Most Americans have followed the news and discussions surrounding the so-called “fiscal cliff” and what it might mean for the financial stability of our country, and by extension the world economy.  While defaulting our debt and financial obligations as a country is certainly something seen by most rational-thinking Americans as not a good thing, few realize that the “fiscal cliff” discussions also touch a lot closer to home in many areas, including the issue of long-term care and how an entire generation of Americans will finance their future long-term care needs.  There were two measures that passed on January 1st in the “fiscal cliff” deal that relate to long-term care with the main one being Class Act Long Term Care Insurance.

Repeal of the CLASS Act Long Term Care Insurance – finally

One of the measures that passed was the repeal of the CLASS Act Long Term Care Insurance program.  This was widely seen by many as an inevitability as even the Obama administration abandoned it nearly a year ago as not being financially viable way to tackle the country’s future long-term care crisis.  The program was meant to create a voluntary Class Act Long Term Care Insurance policy program but was predicted to produce premiums too high for anyone to afford for the benefits that they would receive and suffered from many flaws in its design, namely the adverse risk selection problems, as well as other fundamental issues.  What the Class Act Long Term Care Insurance program turned into was a way to manipulate the laws of Obama Care and use the Class Act premiums to the tune of around 124 Billion to fund the Affordable Care act and make it seem deficit neutral.

This maneuver could be done by the politicians because the Class Act Long Term Care Insurance program has a five year waiting period before one could use their policy.  The law makers ceased on this exclusion and used those five years of premiums they would have collected, to make the Obamacare plan seems deficit neutral.  When the dust settled after Obama Care was passed into law, the question people had was what would happen when people began to file Class Act Long Term Care Insurance claims after that five year deductible period?  Where then would the money come from to pay claims?  The answer became obvious that there would be no money left after Obama Care got a hold of the funds. Thankfully, cooler heads prevailed and the Class Act Long Term Care Insurance program was removed as part of the Fiscal Cliff bill passage.

Another Government Commission to study an issue, really?

The second measure that passed is meant to replace the CLASS Act by forming a national long-term care commission to look at the problem and make sound and viable recommendations to address it.  The problem, put simply, is that Medicare and regular health insurance don’t cover so-called long-term care services like nursing homes and in-home care.  And, you have to be poor enough to qualify for Medicaid, which most Americans are not and are “in the middle.”  So, it is highly recommended by financial experts that you purchase a Long Term Care Insurance policy that will insure you and your spouse against the high cost of long-term care.  By 2016 our national debt will be around 22 Trillion, common sense tells us that there simply will not be funds to pay for your Long Term Care bills unless you are poor.  If you are poor, we are a good country and take care of the less fortunate, so you will be taken care of.  If you have assets, you will be paying for your Long Term Care bill until you run out of money.

Will the new, National Long-term Care Commission work?

The answer is, unfortunately, doubtful.  The panel has been given a very tight timeframe.  Members must be appointed within a month and recommendations to Congress submitted in six months.  And, the panel and it’s work have no supporters in the White House nor is this panel tied to any department, such as Health and Human Services.  So, it is in the “bureaucratic ether”, so to speak.  Not to mention, it’s been nearly 20 years since this issue was last addressed by the Pepper commission and the problems have grown, gotten more complex and there are more Americans entering retirement than ever before, all while Long Term Care Insurance rates continue to rise.

Don’t leave your retirement up to the government, protect yourself.

The best thing you can do right now is to look into purchasing a private, Long Term Care Insurance policy to cover your future long-term care needs.  Waiting for the government to address this issue, especially in the toxic financial and political climate we’re in, is not a sound way forward.  The experts here At LTC Tree can help.  We are the largest virtual Long Term Care Insurance brokerage in the country and work with the top, blue chip carriers to get you the best policy for your money available.

If you simply fill out our form, we’ll get you quotes from these top, blue-chip carriers.  Then, we’ll help you navigate the options in your Long Term Care Insurance policy and make sure you get a plan that is right for you.    Thanks for reading today’s blog.  Please visit  ltctree.com again soon for the best in Long Term Care Insurance policy advice, rates, quotes and comparisons.