It appears that any final efforts to remove the CLASS Act from the Senate Health legislation have failed and thus it looks almost assured that we are witnessing the birth of a long-term care insurance plan that will be offered by the federal government.
Inevitably, the new plan will be included within newspaper and magazine stories that help American consumers understand what it all means to them. That will likely generate questions from people who already purchased long-term care insurance. It will inevitably bring up questions from those who are looking into it. It will certainly impact employers who will be the ones offering the federal plan to employees.
The American Association for Long-Term Care Insurance will develop succinct and factual talking points for consumers. The federal plan will provide benefits to many who would otherwise never be able to secure long-term care insurance protection.
It will likely also confuse many and will give people a false sense of security or a reason to put off planning for long-term care. That would be an enormous mistake.
We will be soliciting input from thought leaders and from the various insurers. Undoubtedly they will want to be prepared to handle calls from inquiring customers.
If you have suggestions or wish to share statements you have seen, that would be most welcome.
Send them on to: Jesse Slome, E-mail: mailto:jslome@aaltci.org
Showing posts with label Congress. Show all posts
Showing posts with label Congress. Show all posts
Monday, December 7, 2009
Tuesday, November 10, 2009
Health Care Bill Contains Long-Term Care Insurance Option
The passage of H.R. 3962, the Affordable Health Care for America Act, contains provisions to establish a national voluntary long-term care insurance program.
Section 2581 of the nearly 2,000-page bill provides for the establishment of the Community Living Assistance Services and Supports (CLASS) program the purpose of which is to "establish a national voluntary insurance program for purchasing community living assistance services."
The measure aims to provide individuals with functional limitations with tools that will allow them to maintain their personal and financial independence and live in the community. The plan intends to offer insurance to those who are actively employed or those who are members of the uniformed services and is on active duty.
According to data compiled by the American Association for Long-Term Care Insurance, the cost of the government insurance program is expected to be close to $1,500-per-year for an individual; close to $3,000 for a couple with both spouses participating. The organization notes that individuals who are able to health qualify for private insurance will likely still be able to purchase significantly better protection for less money from private insurers. For those unable to health qualify for long-term care insurance, the CLASS plan will be a viable, though expensive option experts note.
The proposed government long-term care insurance plan is designed to commence some time before 2012, though many details including the final cost and benefits will still need to be worked out. Individuals who choose to pay the government-imposed insurance premiums will need to participate by paying insurance premiums for a minimum of five years -- or until 2017 -- in order to first be eligible for benefits.
The Congressional language requires that individuals "shall be automatically enrolled in the CLASS program by an employer" though an opt-out provision will be permitted for those who choose not to have the long-term care insurance premiums deducted from their pay check.
Once the Senate passes its health care reform bill, the House and Senate bills will have to be reconciled into one document and voted on again.
Section 2581 of the nearly 2,000-page bill provides for the establishment of the Community Living Assistance Services and Supports (CLASS) program the purpose of which is to "establish a national voluntary insurance program for purchasing community living assistance services."
The measure aims to provide individuals with functional limitations with tools that will allow them to maintain their personal and financial independence and live in the community. The plan intends to offer insurance to those who are actively employed or those who are members of the uniformed services and is on active duty.
According to data compiled by the American Association for Long-Term Care Insurance, the cost of the government insurance program is expected to be close to $1,500-per-year for an individual; close to $3,000 for a couple with both spouses participating. The organization notes that individuals who are able to health qualify for private insurance will likely still be able to purchase significantly better protection for less money from private insurers. For those unable to health qualify for long-term care insurance, the CLASS plan will be a viable, though expensive option experts note.
The proposed government long-term care insurance plan is designed to commence some time before 2012, though many details including the final cost and benefits will still need to be worked out. Individuals who choose to pay the government-imposed insurance premiums will need to participate by paying insurance premiums for a minimum of five years -- or until 2017 -- in order to first be eligible for benefits.
The Congressional language requires that individuals "shall be automatically enrolled in the CLASS program by an employer" though an opt-out provision will be permitted for those who choose not to have the long-term care insurance premiums deducted from their pay check.
