Long Term Care Legislation: Pros and Cons of The CLASS Act

The Community Living Assistance Services and Supports Act, which is more popularly known as the CLASS Act, was the Obama administration’s stab at establishing a national insurance program for the U.S. However, though the President already approved this particular long term care legislation early in 2011, critics of the Act worked to prevent its implementation because of several key flaws they discovered through meticulous analysis and calculation.


From a high perspective, there are many good things to be said about the federal health care agenda. It’s easy to apply since even those who have been denied insurance policies before can still apply, and there are no strict underwriting procedures. There’s no mandatory inclusion – people have to voluntarily enroll in the program. Also, anyone older than 18 years old, employed, even if they’re still studying, can also apply.


The major difference between applying for membership in the CLASS Act and for private insurance is that the applicant’s health is not considered in the calculation of premiums. They only gauge if you are capable of regularly and religiously paying the premium. So, even if you’re already suffering from a chronic ailment or possess a disability, you won’t be automatically denied which is quite contrary when applying at a private insurance carrier.


There’s a downside to this open application and process though. Since there’s no strict underwriting, there will be an incredible number of insurance claims that the health department has to process, that could also later affect the cost of premiums.


The crux of this long term care legislation’s viability is that it is going to be wholly funded only by the collected premiums of its members and that absolutely no taxpayer money will be used to issue claims. After consistently paying for five years, a member can begin receiving the benefits they were promised when they would require long term care.


However, remember that membership is voluntary, so there’s no knowing how many people will actually enroll in the program. The government won’t be able to predict how much funds the CLASS Act can actually collect. And in the face of growing costs of care every year, it might not have enough funds to actually pay for claims.


Then there’s the benefit amount itself. The benefit amount you receive will depend on your condition, up to a maximum of $50 per day, but you won’t be able to know beforehand how much you’ll receive until after you already need it. This is very uncertain planning at best, which unlike a private policy could result in you spending a lot of money anyway. $50 a day is hardly sufficient to pay for health care expenses in the future.


Advocates of the program still hope that by modifying some of its components and provisions, the CLASS Act can be improved and become viable. Though most would be hoping a long time for a better national insurance plan to be implemented one day, waiting and not preparing at all for long term care costs would be worse.


It would take a long time for lawmakers to finally create a long term care legislation that can allow the government to answer our health care needs. Meanwhile, waiting only is not a good idea. You will need to start preparing for future long term care costs as soon as you can.



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