Democrat officials in US Senate have mentioned that discussion on healthcare legislation scheduled later this week would incorporate a new long-term care insurance program to discourage the elderly and disabled patients from visiting hospitals.
Harry Reid, a Democrat Senate majority leader from Nevada spoke on condition of anonymity that the final decision on healthcare reforms has not been made as yet added that voluntary program to be included in the act to be tabled in the Senate on Wednesday.
AdvertisementThe program known as the Community Living Assistance Services and Supports Act, or CLASS Act was given preferential priority by the late Senate Edward M. Kennedy, the former US President. By passing this act in the Senate, the gap in social safety net would get diminished which has so far has received lukewarm response in the current debate raging on US healthcare reforms.
Whether the program would be financially viable from the long-term perspective is being questioned by the fiscal conservatives and government economists. The insurance companies are forming a lobby to have this particular clause deleted from the proposed health-care reforms bill.
With the approval from Obama's government, the house incorporated the program in its healthcare legislation. The health committee had included this clause in the healthcare bill but was cold-shouldered by the Finance Committee in the US Senate. The approach being adopted by Reid in a combined bill would look into the objections of fiscal conservatives by stipulating that premiums from the program that could not be depended upon in balancing the costs of the broader health care bill.
An average cost of nursing home amounts to $70,000 a year. A homecare attendant charges about $29 on an hourly basis. Currently only the temporary nursing home stays are being covered by Medicare. In order for an elder to qualify for nursing home coverage via Medicaid, Savings earned by middle-class households have to be exhausted.
Under the proposed legislation, working individuals would be required to pay a small token as monthly premium during their years in service. In case due to unforeseen circumstances, the individuals are rendered disabled, they would be re-imbursed at least $50 per day that could be used to meet expenses for the services rendered by a home care attendant, for purchase of supplies and equipments, altering or modifying home-settings by fixing bathroom railings or meeting the costs incurred on nursing or home care.
It has been estimated by the Congressional Budget Office that over a 75 year period with the income earned from premiums and with no taxpayer eventually financing, the entire program would become fiscally solvent. It is assumed that an initial monthly premium would average to $123 and a benefit of $75 on daily basis. For benefiting from this program, individuals would sign up at work via the payroll deduction method. Premiums would be required to be paid for 5 years by such individuals before availing the benefits under this proposed legislation. Both the benefits and premiums would be adjusted on an annual basis.
James Firman, President of the National Council on Aging and a supporter of this program mentions that this is a product primarily for baby boomers and for the individuals who are still earning their livelihood and added that if necessary steps are not initiated in the present scenario, boomers may not get another opportunity in future.
Both supporters and critics of the health reforms to be implemented have their own views. Supporters of this legislation mention that the government benefit would provide a stepping-stone upon which private insurance companies could sell their supplemental long-term care coverage. But the industry players are pessimistic about the entire issue and added that new reforms would only create more dilemmas in the market for the consumers.
Just recently the view-point cited by the critics, opposed to the proposed healthcare reforms were validated based on reports published by Medicare economists who are eminent professionals in macro-cost estimates. The report released last weekend mentioned that a voluntary insurance program would attract individuals who actually think they would require the policy cover. Without providing subsidies to the genuine taxpayer, premiums would keep rise, thereby discouraging healthy individuals from signing up and eventually would trigger an "insurance death spiral".
The report added that individuals with health ailments or who anticipated a greater risk of functional limitation in future are likely to participate in larger proportions rather than those with better-than-average health. If this is the reality, then there is a significant risk that the proposed healthcare reforms would be rendered useless.
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