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Long Term Care Blog

Long Term Care Insurance Class is in Session

by Jack Lenenberg

One of Ted Kennedy’s final acts as US Senator was to try to make long term care insurance affordable for most Americans.

Working on the Class Act for almost 10 years, Ted Kennedy finally succeeded when the Community Living Assistance Services and Support became law as part of President Obama’s 2010 Healthcare Reform Act.

The big question, however, is how viable economically is the program. And are employees better off with guaranteed issue benefits offered under the Class Act or with private medically underwritten long term care insurance?

The Class Act seems to promise a lot: guaranteed eligibility for employed individuals; a benefit of at least $50.00 to $75.00 a day; and premiums that offer discounted rates to low-income participants.

Recently, however, Karen Sebelius, the Secretary of Health and Human Services stated that the Class Act would need to be altered to be actuarially sound.  Ultimately, the challenge is to make sure the premium is not so low that there will not be enough money to pay claims; but not high enough to preclude the enrollment of enough young healthy individuals to subsidize the older unhealthy enrollees.

And therein lies the rub: the attractiveness of the guaranteed insurability to all active workers ensures that a large number of initial enrollees will be unhealthy individuals.

Quite simply, the theory of adverse selection assumes that the Class Act will initially attract any number of workers already diagnosed with chronic uninsurable long term care conditions such as multiple sclerosis, insulin dependent diabetes, obesity, prior stroke, obesity, or mild cognitive impairments.

Healthy employees will review the premiums and benefits offered and shop around for better deals. Because insurance is bought with one’s good health, employees will soon figure out----or will receive sound advice from a financial advisor or a long term care insurance specialist---that the Class Act is not a good deal for them.

Either way, the bottom line is that Medicare will not pay for your long term care; and Medicaid will only contribute once you have spent down all of your assets. Your family may or may not be able to provide your care for you.

Planning for long term care is an important enough of an issue that President Obama and Senator Ted Kennedy fought for its inclusion in the healthcare legislation. LTC Partner can help you explore the long term care insurance options available to you—whether through your employer as part of benefits under the Class Act or through a group long term care insurance plan; or outside of your employment capacity as an individual applicant.

Comparing your long term care insurance choices and options may be daunting for you. But, we are specialists and will help
you through the maze that is long term care insurance. Simply complete our long term care insurance quote request form to
get started or call us direct at 1-800-891-5824 and find out what the best options are for you.