A CLASS Act

Most of us don’t like to think about the day when we can no longer work because of a disability, or might need some kind of help with the basics of living as we age. However, it was something the late Senator Ted Kennedy thought about a lot. He knew that many Americans would eventually need some kind of extended care, and he also knew that most people preferred to stay at home, in their community, rather than going to a nursing home. His legacy is the CLASS Act (Community Living Assistance Services and Supports), a provision of the new Patient Protection and Affordable Care Act, aka health reform.

What the CLASS Act means is that you, or any working adult, may voluntarily choose to pay into a special long-term care pool; after five years you become vested. Once vested, you can receive benefits, regardless of age, diagnosis, or pre-existing condition. The caveat is that you have to be working – if you are already retired you cannot join this insurance pool, because it is based on payroll deductions, similar to social security.

Although we often think of long-term care as only for the elderly, many younger people need it too. What happens if you or a loved one develop a debilitating disease like MS, or are permanently injured in a car accident? Or what if you live to the age of 92, like my grandmother did? Ten million adults already need some kind of help with daily living activities, according to the Kaiser Family Foundation (KFF), and that number will certainly climb as more people live longer.

CLASS isn’t a panacea – it will probably provide somewhere between $50 and $75 a day towards care. But participants can choose how to use it and that can add up over the course of a month. For example, your neighbor with Parkinson’s Disease may want in-home help with activities of daily living (ADLs) like bathing, dressing, or cooking; but your elderly aunt may opt to use the payment towards some kind of institutional care – such as an adult day care center or senior living facility.

CLASS funding is “available to purchase non-medical services and supports necessary to maintain community residence” (The Kaiser Family Foundation). AARP noted that the cost of nursing homes averaging more than $50,000 annually – so keeping people in the community longer and actively making contributions to society is an important goal, from both cost and quality of life perspectives. The Congressional Budget Office (CBO) said that the CLASS Act would help to reduce the deficit through annual cost-savings and fewer Medicaid payments, since people will be in their own communities instead of nursing homes.

The law is written in such a way that premiums must cover any distributions – it’s a balanced budget. Some of the details are still being worked out by the Department of Health and Human Services, but already, advocates for the elderly and disabled are celebrating this as a major victory that will allow people to live in their communities longer, instead of being isolated in institutional environments.

If you would like to know more about CLASS check out the The Kaiser Family Foundation’s website; the California Health Advocates website, or download this brief from the National Council on Aging. Ted Kennedy’s Class Act – the vision endures.

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4 thoughts on “A CLASS Act

    1. You can pay into CLASS on your own if you are self-employed, as long as you do it for five years straight – that’s how long is needed to become vested. As for your existing LTC insurance, I don’t think anyone has quite figured all of this out yet – logic would dictate that is *should* work in a similar manner to a couple having two different insurance plans – your primary plan through your employer pays most of the costs, and the spouse’s plan picks up some of the balance.

      However, this is so new that HHS has not even written the regulations yet. I will keep an eye on this & update the information as it becomes available. Give it a few months & also contact your insurance agency as they may have a certain take on it.

    2. Robin, I was finally able to find out a tentative answer for you – according to Landmark: What Healthcare Reform Means for You, by the staff of the Washington Post, you can have both programs – CLASS would act as a supplement to whatever your other LTC policy didn’t cover (like a deductible, or an extra hour of a home health aide, for example).

      As I said previously, the rules haven’t been writter yet, but according to people with a good handle on this issue, what I described is the intent.

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