long term careOne aspect of the health care bill has received little publicity and could make a big difference in the lives of seniors. The Community Living Assistance Services and Supports Act (known as the CLASS Act), is designed to be a voluntary, federally-administered, consumer-financed insurance plan available through employers. The program will not rely on taxes — those who participate will pay monthly premiums. After five years, they’ll be covered and can receive benefits if they need care — whether they are 25 and disabled from a motorcycle accident, or 80 years-old with Parkinson’s disease.

According to the Department of Health and Human Services, there are 10 million Americans in need of long term care and support. As Baby Boomers age into retirement, these numbers will more than double. Private long term care insurance does exist, but fewer than 10 percent of older adults have bought such policies. That’s because the benefits are often limited, the premiums are high, and most folks just don’t want to think about reaching that point in their life. Many Americans may think that Medicare will help, but Medicare generally covers only the medical costs of long term care not the non-medical in-home or assisted living services that home care agencies and facilities provide.

The CLASS Act is designed to help people plan ahead for when they become frail or disabled. Once operational, its promoters say it will provide average benefits of no less than $50 per day to help people pay for non-medical expenses wherever it is that they call “home,” be it their personal residence where they live independently, or an assisted living or nursing home. Individuals may choose to retrofit their home, hire a home care aide, purchase assistive devices, or even enroll in adult day programs. The program is meant to supplement other funding sources such as personal savings, family caregiving, and private long-term-care insurance. The Congressional Budget Office estimates monthly premiums will average $123, or about $1,500 a year. The Department of Health and Human Services is expected to set regulations by October 2012, with enrollment beginning shortly thereafter.

There are a lot of unanswered questions about the new public program, but many hope that it will be popular among employed Americans over 50 who realize that neither private health insurance nor Medicare will cover their long-term care needs. The success of the program hinges on a big unknown — that is, how many people will actually buy into the Class Act — especially since most workers have not heard much about it yet. Another obstacle will be getting businesses on board because it is not mandatory and will require an enormous educational effort on the part of businesses to make people aware of the new benefit. The CLASS Act can’t succeed without significant participation to keep premiums at an affordable rate.