Long Term Care and the Class Act

By Joni Douglas

Long-term care is something that most of us don’t want to think about yet we all should. Most insurance companies offer long term care insurance but they are different and separate from their health insurance policies and not included in life insurance plans. Most people don’t realize the costs involved in long-term care until faced with the need either for themselves or for a family member.

The cost of long term care can vary from state to state and from need to need. The cost of nursing home care is much more costly than assisted living. These costs are unexpectedly huge and are very often overwhelming. Average costs for nursing home care, differ from state to state, and can range from just over $40,000 to over $100,000 per year. Average fees for your state can be calculated here – calculator.

Hidden within the Health Care Bill that Congress recently passed is the Community Living Assistance Services and Supports Act (CLASS ACT). This bill was first sponsored by Sen. Ted Kennedy, but did not have enough support, even by fellow Democrats, to make it to the Senate floor for a vote. Two days before the Senate voted on the health care, this Class Act provision was slipped into the bill where it did not need a full majority to pass. This addition to the bill is one of the most under-reported aspects of the health care bill.

Although the public option was removed from the main portion of the bill, language in the bill supports future applications and most certainly, the subject will be visited again. However, the Class Act is a public option provision. At this point, the Class Act is a voluntary federal insurance program that will help pay the costs of long term care in direct competition with existing insurance companies offering long-term care insurance.  This program is not affiliated with the federal employee long-term care insurance, which is for federal employees, the military and their families.

As with all long-term care insurance policies, there are certain eligibility requirements to the plan.  One must have paid premiums into the plan for 5 years before becoming eligible to receive any benefits. Another is that recipients would need help with at least 2 of the listed activities; meaning they were unable to accomplish the normal activities on their own, such as dressing or bathing similar to those set by insurance companies and Medicaid.

Specific dollar amounts for the monthly premiums are as yet undetermined and will be dependent upon the age and some health factors of the recipient. Pay-outs, for Americans who sign up and have met all of the requirements, are still in the process of being worked out, but the amount will most likely be a modest amount, perhaps around $75 a day, which is only about ½ of the actual cost of a nursing home care.  As the bill reads right now, the recipient will get that amount in cash to help pay for the necessary care or treatment.

Opponents of the Class Act are quick to point out flaws in the provision. Like so many other well intended government programs, funding language is vague. The Congressional Budget Office (CBO) only considered the fiscal impact of this program for the first 10 years. During the first five years of this program, there will be no payouts, which will skew the total overall impact once the program is fully activated. So the total cost of the Class Act provision within the HealthCare Bill is under reported by a very large margin. Another aspect of the cost of this provision is the fact that this program is more likely to be used by those with greater health problems, which means it poses a higher risk of failure, since the risk for insurance is lessened by the ratio of healthy people to unhealthy in any risk pool. The long-term effect of this will be dramatically increased premiums down the road.

Proponents of the Class Act highlight the desperate need of Americans who require assistance. In fact, some would like to see the class act as mandatory for all Americans. The goal of this provision is to lower the role of Medicaid. Medicare helps offset the initial cost of short term nursing care, but does not cover the cost of long-term care. So when Americans are faced with the need for long-term nursing care without private insurance, they many times have to rely on Medicaid, which will force them to use every available resource at their disposal before Medicaid benefits will be considered. Which means Medicaid will only kick in only after personal assets are depleted, which could leave a remaining spouse destitute. Medicaid spends one third of its entire budget on paying for long-term care for seniors, over $100 billion a year.

The most import in detail left out all the Class Act provision is the protection of the premium payments. Some have reported that the funding for this provision is a pure Ponzi scheme because the premium payments collected are not put into a trust fund where they are protected for payment of future benefits. Instead, these premiums will go into a general health care fund where they may be allocated to pay for other health care initiatives, leaving the Class Act unaffordable and unfunded. Authors of the provision did include language in the bill, stating that the revenue collected should be dedicated to the Class Act program, but does not restrict Congress from spending it on other health care programs.

More information on long-term care please visit:

Medicaid and Long Term Care

National Planning Center

Assisted Living Directory

Comments 15 comments

TinaMarieTad profile image

TinaMarieTad 6 years ago from Michigan

Joni..what a great article on Long Term Care..Good information and resources.

Joni Douglas profile image

Joni Douglas 6 years ago Author

Thank you Tina, glad you stopped by.

Joy56 profile image

Joy56 6 years ago

yep, we should all be thinking of this, even though maybe we dont want to. I work in a nursing home, and people fare much better, when they have planned things out, very well written, thankyou

Joni Douglas profile image

Joni Douglas 6 years ago Author

Thank you Joy. Planning is so very important. What scares me about this is the protection of the premiums. Just as they did with Social Security, the money will get used for other things and eventually, we will hear that the program is broke. Thanks for your comments.

profile image

HSchneider 6 years ago from Parsippany, New Jersey

Hi Joni. Thanks for your kind fan mail. I look forward to following you also and reading your thoughtful hubs such as this one. Long term care for parents is an issue that I am dealing with right now. Luckily my mother had the foresight to purchase insurance for this possibility for the future. This will make my life easier if she needs long term nursing care. She is 81 and still doing relatively well but I agree that many people neglect this issue and are not prepared for it when it arises. Hopefully this provision in the plan will help and be protected.

