Possible Long Term Care Insurance Legislation on the Horizon? (Part 2)

                In my post last week, I talked about new legislation that is still in the drafting phase but that may be the next government attempt to provide a long term care benefit to Americans.  The last attempt, known as the CLASS Act, was a voluntary program.  This new program looks like it would be a mandatory one intended to provide universal coverage.

                As far as we currently know the current draft would provide a minimum benefit of 5 hours a day – about $100 a day on average nationally.  There would be an increase in the benefit as more care is needed but the details of that haven’t yet been worked out.  It would appear that anyone who receives Medicare Part A would be eligible for this benefit making it essentially universal.  Unlike Medicaid home care which requires recipients to use only Medicaid approved care providers the current draft provides that the new benefit would be the equivalent of cash in the sense that seniors could choose any provider they like and pay for it using a debit card.

                For the moment there appears to be two ways one could qualify.  Applicants can show that they need assistance with 2 activities of daily living (ADLs) and then wait 2 years before receiving benefits.  Alternatively, one could show the need for assistance with 3 ADLs and then pay a deductible without waiting 2 years.  It is not clear how much the deductible would be.

                5 hours a day of coverage is not nearly enough for many seniors who need round the clock care.  It is certain that many aging seniors will still spend large sums and become impoverished to the point of needing Medicaid so this isn’t going to be enough to solve the problem.

How to pay for this benefit is also up in the air.  Providing coverage to all Americans would be quite expensive.  We are already facing larger budget deficits as a result of last year’s income tax cuts.  Another benefit program would put more strain on the budget.

                This legislation is obviously just in the earliest stages and with the current political climate being what it is any expansive program is expected to have a difficult time getting through Congress and the President but it is something to watch in the coming year.