Bye-Bye Class Act

What is long term care insurance?

Very few Americans realize that for a short period of time they were going to be eligible for government run long term care insurance but that ended on October 20. Long term care insurance is a type of coverage that provides skilled nursing, intermediate care, or custodial care for a patient (generally over age 65) in a nursing facility or the insured’s personal residence following an illness or injury.

Problems with the Class Act

Private long term care insurance has become a popular way of financing long term care cost for millions of Americans. With the Class Act, working Americans could have bought into government run long term care insurance that would have paid up to about $75 per day to eligible participants for in-home health care, assisted living facilities, nursing homes, or other out of pocket costs for seniors.

But there were major problems: First, sometime in 2013 all working Americans over 18 would have woken up to yet another automatic payroll deduction. And, second, the Class Act would have created an additional government program that would not be financially viable over the long-run.

I know that there are some groups who are disappointed that the administration gave up on the Class Act. And there are other groups who feel like pulling the plug on it was an act of common sense. But in the end, one of the largest expansions for senior care since Medicare Part D came and went without a whimper.