Insurance Discussion

Her mother’s policy from Genworth Financial paid $3,000 a month toward costs of a private room that today in the Nashville area averages $5,600 a month. Her mother’s Social Security benefits covered the rest until she died last May.

“When you don’t have to worry about where the payments for the nursing home are coming from, that eases that burden,” said Holder, who works as a high school librarian. Holder is now among the 10 percent of individuals over age 50 who have bought private insurance coverage for long-term care, including nursing home or home health services.

But experts say it’s questionable whether that percentage will rise very much or very quickly now that a health reform bill that could have boosted interest in long-term care enrollment has hit more snags in Congress.

Advocates for seniors and the disabled have been arguing in favor of parts of health reform that would have created a public program to let workers pay for long-term care insurance via payroll deduction at work. Supporters say promoting such a program would make the policies more accessible and affordable for millions more people.

“It’s a step in the right direction,” said Ron Taylor, executive director of the Tennessee Health Care Association, a trade association for nursing homes and assisted-living facilities, which would benefit from wider acceptance of long-term policies.

Critics, however, question the viability of a public program, saying it only would draw patients at higher risk of becoming disabled and would lead to future increases in premiums or reduced benefits to absorb all the costs.

“Even if it passes there’d be no teeth (in the bill) to make employers offer it. And if they offer it, employees can opt out, which in my opinion, many, if not most, will,” said Phyllis Shelton, president of LTC Consultants in Hendersonville, which advises employers on such policies.

Critics cite calculations by the American Academy of Actuaries that suggest only 6 percent of eligible people would sign up for long-term care, and that many others would delay signing up until their need became apparent.

Until recently, many health reform supporters felt Democrats had a good chance of passing a national long-term care insurance program as part of health reform.

But the cause, which has been championed by Sen. Edward M. Kennedy, D-Mass., may come crashing to a halt after the Democratic Party’s loss of Kennedy’s Senate seat to Republican Scott Brown this week.

Kennedy’s measure, dubbed the CLASS Act (short for Community Living Assistance Services and Support), was designed to transform the way everyone pays for long-term care.

Participants would receive daily benefits — money they could use to pay for home care, adult day programs, assisted living or nursing homes — whether they were elderly or young and disabled. Like the Democrats’ overall reform efforts, chances of the CLASS Act passing remain in limbo.

Jeff Goldsmith, a health policy analyst with Health Futures Inc., who supports the CLASS Act, said the measure could face opposition from moderate Democrats growing concerned about its cost.

“It was very much dependent on there being a larger group of reforms taken up at the same time,” Goldsmith said. “It’s really vulnerable taking it up on
its own as a stand-alone item.”

Many delay decision

The debate over the future of long-term care coverage comes as many people have delayed buying such policies because of the weak economy, stock market losses and uncertainty over the final shape of health reform from Washington.

Sales of individual long-term policies fell 28 percent during the first nine months of last year, according to a recent industry survey. Costs of the policies vary
by the age and health status of the buyer and the extent of coverage.

Typical policies run from $600 a year for a 45-year-old to $3,000 a year for someone age 65, analysts say.

Shelton, the industry consultant, said the fastest-growing market segment involves selling policies to people through their workplace. In 2008, 51 percent of long-term care policies were bought at work.

Consumers such as Holder who have had personal experience with aging and health issues within their own families generally show the most interest in long-term care insurance, said Alan Moore, managing partner with Innovative Financial Group in Nashville, a member of the John Hancock Financial Network.

Having insurance meant Holder’s mother was able to go to a nursing home near where her daughter lived and worked, something that wouldn’t have been an option under Medicaid.

Holder, too, wants options and expects her own policy to come in handy in the future.

“I know that health-care costs are only going to escalate, and I don’t want my children to be burdened with my care,” said Holder, who also leads a support group for caregivers.

Tags: CLASS Act, Community Living Assistance Services, health reform bill, long-term care insurance policy, payroll deduction

This entry was posted on Saturday, January 23rd, 2010 at 12:59 am and is filed under Health Insurance, News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.