Long Term Care in New Health Law - Part Two

Part Two: State Incentives and the CLASS Act

Yesterday we wrote of the coming changes to Medicare and Medicaid under the Patient Protection and Affordable Care Act which will act to further a transition from institutional to "community-based" and "at home" health care for the disabled and the elderly.  Today we examine some of the finer points of that change.

In 2005, the "money Follows the Person Rebalancing Demonstration" program was created to help states transition individuals from institutions to the community.  The new health law extends this demonstration program--originally set to expire September 30, 2011--to 2015 and reduces the minimum nursing home residency requirement to 90-days, rather than 6-months.  In 2007, CMS awarded $1,435,709,479 in grants with states proposing to transition over 34,000 individuals out of institutional settings over the five-year demonstration period.  Thirty states and the District of Columbia were awarded grants.

The health reform law also provides an incentive for states to devote more Medicaid funding toward community-based services.  Currently, only 4 states spend more than 50% of their Medicaid dollars on HCBS.  Under the new health law, states spending less than 50% of Medicaid long-term services and supports (LTSS) dollars on HCBS may receive a higher federal match as an incentive ti increase their HCBS spending.  States spending less than 25% on HCBS as of 2009 must aim to reach 25% no later than October 1, 2015, while all other states must have targeted spending percentage of 50% by October 1, 2015.  CLICK HERE to learn more.

The new health law also enacts the Community Living Assistance Support Act (CLASS Act), which creates a national long-term care insurance program financed through voluntary payroll deductions that will provide cash benefits to enrollees who are unable to perform two or three activities of daily living (ADLs).  Teh program has a five year vesting period and would pay enrollees no less than $50 per day to be used to offset the cost of long-term are services, including covering things like home modifications or paying for home health care aides.  To participate, individuals must be 18 or over and actively working.  "Actively working" includes part time workers and is not based on the number of hours and individual works, but by meeting in one year the baseline Social Security earnings requirement for one quarter--which is currently around $1200.  This program should be online by October 1, 2012, but payouts will not begin until 2016.  For more information, CLICK HERE.