The New Long-Term Health Care Legislation

March 2010

Long-term care costs are financially devastating for many people. One of the little noticed changes brought about by the new health care legislation might provide low cost long-term care insurance for many Americans.

Question: How does the new law help people who have long-term care needs?

Answer: One of the provisions in the law is called the Community Living Assistance Services and Supports Act or the Class Act. Under this new law, employers may automatically enroll employees in the program. If you do not want to be covered, you must take the step of electing out of the program. If you do not elect out of the program, the government will take money from your paycheck and put it in a government Trust to fund the program.

Question: If you decide to participate in the program what are the benefits?

Answer: The program is not designed to replace long-term care insurance or pay the entire cost for long-term care. Instead, the program is designed to help cover some of the costs of care for individuals who no longer can perform certain daily activities such as dressing or bathing. The basics of the program are:

• Any employee 18 or over may be automatically enrolled in the program, unless they elect out or are already in a hospital. What this means is that anyone can be covered, no matter his or her health condition.
• You must pay premiums into the program for sixty (60) months.
• If you are no longer able to perform certain daily activities, you may be paid a benefit of $50.00 per day or more to help you offset some of the expenses of your home care or the cost of assisted living or a nursing home. If you are already receiving some Medicaid benefits for your home care, then you get to keep half the money and the other half will go to the state to help pay for the Medicaid benefits.

Question: How much will the government take out of a person's paycheck?

Answer: There is no clear-cut answer. Presumably, once the government has a chance to do some calculations, they will come up with a proposal. Keep an eye out, because as I mentioned, your employer could automatically enroll you in the program unless you elect out. Whatever the premiums, they will be reduced for lower income workers or full time students under age 22 who are working The program becomes effective next year.

I think it will be a while before we know enough about the program to see if it makes sense for most people. However, as we age as a population, everyone should take the time to make sure they have thought out how they will handle a situation where they no longer can live independently.