A prospect of mine asked me to keep her up to date on what is happening. Here is the leter I sent to her. It is worth reading:
You wanted me to keep you up to date on legislative action on long term care insurance. Here are few items that arose from the new Health Care Legislation. The first is:
The CLASS Act: Community Living Assistance Service and Support Act. The act mandates starting 2012 or perhaps 2013 (they still have not finalized the writing) that all full time employees will be given the opportunity to sign up for long term care insurance underwritten by the US Government. This is a voluntary act.
1) an individual can choose not to sign up and enroll at a later time. There will be a future penalty if they wait.
2) The premiums are estimated by the GAO to be somewhere in the area of $100-$250 per month. This ambiguous number is the result of being unable to predict how many will sign up. It is estimated anywhere from 10% to as high as 18% of those offered will sign up. The premiums are to hold themselves for 75 years.
3) A worker will have to pay in for five years before the coverage starts.
The insurance industry is excited about this because it creates an awareness of long term care and our products will beat CLASS for everyone except the chronically ill. For further information, check these out:
http://newoldage.blogs.nytimes.com/2010/03/24/a-new-long-term-care-insurance-program/
A second state law went into effect in 2010 but will not be implemented until some time in 2011. This is called ”The Partnership Act”. It arose from model legislation from the National Association of Insurance Commissioners. Under current law, if you exhaust your assets and go to a Medicaid facility, they likely will cover your care however upon your death, if there are assets in your estate, Medicare will attach those assets to recover what they paid for your care. The Partnership Act allows you to buy a compliant long term care insurance policy from an insurance company and the amount of coverage you bought will offset what Medicaid might pay. For example, you buy a $300,000 benefit, the first $300,000 of Medicaid is exempt from recovery. For further information: http://www.rwjf.org/files/research/medicaideligibilityissuesforltcpartnership.pdf
The other laws are some what under the radar screen. They are called Filial Laws. These laws have been passed in thirty states and North Carolina is one of them. Our law is General Statute 14-3261.1 and was passed in 1999. The law requires children to pay for the necessities of their parents if their parents cannot take care of themselves. Several states, are writing implementing legislation. Under the proposed legislation, the state can attach up to 25% of a child’s assets in excess of the federal poverty level, to take care of his/her parents. http://assets.aarp.org/www.aarp.org_/articles/bulletin/interactive/filialpiety/index.html
If I have motivated you to be interested in long term care insurance, please call.
