Long-term care is a major health expense for which a majority of us are not covered. Thus, the federal government took a bold step to address this issue through CLASS.
CLASS is a self-financed program designed to help us stay at home if we become disabled. Unfortunately, HHS was unable to reconcile two of the program’s goals—financial solvency for at least 75 years and affordability. This was mainly due to the unlikelihood of enough young and healthy participants in the program.
Historically, most people needing long-term care services received them in institutions. Over the years, priorities, values, and expectations changed, especially, as nursing homes have become too expensive.
According to the AARP, 89% of Americans age 50 and over would prefer to live independently in their own homes and communities as long as they can, rather than relinquish control over their lives in a nursing home. CLASS aims to do just that.
As Minnesota’s most recent budget battle has shown along with several studies, community- or home-based care is also the most cost-effective solution to long-term care. With nursing homes running somewhere between $75-85,000/year.
Because Medicare only covers short-term stays for rehab, Medicaid has become the default provider. But Medicaid is only for low-income people. So, seniors and the disabled literally have to impoverish themselves to qualify. Moreover, relying on Medicaid is unsustainable and costly for the state. Currently, about 50 % of all nursing home costs in Minnesota are paid by Medicaid for people who have wiped out most of their assets and income paying for long-term care expenses.
CBO estimates CLASS will reduce Medicaid spending over 10 years because individuals would be served in community-based settings rather than in expensive institutional settings. That is, CLASS has the potential to reduce reliance on Medicaid and provide relief for family caregivers.
Of course, there are real technical challenges at the heart of the CLASS legislation. But that should not prevent us from finding solutions to these challenges.
It is unlikely Congress will address the shelved CLASS program anytime soon—unless it involves repealing it. Therefore, our state lawmakers need to seriously consider creating a similar program that addresses long-term services and support for Minnesotans.
It is essential that a viable program be put into place before the retirement of the baby boomers is in full swing.