Once the Senate passes its health care reform bill, the House and Senate bills will have to be reconciled into one document and voted on again.
Friday, December 19, 2008
Congressional Budget Office Recommends New Savings Program To Fund Purchase Of Long-Term Care Insurance
Congressional Budget Office Recommends Savings Program To Enable Americans To Purchase Long-Term Care Insurance
To aid the incoming 111th Congress and the Obama Administration, the Congressional Budget Office (CBO) has just released a 235-page report outlining 115 budget options for health care reform. The report expands on one the CBO's regular reports to the House and Senate Committees on the Budget. The authors claim the report presents ideas for reducing "and in some cases, increasing" federal spending on health care, altering federal health care programs and making (in again their words) "substantive changes to the nation's health insurance system.
When it comes to the long-term care section according to Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance, most of the changes will increase spending adding costs to an already strained federal program.
One proposal would require workers to contribute a percentage of their pretax wages to an individual account reserved specifically to pay for long-term care insurance. In the Congressional Budget Office’s estimation, a contribution of 1.2 percent of income subject to the Social Security payroll tax would meet the option’s funding requirements. Non-wage earners, such as stay-at-home spouses, would not be covered under this option.
Under the proposed plan, the accounts themselves would be administered by a federal entity, which would invest them in Treasury securities. The money in the account would be the property of the individual and would be part of the individual’s estate if he or she died before turning 65. At age 65, the balance of the account would be required to be used to purchase the most generous long-term care insurance policy available given that balance.
Here is a summary of the other proposals and some preliminary estimated costs:
1. Increase States' Flexibility to Offer Home- and Community-Based Services Through Medicaid State Plan Amendments. This option would increase Medicaid’s spending by an estimated $2.7 billion over the 2010–2014 period and by $8.1 billion over the 2010–2019 period.
2. Make Home and Community-Based Services a Mandatory Benefit Under Medicaid. This option would increase Medicaid spending by approximately $20 billion over the 2010–2014 period and by about $90 billion over the 2010–2019 period. That estimate incorporates a reduction in nursing home spending as a result of a modest decline—compared with current law—in the number of Medicaid beneficiaries who receive care in nursing homes and a subsequent increase in the number of individuals receiving home or community-based services.
3. Increase the Federal Matching Rate for Home and Community-Based Services and Decrease the Federal Matching Rate for Nursing Home Services. This option would increase Medicaid spending by about $8 billion over the 2010–2014 period and by about $13 billion over the 2010–2019 period.
4. Clarify Medicaid's Definition of Permissible Asset Transfers. This option would explicitly define which types of transfers are permissible. Because the rules are ambiguous, states tend to interpret them narrowly. This option would clarify that the following types of transfers are permissible:
Providing financial assistance to a family member for educational expenses;
Assisting a family member with medical expenses;
Assisting a family member facing a financial crisis, including a failing business or family farm;
Assisting an individual who is a caregiver for a family member or person with whom he or she lives; or
Donating funds to a church, religious organization, or charity.
Implementing this change would increase mandatory federal spending by about $2.6 billion over the 2010–2014 period and by $6 billion over the 2010–2019 period.
5. Increase the "Look-Back" Period for Transfers of Assets in Medicaid. This option would further extend that period from 60 months to 84 months for transfers made on or after October 1, 2009. Transfers made prior to that date would be subject to the 60-month look-back period. The look-back period would increase to 84 months over time, with the option generating its first budgetary effects in year six of the 10-year period from 2010 to 2019—that is, after 60 months had passed. Therefore, this change would have no effect on federal spending until 2015; over the period from 2015 through 2019, it would reduce spending by approximately $220 million.
6. Implement Policies That Encourage the Use of Advance Directives. Provided that appropriated funds were available, implementing those activities would increase federal discretionary spending by about $60 million over the 2010–2014 period and by $110 million over the 2010–2019 period. There would be a savings to Medicare of about $30 million over the 2010–2014 period and $100 million over the 2010–2019 period resulting from the portability of advance directives.
