A CLASS Act: Long-term health care



Tess Vigeland: The new health care law has been parsed over pretty thoroughly at this point. But one piece of it has gotten scant attention. It's called the CLASS Act, stands for Community Living Assistance Services and Supports. Boils down to a national plan for long-term care insurance.

If you're thinking long-term care isn't really something you need to worry about, well, our healthcare reporter Gregory Warner is here to explain why you should. Welcome to the show.


VIGELAND: So let's start with the basics. Define long-term care for us. What does that mean?

WARNER: Long-term care basically means help with the activities of daily living, like bathing, dressing, getting in and out of bed, and using the toilet. Of 10 million Americans who now need long-term care only about 60 percent are over 65, so we're talking about people who become disabled both old and young.

VIGELAND: Well, that's interesting because I think a lot of people when they think of long-term care think, oh, that's something I'm going to need when I get old.

WARNER: Well, exactly. I mean a lot of people have the attitude, oh, this doesn't apply to me, I'm not going to need that for another 40 years. And speaking for myself, I mean, I don't have long-term care insurance, even though it was offered through my job. I talked to Steve Edelstein of PHI, they're an organization that advocates for home-care aide workers. He says the older people are when they sign up for long-term care insurance, the higher the premiums.

STEVE EDELSTEIN: People don't even start thinking about it until they're in their 60s, and at that point they're just too close to the age of potentially needing it that it costs thousands and thousands of dollars.

VIGELAND: Thousands and thousands of dollars. That I would think would be what would keep people from getting on this kind of program. So let's talk a little bit about what this piece of the health-care reform law does to fix that situation.

WARNER: So now the government's passed a national long-term care insurance program. It's called the CLASS Act. And enrollment likely begins around 2013. The key feature here is that it's an opt-out program, so if you're making enough money to pay Social Security taxes you will automatically be enrolled. The big question is how much people will pay in premiums, and we're still waiting for the White House to tell us exactly how much. The Congressional Budget Office estimated average premiums at around $123 a month, but of course, there's a big difference between whether how old you are when you sign up, and how many Americans actually join in.

VIGELAND: So is this one of those pieces of insurance where the younger you join it, perhaps, the less your premiums are going to be, but you still get the same benefit?

WARNER: Exactly, because the younger you are when you start, the more money you will contribute before you finally need it. The pay-out that's expected, it will be something like a minimum of $50 a day or maybe $75 a day.

VIGELAND: Fifty or $75 a day... You know, if you're truly disabled, how far is $50 going to get you?

WARNER: Well, if you need full-time care, it doesn't get you far. A home health-care aide gets paid about 10 bucks an hour. So if you were to get this $50, say, and put it toward home care, a home care aide only, you'd get five hours. So someone to come over in the morning, help you, say, get out of bed, maybe make a meal. Those five hours could be the difference between going to a nursing home and being able to stay at home.

VIGELAND: But you know, I have to say in a nursing home, you would expect there's some basic level of care, but when you're talking about millions of Americans hiring home-care workers, who is watching that store?

WARNER: Well, exactly. I mean right now home-care aide workers, this is a low-paying job, and yet this is a huge business. I mean we spend $80 billion in this country on some three million home-care workers, and the legislation that we're talking about is supposed to now create a personal care advisory panel to basically advocate for more training, decent wages and more regulation of the industry.

VIGELAND: Now, how would this work? How would these payments be doled out then? Is the government then giving out checks?

WARNER: The government basically gives you a check, which then you spend. And you can even actually hire a family member, which could be great for family members who don't have to then choose between going to work and caring for a parent. Of course, at the same there's a big potential for fraud. I should mention though that you can't hire your spouse, because apparently the pledge to be there in sickness and health extends to long-term care.

VIGELAND: All right, Marketplace's Gregory Warner speaking to us about the CLASS Act. This is part of the health care reform law that's going to provide long-term care benefits. Thanks so much for the help.

WARNER: Thanks, Tess.


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