Joni Douglas profile image

Joni Douglas 6 years ago Author

Thank you for commenting HSchneider. Your mother is a smart woman. People do neglect this issue. Many think that Medicare is enough. Being prepared is the key.

RTalloni profile image

RTalloni 6 years ago from the short journey

Examining a medicaid nursing home can give quite a bit of motivation to buy long term care insurance.

Joni Douglas profile image

Joni Douglas 6 years ago Author

It sure can RTalloni. I helped my grandmother move out of her own room and into the medicaid room when her money was all gone. A sad day. Thank you for your comments.

JON EWALL profile image

JON EWALL 6 years ago from usa

Joni Douglas

A terrific hub expose


‘’into the bill where it did not need a full majority to pass. This addition to the bill is one of the most under-reported aspects of the health care bill.’’

The American people must wake up to the corruption of the Barak Obama and Democrat lead Congress. I recently wrote.

On a recent cable news channel the guest and the moderator were discussing the contents of the Healthcare Reform bill. The guest revealed that a CBO report to members of Congress advised the members, prior to the vote, that insurance premiums would rise 10% to 13% if the bill was passed.

President Barak Obama continues to tell the American people that the Healthcare Bill will not increase insurance premiums. SIMPLY NOT TRUE

Congressman supposedly, they claim, were not told that the bill would raise premiums by the leadership. Speaker Pelosi said ‘’ we must pass the bill to find out what’s in the bill’’. Maybe they should have read the bill before they voted to pass the bill.

Mr. President ,’’you lie ‘’ as you have in the past. Congressman Joe Wilson was correct when he shouted out to the president ‘’ you lie’’.

A judge in Florida today 9/14/10 ruled that the suit by 19 states attorney generals that the Healthcare Bill is unconstitutional will be heard. The government request to dismiss the suit was rejected by the judge.

One must just wonder why the mainstream media and press did nor report the contents of the CBO report.

Joni Douglas profile image

Joni Douglas 6 years ago Author

Exactly Jon, we should all question why. By not reporting opinions that differ from their owns views the media only tells half a story which means that they are not telling us the entire truth. I sure appreciate your comments.

JON EWALL profile image

JON EWALL 6 years ago from usa

Joni Douglas

WE THE PEOPLE need to wake up to what is going on in Washington. Recently it was reported that $820,000 of the Stimulus Money was sent to Africa to show men having sex on how to clean up after the act. Anger and trying to figure out who approved the money.

Barak Obama said that Recovery.gov will show where the Stimulus money is going. Some months ago the news media exposed that money was going to districts that don’t exist. Fraud and waste of taxpayer money, you betcha.

Joni Douglas profile image

Joni Douglas 6 years ago Author

So it is 'change as usual' for this admin.

We really need to wise up...Remember in November!

JON EWALL profile image

JON EWALL 6 years ago from usa

Joni Douglas


$111 MILLION to California for shovel ready jobs. Only $65 million has been spent = 56 jobs

Who would be held responsible for committing money to whoever, by the way the jobs were public sector city jobs.

Joni Douglas profile image

Joni Douglas 6 years ago Author

I saw that on the news Jon. Unbelievable!!

The private sector would never get in that position because it isn't cost effective. It is stupid! Only government pulls stuff like that. The private sector has to watch its bottom line....apparently government doesn't have to.

JON EWALL profile image

JON EWALL 6 years ago from usa

Joni Douglas

Sept.19/2010 in the Arizona Republic reported ‘’largest energy grants awarded in Arizona including how much money has been spent so far. Remembered Obama stated that the money would jump start the economy ‘ shovel ready jobs’’ for highways , bridges , roads and other ready to go products.

spent to date

Electric-car charging units $100.1 million grant $4.6 million spent

Weatherization assistance $ 60.1million ‘$16 million spent

Smart-grid investment $ 56.9 million $ 10 million spent

State energy program $ 55.4 million $ 4.4 million spent

Smart-grid investment 2 $32.2 million ‘$ 1.9 million spent Grants mean money that need not be paid back (to taxpayers ). The government is very generous with someone else’s money. The money is borrowed and we the taxpayers are paying interest on the debt at $1 billion a day. There is something wrong when small amounts have been spent , we don’t know how many jobs were created. So why does unemployment remain at 9.7%.Should we believe that government spending more, increasing the deficit will get people back to work as promised by Obama and the majority Democratic controlled Congress.

Past President Clinton recently said that the American people should give the Democrats another 2 years to correct the problems of the past administration. The Democrats have been in control since 2007 to the present. Obama and the Dems already will have 4 years in command. Polls showed that the majority of taxpayers do not favor legislation that has been passed by the Obama administration and Congress.

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