Coming Soon! A new national long-term care insurance program

Published 4:09 pm Friday, July 30, 2010

Dear Savvy Senior

Do you know anything about the new long-term care insurance program that was part of the healthcare reform law? Im interested in finding out some of the details but dont know where to look. What can you tell me?

Interested Patron

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Dear Interested,

The new insurance program youre inquiring about is known as the Community Living Assistance Services and Support (CLASS) Act, which was created to help the vast majority of Americans who dont have insurance for long-term care. Heres what you should know.

CLASS Overview

As part of the new healthcare reform law, CLASS is the governments first long-term care insurance program that will provide its participants with cash to help pay for long-term care services when they need it. CLASS will help pay for things like home health care, respite and adult day care, home modifications and homemaker services, as well as assisted living facilities and nursing home care. Statistics show that roughly two out of every three Americans, age 65 and older, will need long-term care at some point.

While many of the details of this new program are still being worked out, we do know that CLASS will be a voluntary program offered through employers, so to be eligible youll have to be working. Retirees will not be eligible (unless they continue to work part time), nor will nonworking spouses or the unemployed. Youll also have to pay premiums for a vested period of five years before you can receive benefits, and you have to continue working for three of those years.

If youre self-employed, or if your employer does not offer CLASS coverage, youll be able to sign up through a public program that has yet to be established.

Another great aspect of CLASS is that you cant be rejected for coverage because of your health, so it will help people with pre-existing medical conditions or a disability who dont qualify for private long-term-care insurance.

You also need to be aware that because of the size and scope of CLASS, it will be several years before the program is up and running. The U.S. health and human services secretary actually has until October 2012 to present the full details of the plan, so sign-up wont likely start until 2013.

What It Will Cost

The premiums youll have to pay to participate in CLASS are not yet known, but the Congressional Budget Office (CBO) estimates that theyll average around $123 per month (less for young enrollees, more for older ones). However, people living below the poverty line will pay only $5 a month. You also need to know that CLASS is an opt out program. That means that if your employer participates, youll automatically be enrolled unless you decline.

What It Will Provide

The law says the average minimum CLASS benefit must be at least $50 a day, but the CBO expects the benefit average to be in the $75 per day range enough to help pay for a home health aid but well below nursing home costs, which currently average around $200 a day. To receive benefits, youll have to be unable to perform two or three activities of daily living like eating, bathing, dressing, using the toilet or be cognitively impaired. Once you qualify, however, the benefits continue as long as you need care.

Savvy Tips: The U.S. Department of Health and Human Services will provide more information on CLASS as the details of the program unfold. In the meantime, the American Association of Homes and Services for the Aging offers some useful information on their website at

Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit

Jim Miller is a contributor to the NBC Today show and author of The Savvy Senior book.