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Obama Supports New Long-Term Care Benefit
By Ricardo Alfonso Zaldivar, Associated Press
July 6, 2009
Moving to broaden the scope of the health care overhaul, President Barack Obama threw his support Tuesday behind the creation of a program to help families struggling with long-term care costs.
The voluntary insurance program — sponsored by Sen. Edward M. Kennedy, D-Mass. — would pay a modest daily cash benefit of at least $50 that people could use for a range of in-home services or nursing home expenses.
Kennedy's own Senate health committee will include the long-term care provisions in its version of health care legislation. But other lawmakers could prove a tough audience. The Congressional Budget Office is already warning that premiums won't be enough to cover benefit costs after the program has been in operation for a few years.
Obama's support could convince skeptical lawmakers to take a second look at Kennedy's idea, known as the Community Living Assistance Services and Supports Act, or CLASS Act, for short.
In a letter to Kennedy released Tuesday, Health and Human Services Secretary Kathleen Sebelius said that Obama believes the long-term care program is an "innovative" idea that should be "part of health reform."
"Enactment of this important legislation would expand resources available to individuals and families to purchase long-term services and supports to enable them to remain in their own homes in the community," Sebelius wrote.
Supporters say the insurance program could help ease some of the pressure on Medicaid by helping elderly and disabled people stay in their homes. Medicaid pays most of the nation's nursing home bills.
"You can't really reform health care without addressing long-term care," said Larry Minnix, CEO of the American Association of Homes and Services for the Aging, which represents nonprofit care providers.
As Kennedy envisions it, workers and their spouses would be able to enroll in the insurance program for a monthly premium of $65. For middle-aged people, that's well below the cost of private long-term care insurance. People would have to pay premiums for at least five years before they could claim benefits, and they would have had to be working at least three of those years.
Beneficiaries would qualify for assistance if become disabled and unable to perform at least two or three basic activities such as bathing or dressing.
Because of the five-year vesting period for benefits, congressional budget analysts estimate the program would run a fat surplus in its first 10 years. Soon after that, it would get swamped by claims. To keep the program financially solvent through 2050, the government would have to raise premiums significantly, to $85 a month, and keep benefits at the $50 daily minimum, the budget office said. And even with those measures, the program might still increase the deficit.
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