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With CLASS dead, making sense of long-term care for your audience

Eldery care

The Obama administration's has dropped the provision of long-term care from health-care reform. Photo by Flickr user Daoro.

The recent decision by the Obama administration to abandon the long-term-care provision in health-care reform puts a renewed spotlight on the problem of how to pay for the vastly expensive assisted-living or nursing-home care that many older Americans will require.

It’s a highly emotional issue, with heart-rending stories of its impact on both caregivers and the elderly. This Washington Post article, “White House kills insurance program for long-term care,” explains the administration’s inability to find a plan that would result in affordable premiums; it garnered more than 2,200 reader comments. And earlier this year, the Pew Internet and American Life Project reported that one in five caregivers has searched for long-term-care information, as have 12 percent of overall Internet users.

The Community Living Assistance Services and Supports (CLASS) Act was included in health-care reform on the premise that Americans could voluntarily pay premiums toward insurance that would pay out if certain types of elder care were needed.  This TIME article, “The Tragic Bungling of a ‘Class’ Act,” is a good background explainer on the CLASS Act’s fate and also contains some eye-opening statistics such as these:

“Long-term care is a ticking time bomb. The Center for Retirement Research at Boston College estimates that a typical 65-year-old couple can expect to pay $197,000 in lifetime health-related costs, including health policy premiums, co-payments for hospital visits and drugs and home-based care. If you add in nursing care, expenses for a typical couple balloon to $260,000 with an upside risk of paying as much as $570,000. Few retirees have such resources. That leaves Medicaid to fill in the gaps, and it simply cannot.”

nursing home

This photo in a nursing home was taken by Flickr user robinsan.

Clearly this issue is ripe for a personal finance or consumer piece updating the costs of nursing-home or assisted-living care, when it’s covered by Medicaid (after assets are spent down to near-nothing) and how a typical nursing-home stay is paid for. I would turn to a couple of Certified Financial Planner professionals (find them using a ZIP-code search at www.cfp.net), along with perhaps a consumer advocate from your state’s public health department and from the insurance regulator’s office to determine what policies are available in your region and how much they cost. You could readily produce a big graphic showing the premiums for various levels of coverage.  The age at which one starts buying LTC insurance, as it’s known, is also a factor in cost.

This Genworth Financial long-term-care costs survey site is pretty interesting. I has a really user-friendly interactive map and all sorts of other bells and whistles.  Of course, I always perform due diligence when a survey is conducted by a product purveyor, but the site is a very helpful starting point.

And this little gold mine of information is a must-see for your story:  The Kaiser Family Foundation’s StateHealthFacts.org offers an interactive tool that lets you calculate just how much of your state’s Medicaid budget is spent on long-term care, and compare it to the national average. There are all sorts of other interesting facts and figures on that site, as well.

The Center for Retirement Research cited above has many briefs about long-term care.  Also take a look at Pew Trusts’ “Retirement Saving and Long-Term Care Needs: An Overview” (a bit dated from 2004, but great background information).

Here’s my earlier post on nursing-home ratings and other resources. You might also look to the American Health Care Association and its affiliates and state chapters for the voice of the long-term-care industry.

About the Author

Veteran financial writer Melissa Preddy served as a business writer, editor and columnist for The Detroit News from 1995 to 2008, is a Michigan-based freelance journalist. She now works as a writer and editor for a medical research unit of the University of Michigan Medical School. Follow her daily posts. | E-mail: Melissa Preddy

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