Health Reform: Long Term Care Insurance
Long Term Care Health Insurance
One thing that really surprises me, with all of the talk and debate about heath reform, is that there has been little discussion about new long term care insurance plans. Planning for nursing care should be considered by anybody who is doing retirement planning these days, and I think that a lot of people do not consider it because they just do not know how much it costs or figure some government plan already exists to take care of that concern.
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Since long term care health insurance is a type of heath insurance, it has been included in the new health reform bill. However, what has been included is NOT comprehensive, and it will not remove the need to plan.
The details are not totally firm yet, but you can search for the CLASS act. It proposes a voluntary long term care insurance program that workers can opt out of. It has been devised to be self supporting, so it will not rely on any federal tax money.
What We Know About The CLASS Act
If the enrolled people pay the premiums, which are scheduled to be adjusted for lower income people, and they are in the program for a waiting period (5 years), it will pay $50 a day for nursing care. This care could be from a nursing home, assisted living facility, or at home health care.
As this plan has not yet been implemented, and as it also will require a waiting period, it will not provide any immediate relief for people who need nursing care. Also note that the plan is not just for senior citizens who are of Medicare age. Disabled people of any age who meet the other qualifications could use the plan benefits.
Do We Need To Worry About Long Term Care Insurance?
This will not totally remove your concerns. Even today, nursing homes can cost over $100 a day or more. So the new plan may pay half to a third of the total price tag. It should help remove some concerns, but it is not a total solution.
Many people assume that some federal program is already in place to take care of the rest. Understand that Medicare, the federal health insurance for disabled people and seniors, only covers SHORT TERM CARE. Medicaid, the US health insurance for low income people, forces people to spend down most of their assets to qualify. So there are some governement programs, but they are hardly perfect either.
Nursing Care Solutions
One common solution is long term care insurance (LTCi). There are even tax qualified plans that can be used as a tax deduction today. There are also LTCi alternatives like savings or annuities and life insurance with nursing care riders. The important thing is to learn about your options, and try to choose one that will provide security for you in the future and work with your budget today!
For more information, you might find this interesting: Pros and Cons of Long Term Care Insurance
Otherwise, we welcome any discussion in the comments!
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