July 12, 2016
Obamacare and Long-Term Care Insurance
Obamacare fails to address the growing coverage gap.
Despite the 2,200 page, $2.5 trillion effort known as the Affordable Care Act and the 20,000 pages of Obamacare regulations, there is a growing coverage gap that Obamacare fails to address. As a result, millions of Americans have been driven into poverty and the trend will continue.
It is uncommon for Americans to have long-term care insurance. This means they will have to dig into their own pockets if they end up in a nursing home or need home health care due to stroke, Alzheimer’s disease or other long term disabilities. Long-term care is the most significant out-of-pocket medical cost for the elderly and a leading cause of personal bankruptcy. Nursing homes typically cost more than $90,000 per year and home health care can run close to $10,000 per month.
Medicare only provides minimal coverage for nursing homes or home care like short-term recovery from acute illnesses and hospitalizations. Dementia and other long-term disabilities can result in costs for $200-$400 per day over the course of several years.
Two-thirds of working households approaching retirement have failed to save one year’s income. The most feasible option to cover a family member with a long-term disability is to exhaust family income and assets to qualify for nursing home care through state Medicaid programs. While the allowed assets that the family can keep varies by state, it is generally close to $1,500 in monthly income.
Even in the 30 states that expand Medicaid coverage under Obamacare in 2014, a two-person family would still require monthly income less than $1,800 to qualify for Medicaid. The Obamacare bill included a voluntary “CLASS program” for long-term care that would have provided a mere $50 per day of benefits, barely 10 percent to 25 percent of what is needed.
Sen. Kent Conrad, the Democratic chair of the Senate Budget Committee called the CLASS program “a Ponzi scheme of the first order.”