Steven P. Wallace (from the left) is the associate director of the UCLA Center for Health Policy Research and a professor in the School of Public Health. Bruce Chernof is the president and CEO of the SCAN Foundation. This op-ed appeared Sept. 16 in the San Francisco Chronicle.The Bay Area can't afford to grow old.
Half of all Bay Area voters age 40 or older could not afford three months of nursing home care (which in California carries a hefty average price tag of $6,500 a month), according to a new poll released by the SCAN Foundation and UCLA Center for Health Policy Research.
Even less costly home care (about $1,800 a month for part-time assistance) is a challenge for Bay Area residents — 43 percent can't afford even three months of care.
Many people mistakenly believe that Medicare will pay for their long-term-care needs, but it only pays for short-term rehabilitation. And the cost of care can run into the thousands of dollars a month at a time when incomes are stagnant or declining.
No wonder two-thirds of Californians say they are worried about being able to pay for their health and long-term-care needs. Sixty-three percent of those polled thought they would someday need this kind of support; however, research shows that 70 percent of Americans age 65 and older will need long-term-care services at some point in their lives.
Currently, long-term-care insurance is one of the few forms of protection the average American has against the high cost of care, yet 85 percent of California voters do not have a policy, often because the cost can be prohibitive.
California voters across the political spectrum want elected officials to make these issues a high priority. Respondents to our survey embraced the core concepts of the Community Living Assistance Supports and Services plan, or CLASS, which is part of the new federal health care law. Set to launch in the next two years, it is a federal long-term-care insurance option that workers can purchase to help pay for future care and supportive service. CLASS is entirely self-funded through premiums, not taxpayer dollars.
CLASS will be available to all working Americans over the age of 18, and it offers a lifetime benefit for those with difficulties performing daily tasks without exclusion for pre-existing conditions. Enrollees must pay premiums for at least five years before receiving benefits.
Once workers enroll, they will pay a monthly premium that is based on their age; younger people will pay less than older people.
Though certain elements of the program are still being fine-tuned before rollout, cash payments are estimated to range from $50 to $75 per day and could be used to purchase services such as in-home support or assistive technology.
The success of CLASS will depend upon broad participation. Most people will be able to enroll through their jobs; others can purchase the insurance individually.
Preparing for long-term-care needs should be a fundamental step of financial planning, like enrolling in a 401(k), but greater awareness is needed.
Just 2 percent of Californians polled had heard about CLASS, yet 88 percent of respondents statewide were supportive once they learned about it.
As the Baby Boomer population ages, these issues will become even more pressing. Now is the time for our leaders to step up to this issue that affects — or soon will affect — us all.