One of the most important pieces of the recently enacted “Patient Protection and Affordable Care Act” is the “CLASS Act“, which stands for the Community Living Assistance Services and Supports program. Authored by the late Senator Ted Kennedy and others, it creates — for the very first time — a long term care insurance plan to help those with functional impairments pay for necessary care at home or in their communities. While the daily benefit is limited, the CLASS Act will help many continue to live at home or in assisted living facilities, rather than be forced prematurely into a nursing home in order to qualify for government assistance. Some key features of the program are:
(1) enrollment is open to those who are employed and choose to make voluntary monthly contributions to the program, and there is no underwriting exclusion based on pre-existing conditions; enrollment will open January 1, 2011; (2) eligibility kicks in only after the individual has been enrolled in the voluntary payroll deduction program for 5 years, but the payout will not begin until 2017; (3) benefits will be a minimum of $50/day but be scaled up as high as $75/day, depending upon the degree of impairment, and there is no lifetime “cap” on payout; (4) benefits will coordinate with government assistance from the Medi-Cal program, such that CLASS benefits will have no effect on eligibility for Medi-Cal, Medicare, Social Security Retirement or Disability benefits, nor SSI. In fact, persons in nursing homes who qualify for CLASS benefits will be able to retain 5% of their daily or weekly cash benefit without seeing a reduction in their Medi-Cal subsidy.
Unfortunately, because of the 5 year vesting requirement and the companion requirement that the individual be employed for at least 3 out of those 5 years, most currently retired seniors will not see any direct benefit from the program. However, seniors can, and should in our view, encourage their children and family members who are still employed to sign up. That encouragement can be a part of the parents’ legacy to their own children, just as Senator Kennedy left his legacy to the nation.
For more on topic, see the following fact sheet prepared by the Kaiser Family Foundation.