About 70 percent of people over age 65 need some long-term services. But only about 9 percent of all adults have insurance that covers that type of care. There are several reasons for such low insurance rates. Employers don’t typically offer long-term care insurance, so people must buy policies in the individual market. That can be very expensive; benefits can be difficult to compare; and consumer protections for policy holders are often inadequate, which makes people wary of buying such policies. In addition, many people incorrectly believe that Medicare covers long-term services. In fact, Medicare coverage of these kinds of services is quite limited and does not include home-and community-based care.
Without insurance, the cost of long-term services can be financially devastating for the average family. Many eventually exhaust their financial resources and qualify for Medicaid, but that does not always mean that they will have access to the community-based care that many need and want. While Medicaid covers long-term nursing facility care, coverage of community-based care is optional and varies tremendously from state to state. There can be waiting lists; services are often not available statewide; and to qualify for care, there is often a requirement that a person be sick enough to need a nursing home.
Most people who need long-term services prefer to stay at home and receive the care that they need there, rather than having to move into an institution (such as a nursing home). For many, getting help at home can delay—or avert—the need for institutional care. Yet few people have insurance that will help pay for long-term services, in spite of the high cost of that type of care.
Until October 14, 2011 Health Care Reform included a voluntary insurance program, Community LIving Assistance Services and Supports (CLASS), that was supposed to help people afford the long-term services they need so that they could remain living in the community longer.
Known as CLASS, the Community Living Assistance Services and Supports program was a long-standing priority of the late Massachusetts Democratic Sen. Edward M. Kennedy.
Although sponsored by the government, CLASS was supposed to function as a self-sustaining voluntary insurance plan, open to working adults regardless of age or health. Workers would pay an affordable monthly premium during their careers and could collect a modest daily cash benefit of at least $50 if they became disabled later in life. The money could go for services at home or to help with nursing home bills.
But a central design flaw dogged CLASS. Unless large numbers of healthy people willingly signed up during their working years, soaring premiums driven by the needs of disabled beneficiaries would destabilize it, eventually requiring some kind of bailout.
Despite the flaws in the CLASS program it is wise to purchase long-term care before you need it. Check with your benefits department regarding employer sponsored long-term care programs or your local agent.