Toward national long-term care insurance

By Will Parry

The late Senator Edward Kennedy recognized the need for an insurance program that would provide services and supports for those Americans, millions in number, who become functionally disabled.

Kennedy directed his staff to work on the issue. The result was legislation that became the CLASS Act – for “Community Living Assistance Services and Supports.”

When President Obama signed the Patient Protection and Affordable Care Act into law on March 23, 2010, the CLASS program was established as a national, voluntary insurance program for the purchase of long-term services and supports.

As the name indicates, the intent of the legislation is to enable persons with disabilities to live out their lives in their own homes, or in another community setting, rather than in a nursing home.

The program would be open to any working adult who makes voluntary premium payments every month for at least five years.

Eligible adults would receive a cash benefit of no less than $50 a day. The actual daily amount would depend on the degree of impairment or disability. The money could be used to purchase non-medical services and supports – in-home care, for example – needed to maintain residence in the community.

The program would be financed entirely by premiums paid voluntarily by those persons who elected to enroll. The law specifically prohibits any taxpayer subsidy.

Unfortunately, the voluntary nature of enrollment has sidetracked the program in its present form. Healthy individuals would be unlikely to enroll. Those who elected to pay the monthly premiums would be persons most likely to incur a major and costly long-term disability.

Either mandatory enrollment by all working adults or a substantial tax subsidy would solve the funding problem. Kathleen Sebelius, secretary of Health and Human Services, says the law clearly gives her the authority to make the necessary changes without Congressional intervention.

Republicans are seeking repeal of the CLASS Act in pursuit of their goal of destroying the Affordable Care Act piece by piece.

Senior and disability advocates are calling on Congress to place the program on hold while workable funding mechanisms are explored. The program is urgently needed now. As the population ages, the need for the program will explode.

The White House opposes repeal. Obama’s 2012 budget seeks $93.5 million for a vast “information and education” campaign with the goal of having 7.7 million people in the program by 2015.

More than 50 senior and disability rights groups, unions and other advocacy organizations have sent a joint letter to House and Senate leaders calling on them not to repeal the legislation.

“We urge continued dialogue and development of a viable path forward,” the groups wrote. Their letter states that 70 percent of persons older than 65 will need long-term care services, which are not covered by Medicare.

Modest as it is, CLASS provides a framework for a universal insurance program that could protect every American against being impoverished by the costs of long-term care. It could stand alongside Social Security and Medicare as one of the nation’s hallmark social programs.

Senator Kennedy’s foresight has placed affordable, community-based long-term care on the national agenda. Clearing away the obstacles to implementation of the CLASS Act would make his vision a reality.

CLASS Act

A program to help the great majority of working Americans who have no long-term care insurance is an under-reported component of the new health care law.

Called the Community Living Assistance Services and Supports Act, or CLASS Act, the legislation translates into law a concept the late Senator Edward Kennedy and his staff had been working on since 2003. We are indebted to The New York Times for an authoritative explanation of the new program, based on The Times’ discussions with four experts on long-term care issues.

The CLASS Act is not the all-embracing long-term care social insurance program the nation needs. But it breaks significant new ground and provides a structure that can be expanded and strengthened in the years ahead.

Enrollment in the new program is expected to begin in 2013. Participation is voluntary and open to any working person who earns enough each year to pay Social Security taxes. Those who sign up must pay premiums for a vesting period of five years to qualify for benefits. The Congressional Budget Office (CBO) has estimated that the average monthly premium will be about $123 (less for younger enrollees, more for older ones).

CLASS is an “opt out” program. That means that if the employer participates, the worker is automatically enrolled unless the worker “opts out.” The enrolled worker becomes eligible for a daily benefit estimated at $75 if he or she needs help, either with two to three “activities of daily living,” or because of cognitive impairment. “Activities of daily living” include eating, bathing, dressing, using the toilet, continence care, and transferring from bed to chair or wheelchair.

Once a person qualifies, the daily benefit continues for as long as it is needed. This could mean many years of payments. About 40% of those currently receiving long-term care are young people who have had accidents or who have developed chronic illnesses.

The CLASS Act is not intended to pay the full cost of 24-hour care or a nursing home. But many persons with disabilities can stay out of nursing homes, or delay admission to one, with the act’s moderate levels of assistance supplementing family care.

Projections indicate that two-thirds of older Americans will sooner or later need long-term care. For all its limitations, the CLASS Act will give working people – those who have the foresight to enroll – an affordable way to avoid institutional care entirely, or at the very least, to ease its economic burden.


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