Revising the Class Act

The Community Living Assistance Services and Support Act, better known as the Class Act, was part of last year’s health care law. The Act promises health insurance eligibility for most individuals who participate in at least some work, regardless of their health status. It also promises a $50 minimum daily benefit for individuals in need and a premium structure that offers discounts to lower-income individuals without requiring federal money.

These promises were ultimately too optimistic, however, and now Kathleen Sebelius, the secretary of health and human services, is attempting to revise the Class Act in an effort to make it both affordable and actuarially sound. Sebelius and her staff have the task of ensuring that the premium is not so high as to turn away healthy individuals or so low as to produce inadequate funds to pay claims.

Though many politicians are unhappy about the uncertainty surrounding the premium numbers, the need for the Class Act is undeniable. For example, even if an individual qualifies for Medicaid, no guarantee exists that Medicaid will cover the cost of the quality of care the individual desires. Additionally, Medicare typically will not cover as much of in-home care or nursing home costs as many individuals believe it will.

The Class Act has little chance of starting before 2013 though, so individuals who anticipate that they will need help before then may find security in buying long-term care coverage now, while keeping a close watch on the developments of the Class Act.

See Ron Lieber, The Changes to Save a Big Idea, N.Y. Times, Apr. 29, 2011. See also Revisions to the Class Act?, The New Old Age Blog, Apr. 29, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.