Last Friday, the Department of Health and Human Services announced that it does not plan to implement the Community Living Assistance Services and Support (CLASS) Act at the present time. The CLASS Act was intended to act as a federal insurance program for long-term care, particularly in nursing facilities. The enacting legislation requires HHS to determine that the program will be self-sustaining (that is, it will pay for itself) before going into effect. Because HHS was not convinced that voluntary premium payments would keep pace with costs of the program, HHS announced that it would not begin implementation. CLASS Act is currently still on the books but has been left in limbo.
What does this mean for individuals who anticipate needing long-term care? There are four primary options: First, individuals can “self-insure” by planning to pay any nursing home costs out of their income and assets. Because of the high costs nursing home care — more than $70,000 per year — and the high risk of needing care, many people are not thrilled by this option.
Second, for individuals who are still relatively healthy, and particularly those around age 55, long-term care insurance may be an option. While the insurance tends to be somewhat expensive, a person looking at long-term care insurance should keep in mind the potential risk being insured against ($70,000 per year in long-term care costs). Also, while 100% insurance may be too expensive, a person can get insurance that covers only a portion of long-term care costs to reduce the premiums. Long-term care policies may also cover care at home in addition to nursing home care.
Third, for individuals not expecting to need nursing home care for at least five years, Medicaid planning may permit protection of some assets from long-term care costs.
Fourth, individuals needing nursing home care now or in the near future may be able to preserve substantial assets through emergency Medicaid planning.
If you have questions about your options for paying for long-term care, talk with an experienced elder law attorney.