"Saving for Care in the Future" on WHYY

On Wednesday morning, June 2, 2010, a segment was broadcast on WHYY public radio (90.9 FM) in Philadelphia entitled "Saving for Care in the Future".

The broadcast segment focused upon the needs and costs of long-term care for elderly citizens, and also upon a new federal assessment adopted as a part of the 2010 federal health care law.

The Community Living Assistance Services and Support Act is the federal government's first long-term care insurance program. Known as the "CLASS Act" and introduced originally as H.R.3001, its declared purpose is: "To amend the Public Health Service Act to help individuals with functional impairments and their families pay for services and supports that they need to maximize their functionality and independence and have choices about community participation, education, and employment, and for other purposes."

It has received very little attention, but carries effects that are unpredictable -- both upon the future budgets of workers who do not opt-out of the program and pay its sliding-scale contributions, and also upon future budgets of the federal program that will confer long-term care benefits based upon worker participation and contributions.

A White House web page describes the new optional program as follows:

The Act provides Americans with a new option to finance long-term services and care in the event of a disability.

It is a self-funded and voluntary long-term care insurance choice. Workers will pay in premiums in order to receive a daily cash benefit if they develop a disability. Need will be based on difficulty in performing basic activities such as bathing or dressing. The benefit is flexible: it could be used for a range of community support services, from respite care to home care. No taxpayer funds will be used to pay benefits under this provision.

The program will actually reduce Medicaid spending, as people are able to continue working and living in their homes and not enter nursing homes. Safeguards will be put in place to ensure its premiums are enough to cover its costs.

But much is unknown about the program, as discussed in an excellent article entitled Little-Known Health Care Law Provision Is a Budget Buster, Critics Say, by William La Jeunesse, posted by FOX News (03/26/10).

Under-reported and the under the radar of most lawmakers, the program will allow workers to have an average of roughly $150 or $240 a month, based on age and salary, automatically deducted from their paycheck to save for long-term care.

The Congressional Budget Office expects the government will collect $109 billion in premiums by 2019.

Supporters say the program will relieve pressure on Medicaid and should help keep us out of nursing homes by enabling Americans to save for something most will eventually need -- assistance in eating, bathing or dressing in their old age.

Opponents say the provision is little more than a short-term revenue fix that will eventually add to the federal deficit.

"This is a scary proposition where the government passed a huge new entitlement program with gimmicks and tricks and the American people don't know they will be automatically enrolled in it by their employer if they don’t watch out," said Rep. Devin Nunes (R-CA). * * *

Writer William La Jeunesse, in his article, summarized when the program commences and how it will work:

Scheduled to go into effect in January, actual deductions could take place in 2012.

Here's how the program will work:

-- The federal government will approach employers next year about alerting workers to the proposed deduction.

-- The deduction will work on a sliding scale based on age. Younger workers will be charged less, older workers more. The Congressional Budget Office pegged the average monthly deduction at $146. The Centers for Medicare and Medicaid Services put it higher, at $240.

-- After a five-year vesting period, enrollees who need help bathing, eating or dressing will be eligible to take out benefits, estimated to be around $75 a day for in-home care. * * *

Some limited comments on the subject of long-term care were included in the segment, as taped by reporter, Taunya English in an interview she conducted in my office a couple of weeks ago.

I believe that, as this "optional" program grows in size, Medicaid will revert to its original target audience: Impoverished and disabled persons who could not work or provide for their own long-term care through no fault or decision of their own. I also believe that the benefits offered by the program will not be sufficient to sustain long-term care for the majority of the population, and that our family structures should realign to favor family-oriented care.

This is a significant step towards self-funding of one's own long-term care (to the extent that can be done fairly and directly through a stand-alone federal program), and renunciation of the current perception that the federal government should pay, from general tax revenues, for the long-term care of individuals who may have divested themselves of assets or income in favor of their children or other family members.

You can listen to the segment on a multimedia computer through an audio link on that segment's web page.

Postscript: My older brother, Dennis, was driving in the Bethlehem area on that day, early in the afternoon, listening to WHYY. He was surprised to hear my voice as a participant in the broadcast segment.

He called me, excitedly. I was at a funeral luncheon in Mifflintown, PA. Hearing from my brother about the broadcast was a thrill.