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Health care reform: CLASS Act aims to address long term care insurance

Medical advancements have helped increase life expectancy, but there's a catch to living longer: You're more likely to need expensive long-term health care that you didn't anticipate. There are about 10 million people in America who need long-term care, and with the aging boomer population, that number isn't going down. More people will be needing care in the golden years -- and help paying for it.

Long-term care insurance has been traditionally been a hard sell: Many people believe the government will take of them if they need to enter a nursing home, or they don't look into purchasing long-term care insurance until they have a medical condition that disqualifies them. Starting in 2011, the health care reform law has a provision intended to address long-term care needs.

Designed as a voluntary, long-term care insurance program, the Community Living Assistance Services and Supports act, or CLASS, is meant to help offset the cost of long-term care and give patients greater choice in their care.

How CLASS long-term care coverage works

If you elect to participate in the CLASS coverage, you will pay a monthly premium, which has yet to be determined. You cannot be turned away for pre-existing conditions.

To be eligible to receive benefits, you must pay into the plan for five years, be at least 18 years old and unable to perform at least two pre-designated functions of daily living, such as eating, bathing or dressing. A condition that requires supervision or assistance, like Alzheimer's or a traumatic brain injury, can also qualify you for benefits. CLASS isn't just for the elderly -- any person requiring long-term care would be covered if they pay into the plan.

Once it's determined that you need long-term care, the beneficiary of your policy will receive a cash payment that can be used on home health care, nursing home care, day care attendants -- whatever care or assistance the patient and family determine that they most need.

The CLASS Act is not designed to replace Medicaid, Medicare or private long-term care insurance. It is meant to be additional coverage and does not affect eligibility for either government program. It won't impact any private long-term care insurance you might already have, because CLASS benefits can be used to pay for expenses not covered under your policy. The exact start date of the CLASS program, premiums and benefits have yet to be determined by the Department of Health and Human Services, but the program is slated to being in early 2011.

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