|
|
(HealthNewsDigest.com) – Some 70 percent of senior citizens in America will need long-term care at some point in their lives. For them and their families, the emotional trauma of dealing with a prolonged and debilitating impairment will be overwhelming.
The government should not compound this trauma by promoting a poorly-designed insurance program that could leave seniors stuck with tens-of-thousands of dollars in unpaid and unexpected bills at the time they are least able to cope.
A little-noticed adjunct to the health care bill now before Congress would establish a long-term care program that promises much, but delivers little.
It’s called the Community Living Assistance Services and Supports (CLASS) Act. The legislation would establish a government-run program that is supposed to provide assistance to those needing long-term care. But the promises of the CLASS Act are illusory.
Under the CLASS Act, workers would sacrifice a portion of their paychecks to make regular payments to the federal government. Premiums would be “adjusted” annually to assure the program’s solvency. The payments would have to continue for at least five years before workers would receive benefits.
In exchange for these premiums, participants needing long-term care services would receive, on average, $50 per day from the government to cover the cost of these services. That may look good, but looks can be deceiving.
While CLASS Act proponents suggest the initial premium will be $110 per month, a recent analysis by the American Academy of Actuaries and Society of Actuaries indicated that to keep the program financially sound, the initial premium could be as high as $160 per month. And there is no limit to how high the premiums can rise.
The problem is that the CLASS Act payments would cover only a fraction of long-term care costs. The average cost for nursing home care is nearly $75,000 a year or $203 per day.
For round-the-clock home care by a Medicare-certified professional, the average cost is a staggering $1,100 day. The benefit offered by the CLASS Act barely begins to address the need.
Because of its high cost and inadequate benefit, the CLASS Act is unsustainable, a conclusion shared by the actuarial analysis noted above. Yet, many workers who participate in the CLASS Act will likely believe they have fully protected themselves and their loved ones from the crippling costs of long-term care. But this is a false hope. Already, many Americans mistakenly believe that Medicare covers long-term care costs. A new and poorly-structured government-run program will only increase the confusion, and may even discourage workers from properly preparing for their long-term care needs.
Lawmakers need to be forthright with Americans about the cost of long-term care and the shortcomings of the CLASS Act. Moreover, Congress should not allow real solutions to the problem of long-term care costs be shunted aside.
One solution is education. Americans need good, reliable information about the true cost of long-term care. This could be accomplished through increased funding for the Long-Term Care Clearinghouse, a program managed by the Department of Health and Human Services that promotes individual awareness of long-term care.
Another step is to reduce the real cost of long-term care insurance by allowing workers to purchase it with pre-tax dollars. Congress should allow long-term care insurance to be included in employer-sponsored cafeteria plans and flexible spending plans.
A third step is to expand the Long-Term Care Partnership program to all states. The program allows participants to keep a portion of their assets if they apply for Medicaid after receiving benefits from their Partnership-qualified long-term care insurance policy. This encourages participants to purchase long-term care insurance and helps states save on Medicaid expenditures. Partnership Programs are operational in 31 other states. It’s time for the remaining states to join.
These steps will do more to protect Americans from rising long-term care costs than yet another grandiose government-run program that promises more than it can possibly deliver.
Frank Keating is president and CEO of the American Council of Life Insurers. He is also a former two-term Oklahoma governor.
Subscribe to our FREE Ezine and be eligible for Health News, discounted products/services and coupons related to your Health. We publish 24/7.
HealthNewsDigest.com
We also create, produce and distribute tv/cable public service campaigns: HealthyTelevisionProductions