Obama supports new long-term care benefit

WASHINGTON — Moving to broaden the scope of the health care overhaul, President Barack Obama threw his support Tuesday behind creation of a program to help families struggling with burdensome costs of long-term care.

The voluntary insurance program — sponsored by Sen. Edward M. Kennedy, D-Mass. — would pay a modest daily cash benefit of at least $50 that people could use for a range of in-home services or nursing home expenses.

While Kennedy’s own Senate health committee will include the long-term care provisions in its version of health care legislation, other lawmakers could prove a tough audience. The Congressional Budget Office is already warning that premiums won’t be enough to cover benefit costs after the program has been in operation for a few years.

Republicans said that over the next 75 years, it could eventually cost $2 trillion.

Nonetheless, Obama’s support could persuade skeptical moderates to take a second look at Kennedy’s idea, known as the Community Living Assistance Services and Supports Act, or CLASS Act, for short.

In a letter to Kennedy released Tuesday, Health and Human Services Secretary Kathleen Sebelius said Obama believes the long-term care program is an “innovative” idea that should be “part of health reform.”

“Enactment of this important legislation would expand resources available to individuals and families to purchase long-term services and supports to enable them to remain in their own homes in the community,” Sebelius wrote.

Supporters say the insurance program could help ease some of the pressure on Medicaid by helping elderly and disabled people stay in their homes. Medicaid pays most of the nation’s nursing home bills.

“You can’t really reform health care without addressing long-term care,” said Larry Minnix, CEO of the American Association of Homes and Services for the Aging, which represents nonprofit care providers.

As Kennedy envisions it, workers and their spouses would be able to enroll in the insurance program for a monthly premium of $65. For middle-aged people, that’s well below the cost of private long-term care insurance. People would have to pay premiums for at least five years before they could claim benefits, and they would have had to be working at least three of those years.

Beneficiaries would qualify for assistance if they become disabled and unable to perform at least two or three basic activities such as bathing or dressing.

Because of the five-year vesting period for benefits, congressional budget analysts estimate the program would run a fat surplus in its first 10 years. Soon after that, it would get swamped by claims. To keep the program financially solvent through 2050, the government would have to raise premiums significantly, to $85 a month, and keep benefits at the $50 daily minimum, the budget office said. And even with those measures, the program might still increase the deficit.

To stanch the red ink, the health committee agreed to an amendment by Sen. Judd Gregg, R-N.H., that would require premiums to take into account the long-range costs of the program.

“Our nation needs to address the growing problem of providing health care services for older individuals who have trouble with activities and tasks of daily life,” said Gregg. “Community-based care has proven time and again that it can provide better, more comfortable and less expensive care. However, providing this care must be done from the start in a fiscally responsible manner that protects the taxpayer.”