Knowing Long Term Care Class Act

What is CLASS Act? This stands for Community Living Assistance Services and Support Act

. This can be considered the first national and government facilitated Long Term Care insurance program. It focuses on the consumer financed insurance pool that is overseen by the trust fund from the government.

CLASS Act's main goal is to lessen the role of Medicaid, which as we know, pays for more than 40% of all the personal care for the elderly and people with disability. Nowadays, it is reported that Medicaid spends more or less one third of its whole budget on Long Term Care. If you will sum it up, Medicaid spends more than $100 billion a year, and it will only increase as the population ages too.

The Long Term Care CLASS Act is the newest measure that the government is taking in these past few years to ensure and encourage people to plan for Long Term Care, and, also, to get a Long Term Care Insurance. In the past few years, the government is doing a lot of things to expand the private Long Term Care insurance by tying Long Term Care coverage more closely to Medicaid, by having government-funded marketing campaigns and tax incentives. The elements of the bill were adapted from Deficit Reduction Act that took the initiative to expand the Long Term Care through the said ways.

Sometimes, health issues are also big factors in getting your personal insurance. If you already have an existing disease or health problem, other traditional private Long Term Care insurance will not allow you to avail their services. So the government saw this loophole and grabbed the opportunity to offer LTC coverage with limited benefits regardless of your health status. The CLASS Act has developed this service to cater to working adults without the fear of not meeting the health qualification requirements.

The Long Term Care Community Living Assistance Services and Support Act will take effect on January 1, 2011, but will not be operational immediately or not be fully working until 2013 or later. The bill has already been signed into law by Pres. Obama, and it will go now directly to the Department of Health and Human Services, wherein the services of the program will be acted upon. Although the said effective date is on Jan, 2010, the Secretary has until 2012 to work on a benefit plan of the program. They said that it will take another five more years from that time before anyone can be entitled for their benefits.

In CLASS Act, the government created an administrative structure wherein the people who will avail the services of the CLASS Act will pay a monthly premium, and will only be entitled for the limited benefits for their Long Term Care needs after five years of paying premiums. This is different from other government programs because the benefits will not come from the money of the tax payers, but from voluntary participants in the said program. The government also made it clear that they can raise the premiums in the future if they're having a hard time meeting the initial assumptions.

The CLASS Act looks promising to everyone, especially to those who already have existing health problems. They also have an affordable premium of $5 per month for students and $22 for people whose income is below the poverty line. The things that we have to remember before availing the program is that the predicted cost of the benefits of the program is $180-$240 per month, and it's higher that the currently charged for individual insurance for qualified buyers. Also, you still need to wait for five more years before you can be entitled to your benefits, and to think that those benefits are not yet clearly defined as of the moment.

by: Jessica Martinez

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