Understanding the Class Act

By December 30, 2010Uncategorized

Understanding the CLASS Act

By December 30, 2010Uncategorized

Most of the discussion on the healthcare reform bill signed into law last March has been centered on the insurance industry.  For good reason, much of the public’s focus was on things like preexisting condition limitations and universal coverage.  A closer look at the actual legislation, however, reveals that there is more to healthcare reform than the hot button issues picked up on by the media.  For instance, a little-known provision called the Community Living Assistance Services and Supports (CLASS) Act is buried deep inside the health care reform bill that could have quite an impact on long-term health care over the long run.

CLASS is an attempt to reduce the strain on Medicaid spending that will become even more pronounced as more baby boomers reach the age of 65.  The debate about CLASS is far from over, but the legislation is starting to gather support as well as opposition.  Because it is still in its early phases, there is still a lot of uncertainty about how to best implement CLASS, and whether it will even fulfill its desired purpose of helping people obtain a viable alternative to financing long-term healthcare.  As it now stands, however, some of the basic ideas about CLASS are as follows:

  • The primary purpose of CLASS is to provide a means for people to obtain long-term healthcare without relying on Medicaid programs, such as ALTCS/Medicaid.
  • CLASS will be offered through employers, and employees will be allowed to opt out of the program.
  • Those who opt in to the program will pay premiums of between $150 and $250 per month, which will most likely be automatically deducted from their pay.
  • CLASS will also be available to those who are self-employed through an alternative means.
  • In return for monthly premiums, enrollees will be eligible for financial assistance of approximately $50 per day for long-term healthcare.
  • Before becoming eligible for the payout, however, enrollees must have paid into the program for five years.
  • Because the payouts are only $50 per day, CLASS appears to be most suitable for in-home care, which could delay or prevent the enrollee from requiring around-the-clock care in a nursing facility or assisted living center.
  • CLASS is not a mandatory program, so there is speculation that most healthy people will opt out of the program, causing the premiums to rise dramatically.
  • The program is unlikely to take effect until 2012, which means that it will not begin paying benefits until 2017, at the earliest.

The CLASS program has potential to be of great value to those who are willing to participate.  By no means, however, is CLASS likely to replace Arizona Medicaid programs as the primary provider of coverage for long-term healthcare.  First of all, CLASS is not projected to pay enrollees enough to cover care in a skilled nursing facility, so even those who enroll in the program may require additional assistance from ALTCS/Medicaid.  Second, CLASS does not begin paying out until enrollees have paid into the program for a minimum of five years, so only those who have planned sufficiently in advance can benefit from it.  Last, CLASS is not yet implemented, so it does nothing for those who are in more immediate need of assistance.  In the final analysis, the CLASS program will provide people with one more tool to help prepare for their future, but it will never render ALTCS/Medicaid obsolete.

 

Most of the discussion on the healthcare reform bill signed into law last March has been centered on the insurance industry.  For good reason, much of the public’s focus was on things like preexisting condition limitations and universal coverage.  A closer look at the actual legislation, however, reveals that there is more to healthcare reform than the hot button issues picked up on by the media.  For instance, a little-known provision called the Community Living Assistance Services and Supports (CLASS) Act is buried deep inside the health care reform bill that could have quite an impact on long-term health care over the long run.

CLASS is an attempt to reduce the strain on Medicaid spending that will become even more pronounced as more baby boomers reach the age of 65.  The debate about CLASS is far from over, but the legislation is starting to gather support as well as opposition.  Because it is still in its early phases, there is still a lot of uncertainty about how to best implement CLASS, and whether it will even fulfill its desired purpose of helping people obtain a viable alternative to financing long-term healthcare.  As it now stands, however, some of the basic ideas about CLASS are as follows:

 

  • The primary purpose of CLASS is to provide a means for people to obtain long-term healthcare without relying on Medicaid programs, such as ALTCS/Medicaid.
  • CLASS will be offered through employers, and employees will be allowed to opt out of the program.
  • Those who opt in to the program will pay premiums of between $150 and $250 per month, which will most likely be automatically deducted from their pay.
  • CLASS will also be available to those who are self-employed through an alternative means.
  • In return for monthly premiums, enrollees will be eligible for financial assistance of approximately $50 per day for long-term healthcare.
  • Before becoming eligible for the payout, however, enrollees must have paid into the program for five years.
  • Because the payouts are only $50 per day, CLASS appears to be most suitable for in-home care, which could delay or prevent the enrollee from requiring around-the-clock care in a nursing facility or assisted living center.
  • CLASS is not a mandatory program, so there is speculation that most healthy people will opt out of the program, causing the premiums to rise dramatically.
  • The program is unlikely to take effect until 2012, which means that it will not begin paying benefits until 2017, at the earliest.

 

The CLASS program has potential to be of great value to those who are willing to participate.  By no means, however, is CLASS likely to replace Arizona Medicaid programs as the primary provider of coverage for long-term healthcare.  First of all, CLASS is not projected to pay enrollees enough to cover care in a skilled nursing facility, so even those who enroll in the program may require additional assistance from ALTCS/Medicaid.  Second, CLASS does not begin paying out until enrollees have paid into the program for a minimum of five years, so only those who have planned sufficiently in advance can benefit from it.  Last, CLASS is not yet implemented, so it does nothing for those who are in more immediate need of assistance.  In the final analysis, the CLASS program will provide people with one more tool to help prepare for their future, but it will not render ALTCS/Medicaid obsolete.