined in the coming years. Moreover, there still no exact provision on the amount of monthly premiums each individual will receive. The initial estimate of the Congressional Budget Office is $123 average monthly premiums.

Benefits

The Congressional Budget Office postulates a daily cash benefit of $75, provided to participants in need for assistance on two or more Activities for Daily living or ADLs such as eating, dressing, bathing, transferring, and continence. The law designates the minimum benefit of $50 a day.

Opting Out

Although all workers are automatically enrolled in the program, individuals can decline the participation or opt out. This is because the program is designed to be voluntary, and individuals may choose from other financing options like private long term care insurance.

by: Jessica Martinez

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