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About Long-Term Care Insurance from the Federal Government

Up until 2010, Medicare---the federal government's health insurance program for senior citizens---didn't cover long-term care services related to activities of daily living. The program covered medically necessary, skilled nursing services and only under certain conditions. The Patient Protection and Affordable Care Act of 2010 makes provisions for more all-inclusive long-term care benefits that include both types of long-term care services.

  1. The CLASS Act

    • The Community Living Assistance Services and Support Act, or the CLASS Act is a product of the Patient Protection and Affordable Care Act of 2010. In effect, it is designed to provide a consumer-financed insurance plan for long-term care needs. And while the details of the CLASS plan have yet to be worked out, the average monthly premium is expected to range around $123 a month as of 2011. Once a person has contributed into the plan for five years, he becomes eligible for a long-term care benefit of $75 a day.

    Eligibility

    • Under the CLASS Act, the federal government offers a health plan that allows people to pay into federally sponsored long-term care coverage through payroll deductions made by their employers. Provisions to allow self-employed people to participate in the program will also be incorporated into the program. Eligible participants include actively-at-work individuals, 18 years old or older, not currently living in a long-term care setting. People with pre-existing conditions, such as heart disease or disability conditions cannot be excluded from the program.

    Benefits

    • The CLASS Act plan provides cash benefits of no less than $50 a day based on a person's long-term care needs. A benefit payment scale determines cash benefit amounts based on payroll contribution amounts and the number of years a person has paid into the program. Under the CLASS plan, individuals receive benefits that cover services related to daily living activities, such as bathing, dressing and assistance with going to the bathroom. Benefit allotments are also inflation-sensitive, meaning benefit amounts will increase as inflation rates increase. In terms of lifetime limits on coverage, as of yet the CLASS plan has no lifetime limits on the total amount of benefits a person can receive.

    Conditions

    • The CLASS Act identifies certain conditions that must be met in order for plan participants to qualify for benefits. Participants must show a qualifying level of disability, meaning individuals must experience limitations in performing at least two daily living activities. Limitations must also persist for a minimum of 90 days in order to qualify for assistance. Qualified medical providers, such as doctors and healthcare professionals, make the determinations in terms of whether a person exhibits a qualifying level of disability. Eligible participants must pay into the plan for a minimum of five years and actively work three of the five years before becoming eligible for cash benefits.

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