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Health Care Reform: The Cost of CLASS
Certainly the Affordable Care Act, the legislation passed in March of 2010 that aims to reduce health care costs and increase coverage, is controversial. While the war of the words rages on in the political arena, the clash of the costs is also taking front and center stage.
Specifically, the CLASS program, which stands for Community Living Assistance Services and Support, designed to offer long term care insurance policies to working individuals. CLASS is said to be a government bailout waiting to happen. But what are the projected numbers of this program?
Costs of CLASS to the Country
Today's long term care needs are being handled by federally-funded, state-run Medicaid programs. Medicaid is a need-based benefit, and it's covering nearly 50% of long-term care, which is not what it's designed to do. In fact, the cost of Medicaid programs and their administration is busting state budgets across the country.
Obviously, a solution is needed, and the CLASS program is stepping up to the plate to fix some of these flaws. The program is mandated to maintain a 75 year program solvency. The problem is; those below the poverty line and full-time students only pay nominal premiums, leaving someone to pick up the costs.
The Congressional Budget Office estimates that the CLASS Program's net effect on the federal budget would be a reduction of approximately $74 billion during the upcoming decade, primarily due to the cuts in costs to Medicaid programs. Opponents claim that there's no way to maintain solvency without bailout potential since CLASS administrators are forbidden from basing individual premiums on any health-risk factors other than age.
Costs and Benefits to Policyholders
Under the CLASS Program, policyholders must be enrolled in the program for five years to be fully 'vested.' While the federal government continues to crunch the numbers on the specific costs of CLASS policies, initial estimates have the average monthly premium estimated at $123, with a daily benefit projected to average $75.
While these estimates and projections make the program sound like a win-win situations for both the government and policyholders, we will be watching for more specifics on the numbers from the Secretary of Health and Human Services.
* You may be able to get extra help to pay for your prescription drug premiums and costs. To see if you qualify for getting extra help, call:
1-800-MEDICARE (1-800-633-4227). TTY/TDD users should call 1-877-486-2048, 24 hours a day/7 days a week;
The Social Security Administration at 1-800-772-1213 between 7 a.m. and 7 p.m., Monday through Friday. TTY/TDD users should call, 1-800-325-0778; or Your State Medicaid Office
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