Act 2 Column: New law helps pay for long-term care

For much of this year, the debate over health-care reform dominated the news - until, of course, it was overtaken by the BP oil rig explosion. But there is one piece of the landmark law that made few headlines, yet deserves much more attention.

It's called the Community Living Assistance Services and Supports Act - Class Act, for short - which establishes the nation's first public long-term care insurance program.

One of the last legislative efforts of the late Sen. Edward Kennedy (D-Mass.), the Class Act is a voluntary program that will enable workers to deduct premiums from their paychecks to eventually pay the costs of long-term care. Generally, long-term care provides assistance to people who are no longer capable of independently doing certain "activities of daily living," or ADLs, such as bathing, eating and dressing.

The Class Act has its supporters and detractors. Advocates, such as the National Council on Aging, say the act will help provide relief for many struggling to pay for the long-term health care they may need someday. Critics, including the American Academy of Actuaries, question whether enough people will sign up for the program to assure that it can pay for itself - without taxpayer support -- as required by the law.

Compounding the debate is the lack of information about some key components of the program, such as the monthly premiums. While the law takes effect on Jan. 1, 2011, the Secretary of Health and Human Services is not required to release details of the long-term care plan until Oct. 1, 2012, so it's likely people won't be signing up until late 2012 or 2013.

Even if that seems a long way off, we should start thinking about how we're going to get long-term care coverage because we're going to need it at some point - and we have no idea how we're going to pay for it.

"It's a dire problem," says Dennis L. Kodner, director of the New York Institute of Technology's Center for Gerontology and Geriatrics in Old Westbury. Many think their long-term needs will be met by Medicare or Medicaid, but in reality, he says, "They don't even know what's covered and what's not covered."

Only about 7 percent of older adults have bought private long-term care insurance, partly because the premiums can be high, but also because, as a society, we're in denial.

So to jump-start your family's discussion of long-term care needs, here are some basics about how the Class Act program is expected to work:

Who's eligible? Anyone 18 or older who is "actively at work" can opt into the program by paying premiums through an automatic payroll deduction. People with preexisting conditions cannot be excluded.

Why enroll? The plan will pay a cash benefit of no less than $50 a day, on average, that will increase annually with inflation. The sliding benefit scale will be pegged to an assessment of a person's need for help due to a physical or cognitive limitation.

There is a five-year vesting period, and participants must be actively at work for three of those years before receiving benefits. There is no lifetime limit on the benefits, but it's clear the amounts are not intended to cover the full cost of care.

How much are the premiums? That hasn't been decided yet. Generally, the cost will work on a sliding scale based on age, with younger people paying lower costs.

Additional details are spelled out by the law, but many unanswered questions remain. Even when the final regulations are issued, the Class Act will provide "a very modest attempt to cover long-term care costs," Kodner says. "It's geared to a younger, employed population, who, by definition, are not thinking about long-term care." Still, he adds, "It's important that we've made even this small step."

* * *

Even without the new Care Act, navigating the long-term care insurance landscape can be daunting. Here are some websites with more information:

The National Clearinghouse for Long-Term Care Information, www.longtermcare .gov/ltc

Administration on Aging, www.aoa.gov.

New York State Partnership, nyspltc.org.