Color of Money for Sept. 24

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

Ironically, the enacting legislation was called the Community Living Assistance Services and Supports (CLASS) Act. But what happened to an initiative that was meant to address what is certainly going to be 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. 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 others who didn’t would opt out. Premiums in turn would be too high. If the program became financially unstable, there would have been great pressure for the 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 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.

The report was passed by a 9-6 vote. 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. 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?”

The Affordable Care Act is supposed to usher in huge changes to the nation’s health care system. Part of the reform should have included — and still needs to include — a solution for the looming long-term care crisis.

Michelle Singletary welcomes comments and column ideas but cannot offer specific financial advice. Write to her c/o The Washington Post, 1150 15th St. NW, Washington, DC 20071, or email singletarym@washpost.com.

Commenting is limited to Times-Dispatch subscribers. To sign up, click here.
If you’re already a subscriber and need to activate your access or log in, click here.

Load comments

You must be a full digital subscriber to read this article You must be a digital subscriber to view this article.