Our looming long-term-care crisis

Michelle Singletary
Columnist September 21, 2013

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.

Michelle Singletary writes the nationally syndicated personal finance column, “The Color of Money.” View Archive

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. Participation by workers would have been voluntary. 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. The idea was to keep them in their homes and communities, if possible.

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 and supports to elderly individuals, individuals with substantial cognitive or functional limitations and others who need assistance to perform the activities of daily living.

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 health-care system. Part of the reform should have — and still needs to — include a solution to deal with the looming long-term care crisis.

Readers may write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or singletarym@washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to postbusiness.com.

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