Health care reform should help people with disabilities stay in their homes

From The Kansas City Star:

The young mother who becomes paraplegic after a wreck. The soldier who returns home with a severe head injury. The middle-aged woman with early dementia.

They, like millions of Americans, need long-term health care.

But few can afford it.

That’s where a little-discussed part of the massive Patient Protection and Affordable Care Act, the national health care reform package, comes into the picture.

Buried in the law is Title VIII, the Community Living Assistance Services and Supports Act, or CLASS, one of the earliest programs scheduled to go into effect — on Jan. 1, 2011.

CLASS is designed to give workers a consumer-financed national insurance pool to help pay for long-term care, either in their homes or in care centers, when they’re disabled enough by age, disease or injury to need it.

“It’s a game changer,” said Larry Minnix, president of the American Association of Homes and Services for the Aging, who advocated for the concept for years.

Mountains of implementation details are yet to be delivered by the U.S. Department of Health and Human Services. And benefits won’t begin to flow for at least six years.

CLASS is envisioned as a supplement to Medicaid or private savings. If it works, people who pay premiums into a long-term care insurance fund could get $50 or more a day for such care.

Preliminary estimates for the premiums range from $50 to $120 a month (although subsidized premium rates are available for students and low-income workers set by law at $5).

With the average cost of a nursing home in the United States running about $200 a day, many patients are forced to exhaust their savings and spend down their assets to become eligible for Medicaid coverage.

Health care experts point out that many disabled people would prefer to remain in their homes and receive services there.

The average hourly cost of a home health aide visit in Kansas City is about $20, and a few hours a day might help people avoid an institution, but Medicaid doesn’t pay for this.

“The essence of the bill, from a consumer standpoint, is that a cash benefit would follow the person and not the institution,” said Rodney McBride, who follows the issue at John Knox Village, the elder-care service and residential center in Lee’s Summit.

“That’s a significant change from today. CLASS will allow individuals to use funds to receive the type of services they need at the location they need it — in their homes or institutions,” McBride said.

The success of CLASS depends on how much the premiums will cost and on how many and who invests in the insurance fund.

That success is not a given.

Employees at John Knox Village, who know that the cost of long-term care often outstrips the ability to pay for it, have for several years been offered long-term care insurance as an option in their employee benefits package.

Only 30 out of 700 eligible workers chose to participate.

Is it too expensive compared with what they earn? Is it simply not a priority at this time? Or do they gamble they won’t ever need long-term care?

Whatever their reasons, they — like workers nationally — rarely choose to buy private-market long-term care insurance. And that’s a concern underlying CLASS.

To eventually receive CLASS benefits, people who choose to pay premiums have to be working — not idled by disabilities — and they have to buy into the system for at least five years.

Premium costs ultimately will depend on how many working people enroll and the demographics of those who participate. Older people will have higher premiums.

And, similar to any insurance pool, the program needs healthy people who won’t quickly draw benefits, not just older workers or people with health problems who are beginning to think about long-term care expenses.

“In theory, CLASS will make a big difference in people’s ability to remain in their homes and receive care if they become disabled enough to qualify for the benefits,” said Jay Kirschbaum, a practice leader at Willis Human Capital Practice in St. Louis.

“The problems of long-term care insurance to date is that insurance companies haven’t been able to price the product to get much participation,” Kirschbaum said. “So the penetration isn’t high at all. People found it was too expensive and didn’t buy it.”

Minnix, the elder care expert, emphasized that CLASS would operate like any insurance product: Those who purchase the insurance will weigh the investment against their odds of needing to draw benefits.

“CLASS has the potential to help folks who are planners,” McBride said. “The cost may still be a barrier. We don’t yet know the end effect.”

Analysts worry that it will be hard to get 20- and 30-something employees to worry much about long-term care. People who are buying homes, building families and starting out in their jobs are less likely to have the disposable income or the inclination to add another insurance deduction to their paychecks.

The law requires CLASS to be self-funding, and it must ensure its solvency for 75 years. The secretary of Health and Human Services will have to certify every 20 years that the program is solvent or adjust premium costs to make it so.

Authorities can only guess how many workers will sign up, Minnix said. But he hopes there’s a strong educational push to encourage it.

The law designs CLASS to be workplace based, but it allows employers to choose whether to offer participation as an employee benefit.

John Utz, a Kansas City lawyer who deals in health reform law at Utz, Miller & Eickman, said he doubted that employers would jump to get involved.

“That would be just another task laid at the feet of employee benefits and payroll departments that may already feel overburdened,” Utz said.

But Tom O’Donnell, a health care attorney at Polsinelli Shughart, said employers would see that adding a deductible line on the paycheck wasn’t a big deal and that long-term benefits to the work force would be realized.

If employers choose to offer the benefit, the law requires that all full-time workers be automatically enrolled unless they choose to opt out.

Federal regulations will detail how others, such as the self-employed or employees at companies where the benefit isn’t offered, can choose to participate.

Once a worker signs up for CLASS premiums, the cost stays the same as long as participation is continuous. If someone stops working or elects to stop participating, premiums are likely to be higher upon re-entry.

In addition to awaiting all the details that will make CLASS happen, authorities await public reaction to the plan.

“The suspicions surrounding health reform generally are that this is socialism,” said Minnix, who said much employer and public education would be necessary.

“CLASS is actually one of the most American, red-state things you can do. It’s a choice. It’s your money. It’s your decision. But most important, it may help you stay at home if you qualify for coverage — and that will cost you a lot less than a nursing home. Furthermore, there’s no lifetime cap like there is with private insurance.”