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.
At $110/month, why not obtain a real LTC insurance product and have coverage for home and a private nursing home on day one?
Lastly, the Section 125 provision was effectively stripped out of the Senate Finance Committee mark when some senators used the funding to fund other health care priorities.
John C. Greene, CLTC
Vice President of Congressional Affairs
Arlington, VA 22201