Cost issues surround long term care insurance, nursing homes

As Congress considers a proposed long-term care insurance program as part of health overhaul plans, nursing homes costs are going up.

The Washington Post reports on the Community Living Services and Support (CLASS) Act, which would create a government insurance program for long-term care: "The idea has been around for years, and the late Sen. Edward M. Kennedy (D-Mass.) pushed to have the measure included in the health-care overhaul package that passed the Senate health committee in July. A similar measure was also adopted by voice vote in one of the three House committees handling health care. ... The idea is to create long-term care insurance that would be available to anyone, including those who are already disabled. People would be automatically enrolled, unless they chose to opt out, and would pay a premium in exchange for the opportunity to receive cash benefits to cover the cost of home care, adult day programs, assisted living or nursing homes after they had been enrolled for at least five years."

Federal officials would set the program's premiums and benefit levels, "but advocates predict that the program would provide beneficiaries with a minimal sum, around $75 a day. The proposal has gained momentum in recent days as Democrats in both the House and Senate cast about for cash to help finance a final health package. Because the program would begin taking in premiums immediately but would not start paying benefits until 2016, congressional budget analysts have forecast that it would generate a nearly $60 billion surplus over the next 10 years, cash that would help the larger measure's balance on paper" (Montgomery, 10/27).

MarketWatch reports: "If ever there was a reason for buying long-term care insurance (or being very, very wealthy or very, very poor) it's this: The cost of a private nursing home rose 3.3% to $219 per day or $79,935 a year, according to a 2009 MetLife survey." Because the average nursing home stay lasts about 2½ years, a consumer would need to set aside about $200,000 to cover those costs. "Now, truth be told, that's the average. ... The other truth is this: You might not end up in a nursing home. At present, some 1.5 to 2 million Americans go to a nursing home in any given year, but it's quite possible you might need a home health aide or move into an assisted living facility at some point in your life. The costs of those services aren't cheap either, according to MetLife" (Powell, 10/27).

The Sacramento Business Journal also reports on increasingly long-term care costs and notes: "Assisted-living rates also increased 3.3 percent, to an average of $3,131 per month or $37,572 a year. They were an average of $3,412 per month in Sacramento, or $40,944 a year. Home health aides now cost an average of $21 per hour in California and Sacramento; adult day-care services run $67 per day statewide and $73 in Sacramento. These figures reflect a 5 percent increase in the cost of home health aides and a 4.7 percent increase in adult day-care services" (Robertson, 10/27).

Related KHN stories: For One Senior, Medicaid Provides Model Care, Medicaid Explained