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November 11, 2009 at 07:00 PM
John C. Greene writes: Here are some thoughts on problems with the proposed Community Living Assistance Services and Supports Act, which was covered by LTC e-Wire’s October 2009 feature article.
I think that the long term care insurance industry would be happy to offer a cash benefit, but it turns out it would be highly expensive to do so.
As it is, if you have a LTC need in a nursing home, you only keep 5% of the benefit and the rest goes to the state to offset the cost of care, so you’ve essentially pre-paid for nursing home care through your premium payment. If you can stay in your home, the benefit may be better than nothing, but at about $110/month premium (for coverage under CLASS), I think many younger people will opt out.
The five-year vestment requirement is not a simple feature that I think will be attractive to consumers.
