Long-Term Care Insurance, CLASS Act

As part of the new health care legislations, a new type of special needs insurance has been created. This insurance is federally run and is known as the Community Living Assistance Services and Support (CLASS) Act. Essentially it works like this: Those who choose to participate enroll in the program through their work. If, after having contributed for 5 years, the person becomes unable to function in at least 2 daily activities (such as eating, bathing, getting out of bed) on their own, then they qualify to receive home care assistance. The home care assistance is of no less than $50 a day, averaging $75 a day. The money received from CLASS will be able to be used for many different things, such as:

  • Transportation
  • A Nurse
  • Assistive technology (wheelchairs, lifts)
  • Adult Day Care
  • Home health aide
  • Household Modifications
  • To pay a family member that is assisting in caretaking
  • To help pay for assisted living or a nursing home

As great as this plan sounds, there are some major issues to consider with its functionality. The first and most prevalent is getting people to sign up for the insurance. Currently, only about 5% of employees choose to take part in their companies long-term care insurance policies, and about 7 million American own private policies. It is estimated that the average monthly premiums will start at about $123, and are supposed to completely cover all of the expenses. In other words, according to the act, there will be no government assistance to aid in the paying of benefits.

My opinion is that this is a great program if it get up and running. It will work essentially as a non-profit insurance company Meaning the premiums will not be used to pay off expensive CEO salaries AND benefits, but benefits alone. I feel they will need to do some trial and error before they get the benefits matched well with the premiums, but it can most definitely be achieved.



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