Smaller Print Larger Print
800-336-4529 618-985-4529
As you or your loved one ages, questions begin to arise about the future. This section of our Elder Law and Life Care Planning Attorney website helps our readers learn more about the issues that concern them most regarding Southern Illinois elder care, life care planning, Alzheimer's disease, memory loss, Medicaid planning, nursing home placement, assisted living options, caretaking, and elder care crisis.

Life Care Planning, Estate Protection, Disability,
VA & Medicaid Assistance Lawyers

Get Medicaid Out of Long-Term Care

Medicaid is the largest provider of long-term care. It spent more than $100 billion last year, more than one-third of the Medicaid budget. Indeed, Medicaid pays more than 40 percent of this country's long-term care bills. In some counties in southern Illinois, Medicaid pays 80-90 percent of the nursing home bills.


It has been said that there is one set of laws for the well-informed and another set of laws for the uninformed. This is particularly true when it comes to Medicaid and its use to finance long-term care. For the well-informed, Medicaid has become the primary way the middle-class pays for long-term care.


Many have questioned why Medicaid is supplying long-term care services to the middle-class elderly. They ask "why should seniors and their spouses have to impoverish themselves to get access to desperately-needed medical care?"


Recently, much attention has been focused on just a few of the provisions in the Health Care Reform Bill that was passed by the U.S. House of Representatives. One provision of that Bill, which has received little attention, is a proposal for the federal government to offer long-term care insurance. The CLASS Act, short for Community Living Assistance Services and Supports, is included in both the House and Senate health-care reform bills. The proposal for federal long-term care insurance was originally proposed by the late Sen. Edward Kennedy. Under the CLASS Act, Americans would pay a premium, originally estimated at $65 per month. After they had contributed for at least five years, participants who needed long-term care would be eligible for a modest benefit to pay for a range of services that would help them stay in their homes. The benefit would depend on the degree of incapacity, but would average $50 a day.


In its preliminary analysis of the House bill, the Congressional Budget Office projected that because the CLASS Act would pay out far less in benefits than it would receive in premiums over the 10-year budget window, it would reduce deficits by about $72 billion and by a smaller amount in the following decade. After 2029, however, the program would start contributing to the federal deficit, but by a small amount compared to other provisions of the bill.


Some senators have expressed reservations about the CLASS Act. Sen. Kent Conrad, D-N.D., called the CLASS Act "a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of." Other senators stated:"We have grave concerns that the real effect of the provisions would be to create a new federal entitlement program with large, long-term spending increases that far exceed revenues."


The insurance industry is fighting to remove the CLASS Act from health reform legislation, arguing that its modest benefit will not adequately protect Americans who need nursing home care or 24-hour home health care services.


But some forward-thinking long-term care insurance agents believe the Act will be a net boon to their industry. They believe that just as millions of older persons purchase health insurance to supplement Medicare, the CLASS Act will send a strong message to seniors that healthcare reform does not include free long-term care.


While passage in the House of the health care reform legislation is good news for champions of health care reform, a long road still lies ahead. If the Senate is able to pass their health care reform bill, House and Senate negotiators will have many differences to resolve in a conference committee. One of those differences on the current horizon appears to be over the CLASS Act. At the core of the debate will be the issue of whether Congress will get Medicaid out of the long-term care business and give seniors and their families a viable alternative to Medicaid.


Richard Habiger is an elder care attorney, who focuses on estate protection, Medicaid and VA benefits, Alzheimer's and life care planning - all in collaboration with a multi-disciplinary team dedicated to helping seniors and their families navigate the long-term care system. You may contact him at 618-549-4529 or



This article is scheduled to be published in the December 2009 edition of the Southern Business Journal.