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May 19th, 2010

How health care reform affects seniors



Sandy Altman, Esq.

Politics and partisan rhetoric aside, there are several key provisions of Health Care Reform which apply to seniors, most of which are positive, some very significantly so.

The first of such provisions is the Community Living Assistance Services and Supports Program (the CLASS Act) which I wrote about in my column about three months ago. Since then, we had the election in Massachusetts, which for a while had many declaring the entire bill to be doomed, but, both the bill and the CLASS Act survived. Why is this so important? This is a practical way for the government to actually help seniors age in place - remaining in their homes rather than moving on to institutional settings such as nursing homes. Geared to those who are still working, it allows you to pay a small premium while at work which, after five years, will make you eligible for payments for long term care when you need it to help defray the cost of such things as care in your own home. In essence, it is government run long term care insurance at an affordable rate.

The second provision of note is aimed at seniors already on Medicare with high yearly prescription bills - the dreaded doughnut hole. Clearly the product of political wrangling and compromise rather than any logical thinking, Medicare currently covers prescription drugs for up to $2,830.00. Then, knowing that those who spend over that amount are probably the most frail, Medicare disappears for the next $3,610.00, which must be paid by the individual. The return of Medicare after spending that amount undoubtedly assumes that so few will have been able to pay the $3,610.00 out-of-pocket to reach that point that, in essence, the government is off the hook.

There are, of course, a few trade offs. One will be an increase in premiums charged to Medicare Part D and Part D recipients by moving them into higher income categories. In addition, government payments to Medicare Advantage plans shall be reduced.

To leave us on a positive note, there are many other provisions which should have a positive impact. Beginning in 2014, insurance companies shall be prohibited from denying coverage based on pre-existing conditions. Finally, an Elder Justice Coordinating Council shall be established to make recommendations to coordinate efforts on federal, state and local governmental levels relating to elder abuse.

While viewed by many as landmark legislation for health care reform, only time will tell. Clearly there are many provisions which will be a great boon to seniors, the uninsured and the population as a whole. How these provisions are implemented may tell the tale. Fortunately, in our system of government, laws are not written in stone, and as time passes, and it becomes apparent that any portion of the law needs adjusting, we can hope that our leaders have the wisdom to make these changes for the benefit of us all.

Sanford R. Altman is an Elder Law Attorney with a firm in Orange, Dutchess and Sullivan Counties, a member attorney of the AARP Legal Services Network, a member of National Academy of Elder Law Attorneys (NAELA), and frequently writes on Elder Law issues for local publications. He may be reached at the following number (845) 778-2121. Please note that while this column is intended to give general legal information, everyone’s circumstances differ. This column is not a substitute for obtaining legal advice directly from an attorney which will address your particular circumstances.

1.5 / 5 (4 Votes)

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Reader Response
  • Scott A. Olson
  • May 20th, 2010 The CLASS Act's $50 per day average benefit will only cover a small portion of the $75,000 per year most Americans pay for in-home care. Most people who want to protect their savings will still need to purchase long-term care insurance.

    One of the biggest problems we face is that most Americans still think that Medicare or their medical insurance covers the cost of long term care.

    The CLASS Act addresses this problem by making a very clear statement: You have to pay for your own long term care. You either have to pay for your own long term care by using your savings, the $50 per day CLASS Act benefit, long term care insurance, or a combination of these.

    Most of the ten million Americans who own long term care insurance, own it because they've seen friends or family have to spend down their assets before qualifying for Medicaid. The CLASS Act will help alert the rest of the country to the fact that they need to financially plan for their future long term care needs.

    There are 2 reasons the projected premiums for the CLASS Act are much higher than a comparable long term care insurance policy.

    1) Anyone who is working (even just part-time) can enroll in the CLASS Act regardless of their health history. Enrollees with severe diabetes or crippling arthritis will pay the same amount for the CLASS Act benefit as those who are in perfect health.

    2) Those who earn less than the federal poverty level will be automatically enrolled in the CLASS Act for only $5 per month (unless they opt-out). Their premiums are being subsidized by the rest of the enrollees.

    Scott A. Olson

    Reader Response
  • Craig Davis
  • May 19th, 2010 I appreciared Sandy's article - but there are some points of potential confusion. For the most part, projected premiums for middle age employees will not be affordable. HHS is caught in a delicate dance between affordable - and sustainable. While actual premiums have not yet been published, detailed information can be found at our web site http://www.ClassActProvisions.com Interestingly, though I found the article on Google, we are located near Millerton, NY - which might be considered the Hudson Valley. Small world. Best regards.
    Craig Davis
    President
    RetirementGuard

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