There are three big disadvantages to the CLASS Act when compared with a traditional long-term care insurance policy.
#1) A small Benefit amount: The healthcare reform bill states that the CLASS Act benefit is to be no less than:
an “average of $50 per day” for each day
that you need personal care services.
The average cost of one day of personal care services is over $150 right now. And the CLASS Act won’t begin to pay benefits until 5 years AFTER the enrollment begins in 2013.
Traditional long-term care insurance allows you to choose a Daily Benefit as low as $50 per day to as much as $500 per day, depending on your preferences and your region.
#2) High premiums: The projected premiums for the CLASS Act are higher than traditional long-term care insurance.
A healthy married couple could get twice the benefits of the CLASS Act for about the same premiums that have been projected by the Congressional Budget Office.
It’s only reasonable that a long-term care policy that you must “health qualify for” would be substantially less expensive than a program that has no health qualifications.
#3) Not “Partnership Qualified”: The CLASS Act program will not qualify its participants for benefits under the Long-Term Care Partnership programs that are now being implemented in over 40 states.
Each dollar that a long-term care insurance partnership policy pays to you in benefits entitles you to keep a dollar of your assets, if you ever need to apply for Medicaid services.
The CLASS Act program does NOT provide this type of asset protection.
You can learn more about the LTC Partnership programs by clicking the following link:
How to Protect Your Assets with a Government-Approved Long-Term Care Partnership Policy
