The color of money

Michelle Singletary: Our looming crisis in long-term care

 

Washington Post Service

I suspect many people didn’t know that the Affordable Care Act, or Obamacare, was supposed to include much-needed coverage for long-term care.

The enacting legislation was called, ironically, the Community Living Assistance Services and Supports (CLASS) Act. But what happened to an initiative that was meant to address a huge financial burden for families as the population ages isn’t classy at all. It’s sad.

The CLASS Act envisioned an insurance program administered by the federal government that would cover long-term care. Medicaid is now the only federal program that extensively deals with these services. But to qualify for the benefit, you have to be pretty poor. Medicare, except in very limited situations, does not cover long-term care, which includes assistance with daily activities, such as eating, dressing, and bathing, or help with someone who has a severe cognitive impairment, such as Alzheimer’s disease.

Under the CLASS Act, premiums would have been paid through payroll deductions by employees who decided to participate in the program, so participants, not the taxpayers, would have covered the cost. If you were self-employed or your employer chose not to participate, you could have participated through a government-sponsored payment mechanism.

The program promised to provide lifetime cash benefits of at least $50 a day to people with disabilities to help with the costs of long-term services and support.

I’m speaking in the past tense because there is no more CLASS Act. The Obama administration abandoned the idea because there was great concern that the voluntary nature wouldn’t make the program actuarially sound. There was fear that the people who needed the insurance the most would pay but that others who didn’t would opt out. Premiums in turn would be too high. If the insurance program became financially unstable, there would have been great pressure for the federal government to bail it out.

So what was put in its place?

A commission.

Specifically, the Commission on Long-Term Care, which didn’t have long to grapple with this issue — from June until this month. It was charged with developing “a plan for the establishment, implementation, and financing of a comprehensive, coordinated, and high-quality system” that would provide long-term services.

The commission recently issued its report and recommendations on the looming long-term-care crisis. The commissioners, at least those who voted to deliver the report to Congress, concluded that the long-term services and support system as it currently operates in this country “is not sufficient for current or future needs.”

I’ll give them this. The report lays out the problem well. Basically, individuals in need of services often don’t have enough money to pay for long-term care. They mostly rely on family and friends, who often are also at their financial wits’ end. Caregivers are overburdened and underpaid. If we don’t figure out how to address this issue, the situation will get worse.

“With little time and in today’s politically charged environment, it was unlikely the commission would achieve anything more,” said Jesse Slome, executive director of the American Association for Long-Term Care Insurance. “Those anticipating significant changes or a recommendation for a new taxpayer-supported social insurance program to address long-term care may be disappointed.”

And many people were disappointed. The report was passed by a 9-6 vote. Five commissioners were so dissatisfied with what was put forth that they issued a separate statement about why they didn’t vote to support the report. Judy Feder, who served on the commission and is an Urban Institute fellow and professor at the Georgetown Public Policy Institute, is not happy.

People can’t plan for an unpredictable catastrophic need such as long-term care unless they have an insurance mechanism, Feder said. The five commissioners issued their own recommendations calling for a public social-insurance program.

“What we need is a public-insurance core that can be supplemented with private insurance and family care,” Feder said. “The question is, are we going to meet the needs of a growing population, or are we going to leave them hanging?”

If all goes as planned, the Affordable Care Act is expected to usher in huge changes to the nation’s healthcare system. Part of the reform should have — and still needs to include — a solution to deal with the looming long-term-care crisis.

Hear Michelle Singletary’s personal-finance reports on www.npr.org. Readers may write to her c/o The Washington Post, 1150 15th St., NW, Washington DC 20081.

Read more Personal Finance stories from the Miami Herald

  • The Home Economist

    Millenial disconnect: Kids want money but not hard work

    The up-and-coming generation wants material rewards but isn’t always willing to work hard to earn them, say Millennials themselves.

  • The Home Economist

    Power leads to savings — and it’s all how you feel

    According to econmic studies, a sense of control over your life can lead to greater savings. Building that feeling comes with practice.

  • South Florida grocery cart

    The chart shown here reflects the average of prices at six South Florida groceries on June 8. Prices changed relatively little since April. Since The Miami Herald began tracking grocery prices in February, prices on most items have crept up slightly. The biggest increases were on bacon, which rose about 30 percent, and Roma tomatoes, which rose about 25 percent. Item May June One month change Loaf white bread, store-brand, 20 oz. $1.22 $1.36 $0.14 Cheddar cheese, store brand, 16 oz. $4.60 $5.30 $0.70 Dozen eggs, large, grade A $1.70 $1.65 -$0.05 Ground chuck, per pound $3.40 $3.67 $0.27 Bacon, store brand, 16-oz. package $4.96 $4.62 -$0.34 Gallon of whole milk, store brand, gallon $3.37 $3.51 $0.14 Tomatoes, Roma, 16 oz. $2.36 $1.94 $0.42 Green bell peppers, 16oz. $1.77 $1.70 -$0.07 Orange juice, store brand, half-gallon $2.95 $2.86 -$0.09 Stores surveyed: Milam’s in Miami Springs, Wal-Mart in Hialeah, Aldi in Deerfield Beach, Super Target in Davie, Publix in Fort Lauderdale and Winn-Dixie in Fort Lauderdale

Miami Herald

Join the
Discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Marketplace

Today's Circulars

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category