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New federal insurance program will give seniors, disabled help with personal tasks

This article first appeared in the St. Louis Beacon, April 4, 2010 - The last time Congress ventured into the catastrophic health insurance territory to help Medicare recipients, the results were a political disaster. Although less aggressive and boisterous than the fight against this year's health-reform law, the outcry over the catastrophic bill in 1988 included plenty of angry voices. Most were upset over a surtax imposed on the upper- income elderly to help pay for catastrophic care. The reaction prompted Congress to scrap the act within six months after passing it.

This time around, federal lawmakers are offering what some like to call the CLASS Act. It will give the elderly, among others, a modest financial cushion to help cover non-medical costs associated with catastrophic illnesses. CLASS is an acronym for the Community Living Assistance Services and Supports Act. It's a little-noticed provision in the new health-reform law. Once it takes effect, it will mark the beginning of a government-sponsored, long-term care insurance program.

At least 10 million people need help with basic tasks, such as bathing or dressing, after illness, disability or aging has eroded their ability to take care of themselves, according to one Kaiser study. Generally, the study found, these services are paid through Medicaid (40 percent) and through out-of-pocket contributions (22 percent). The idea of a dedicated source of funding for these individuals was initially pushed by the late Sen. Edward M. Kennedy.

Although CLASS has been promoted as a benefit for seniors, enrollment will be open to people as young as 18 hampered by chronic illness or disability.

Examples of those who could benefit from the CLASS Act include people disabled by strokes, multiple sclerosis, Parkinson's disease, Alzheimer's disease and injuries from falls.

Louise Meret-Hanke, who specializes in health management and policy issues at St Louis University's School of Public Health, says CLASS will fill some of the gap in meeting personal-care needs.

"We have a hodgepodge of funding where most of it lands on Medicaid and out of pocket expenses," she says. While helping a person take a bath or eat a meal isn't usually considered a medical services, such services are important to a person's well-being, she says.

The program will work this way: Individuals can begin to pay in this year and they will become vested over a five-year period. In exchange, they will be eligible for cash benefits to offset the cost of non-medical, personal-care services. In addition, the program might allow some to remain independent and avoid entering nursing homes, where Meret-Hanke says the cost of care is about $70,000 a year.

The premiums are collected through payroll deduction, she says, adding that while enrollment is automatic, employees can opt out. Employers can also choose not to participate. In that case, workers will be able to make payments on their own to participate.

The Department of Health and Human Services will work out the details about premiums and payouts. Initial projections are that monthly premiums will fall into the $123-range for life-time benefits averaging $50 a day.

Meret-Hanke says that "$50 a day may not sound like a lot, but it can be very helpful to people. You don't always get that much money. If you're not disabled, you'll get a lesser amount and this can be used to pay a family caregiver who often gives up work or cuts back on their hours to take care of a family member."

People will qualify, she says, either by needing help due to a cognitive impairment requiring supervision or by being unable to complete at least two daily activities -- such as moving from a chair to a bed, walking, bathing, dressing, using the toilet or eating.

The program might be a winner because it's aimed mainly at the elderly (and adults with disabilities), she says, adding, "we generally like elderly people and want them to be cared for. Long-term care is a small part of total health- care spending - but people who need it use a lot of acute care."

She praises this program, saying its benefits have been overshadowed by more controversial provisions of the health-reform law. One reason, she says, is because CLASS is "a voluntary program. It was not as controversial as an individual mandate to buy health insurance or the public option, which was dropped. That is, there were so many other things that made more exciting headlines."

Although a sleeper during the health debate, the program has critics, including insurers, who argue that the cost and payout projections are flawed.

While saying CLASS is a good idea, Meret-Hanke says that's a valid concern, noting that the projected benefits of "$50 per day may not be enough to help people who do not qualify for other programs. Can people afford the premiums? Will it just attract those who are less healthy, which would drive up costs? This could make the program financially unviable."

While Meret-Hanke says she has "great hopes for this legislation," implementing it will be "a learning process. We are going to have to see how things go and hopefully make some adjustments."

Funding for health reporting is provided in part by The Missouri Foundation for Health, a philanthropic organization whose vision is to improve the health of the people in the communities it serves.

Robert Joiner has carved a niche in providing informed reporting about a range of medical issues. He won a Dennis A. Hunt Journalism Award for the Beacon’s "Worlds Apart" series on health-care disparities. His journalism experience includes working at the St. Louis American and the St. Louis Post-Dispatch, where he was a beat reporter, wire editor, editorial writer, columnist, and member of the Washington bureau.