Here is the link to access the full report click on this link or paste the following address into your Web browser. The long-term care provisions are contained in Chapter 10 that actually begins on page 193. http://www.cbo.gov/ftpdocs/99xx/doc9925/12-18-HealthOptions.pdf
To aid the incoming 111th Congress and the Obama Administration, the Congressional Budget Office (CBO) has just released a 235-page report outlining 115 budget options for health care reform. The report expands on one the CBO's regular reports to the House and Senate Committees on the Budget. The authors claim the report presents ideas for reducing "and in some cases, increasing" federal spending on health care, altering federal health care programs and making (in again their words) "substantive changes to the nation's health insurance system.
When it comes to the long-term care section according to Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance, most of the changes will increase spending adding costs to an already strained federal program.
One proposal would require workers to contribute a percentage of their pretax wages to an individual account reserved specifically to pay for long-term care insurance. In the Congressional Budget Office’s estimation, a contribution of 1.2 percent of income subject to the Social Security payroll tax would meet the option’s funding requirements. Non-wage earners, such as stay-at-home spouses, would not be covered under this option.
Under the proposed plan, the accounts themselves would be administered by a federal entity, which would invest them in Treasury securities. The money in the account would be the property of the individual and would be part of the individual’s estate if he or she died before turning 65. At age 65, the balance of the account would be required to be used to purchase the most generous long-term care insurance policy available given that balance.
Here is a summary of the other proposals and some preliminary estimated costs:
1. Increase States' Flexibility to Offer Home- and Community-Based Services Through Medicaid State Plan Amendments. This option would increase Medicaid’s spending by an estimated $2.7 billion over the 2010–2014 period and by $8.1 billion over the 2010–2019 period.
2. Make Home and Community-Based Services a Mandatory Benefit Under Medicaid. This option would increase Medicaid spending by approximately $20 billion over the 2010–2014 period and by about $90 billion over the 2010–2019 period. That estimate incorporates a reduction in nursing home spending as a result of a modest decline—compared with current law—in the number of Medicaid beneficiaries who receive care in nursing homes and a subsequent increase in the number of individuals receiving home or community-based services.
3. Increase the Federal Matching Rate for Home and Community-Based Services and Decrease the Federal Matching Rate for Nursing Home Services. This option would increase Medicaid spending by about $8 billion over the 2010–2014 period and by about $13 billion over the 2010–2019 period.
4. Clarify Medicaid's Definition of Permissible Asset Transfers. This option would explicitly define which types of transfers are permissible. Because the rules are ambiguous, states tend to interpret them narrowly. This option would clarify that the following types of transfers are permissible:
Providing financial assistance to a family member for educational expenses;
Assisting a family member with medical expenses;
Assisting a family member facing a financial crisis, including a failing business or family farm;
Assisting an individual who is a caregiver for a family member or person with whom he or she lives; or
Donating funds to a church, religious organization, or charity.
Implementing this change would increase mandatory federal spending by about $2.6 billion over the 2010–2014 period and by $6 billion over the 2010–2019 period.
5. Increase the "Look-Back" Period for Transfers of Assets in Medicaid. This option would further extend that period from 60 months to 84 months for transfers made on or after October 1, 2009. Transfers made prior to that date would be subject to the 60-month look-back period. The look-back period would increase to 84 months over time, with the option generating its first budgetary effects in year six of the 10-year period from 2010 to 2019—that is, after 60 months had passed. Therefore, this change would have no effect on federal spending until 2015; over the period from 2015 through 2019, it would reduce spending by approximately $220 million.
6. Implement Policies That Encourage the Use of Advance Directives. Provided that appropriated funds were available, implementing those activities would increase federal discretionary spending by about $60 million over the 2010–2014 period and by $110 million over the 2010–2019 period. There would be a savings to Medicare of about $30 million over the 2010–2014 period and $100 million over the 2010–2019 period resulting from the portability of advance directives.
Here is the link to access the full report click on this link or paste the following address into your Web browser. The long-term care provisions are contained in Chapter 10 that actually begins on page 193. http://www.cbo.gov/ftpdocs/99xx/doc9925/12-18-HealthOptions.pdf
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