Federal LTC Plan

CLASS Act – Community Living Assistance Services and Support Act

Things everyone working person needs to know:

It will go into effect in 2012.

The exact premium that each of us will have to pay is still be decided upon.  However, experts speculate that it will be between $150 and $250 per month.

One will not have coverage until they have paid into the plan for 5 years.  If one is  depending upon the federal plan to pay for their long-term care one will not have any coverage for the next seven years.  An important fact to consider is that 39% of the people receiving LTC are under the age of 65.

Once one earns coverage, it will be a negligible amount. 

 Tier I – $50/day  – you require assistance with two out of the six Activities of Daily Living (ADLs)

 Tier II – $100/day - you require assistance with four of the six ADLs (seven years from now, if you need assistance with four out of the six ADLs, $100/day will not pay for an adequate amount of care for you to remain in your home nor will it cover a great deal of the cost of a facility.)

If one “misses the memo” on the rollout of these new required benefits, they may have this premium deducted from their check for some time until they notice what they are losing.  This will not be the optimal time to start planning for ones long-term care.

Most importantly, if one is genuinely interested in purchasing a private long-term care insurance policy, they will have to pay a significantly higher premium because:

They will be two years older.

Their health may have changed (they may not be able to qualify for coverage).

The cost of care will have risen.

The cost of the plans will have risen across the board.