The Community Living Assistance Services and Supports (CLASS) Act is part of the Health Care Reform Law that was passed in March. Taxpayers can choose to pay into the program, and after contributing for five years, participants who are disabled and meet certain criteria will be eligible for a cash benefit of at least $50 a day. The program is geared toward helping people stay in their homes when they need assistance for activities of daily living and supplementing help they receive from family members.  The program would act like long term care insurance, but on a smaller budget. A big difference from long term care insurance is that there will be no screening for preexisting conditions when people sign up for CLASS and no lifetime benefit limit for participants.

Kaiser Health News has a story on the program  which you can read here:

http://www.kaiserhealthnews.org/Stories/2010/April/15/CLASS-act-long-term-care-insurance.aspx

I just heard that  an Arizona resident who purchases a qualified long-term care policy can now get protection for assets equal to the amount of the long term care policy. This policy took effect January 1, but I don’t recall seeing any press releases about this program which should make long-term care insurance a more attractive idea for baby boomers.

The Long-Term Care Insurance Partnership Program is designed to encourage people with moderate incomes to purchase private insurance rather than relying on Medicaid when they need long term care.   Buying a $100,000 policy is a lot less expensive than the premium for a $200,000 policy.

For example, a consumer who buys a policy with a benefit of $100,000 would be entitled to up to $100,000 worth of nursing home or community-based long-term care. If further care became necessary, the individual would be able to apply for Medicaid coverage, while still retaining $100,000 worth of assets.

All long-term care insurance (LTCI) policies that qualify for the Partnership Program must have inflation protection built into them.  So, the $100,000 policy bought today might become a $200,000 policy by the time it is used, depending on inflation and the number of years premiums are paid.

Many LTCI policies allow you to get benefits for in-home care, assisted living care, or nursing home care. So you can use the policy in the fashion that fits your particular situation when you need care.   A person uses the policy when they need help for several “activities of daily living” (ADLs) such as eating, bathing, dressing, toileting, transferring (walking).

FYI:  Medicare pays for stays in a “skilled nursing facility”.  Medicare does not pay for convalescent care or long-term care. So if you have a severe stroke, you might spend some time in a skilled nursing facility but then be transferred to long-term care – and Medicare will not pay for this care. Medicare will pay for intermittent skilled care in your home, but it does not cover services such as cooking, bathing, and cleaning.  This is long-term care.

 Here is some more information I found on-line:

 Nearly half of all Americans who turn 65 during any given year will eventually enter a nursing home as a result of being unable to perform ADLs. While the majority of those nursing home admissions will be for a short term (less than a year), about a quarter will stay longer than a year.

The purchase of a Partnership Policy does not automatically qualify you for Medicaid.  Medicaid has other eligibility criteria that may disqualify you. In addition, the Asset Disregard rules may not apply to you if your home equity exceeds $500,000.

Asset Disregard is only available under a Partnership Policy and not every long term care policy is a Partnership Policy.

Most (but not all) states will recognize your LTCI Partnership Policy if you move out of Arizona. So you can get the same Medicaid asset protection if you move somewhere else.