David M. Gilston Insurance Agency, Inc.

Nearly seven out of ten people turning 65 this year will experience some form of disability and will need paid or unpaid help with basic living activities. This creates the need for long-term care, which is quite expensive. The costs for nursing home care vary widely, averaging $6,500 per month. People who receive long-term care services at home spend an average of $1,800 per month. Medicare does not cover long-term care services. Medicaid pays for such services only for people with limited financial means; qualifying for Medicaid often means exhausting all other resources. To help provide another option, the government established the Community Living Assistance Services and Supports (CLASS) Act to be an optional, government-backed, long-term care insurance program for American workers to help pay for long-term services and supports they may need in the future. A five-year vesting period is required before benefits can be collected.

On October 14^th, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius publically recommended to halt the implementation of the CLASS Act. Sebelius claims she “does not see a viable path forward for CLASS implementation at this time” and recommends a halt to the implementation efforts. In the days following Sebelius’ recommendation to halt implementation, the Obama Administration announced that it would not support the repeal of the CLASS Act.

What does this mean to you?

A major area of concern is the cost for the CLASS Act. Because no taxpayer funds may be used to pay plan benefits, it is unlikely that the program will remain financially solvent. Long-term care needs vary, and therefore may be better suited to remain a personalized decision. The suspension of CLASS Act does not affect the rest of the health care law.

 Click here to read a blog article by HHS Secretary Kathleen Sebelius about her recommendations.

Click here to read more information about the CLASS Act.