A Report on the Actuarial, Marketing, and Legal Analyses of the CLASS Program. Attachment 3: Summary of Proposed Plans

10/14/2011

SUMMARY OF PROPOSED CLASS BENEFIT PLANS
  Proposed Plan 1
Phased Enrollment
Proposed Plan 2
Phased Enrollment + Temporary Exclusion
Proposed Plan 3
Phased Enrollment + Limited Initial Benefits
Proposed Plan 4
Temporary Exclusion
Proposed Plan 5
Scheduled Increasing Benefits
Proposed Plan 6
Pre-Paid
Description Group enrollments first, number of individual enrollments based on number of enrollees through group enrollment Phased enrollment as with Proposed Plan 1 plus temporary exclusion of benefits for the first 15 years of the beneficiary’s enrollment due to a serious prevailing medical condition at time of enrollment that caused the functional limitation. Waived for group enrollment. Phased enrollment as with Proposed Plan 1 plus low daily benefit for duration of claim, if claimed during the first 20 years of the beneficiary’s enrollment. Waived for group enrollment. Temporary exclusion of benefits for the first 15 years of the beneficiary’s enrollment due to a serious prevailing medical condition at time of enrollment that caused the functional limitation. Scheduled increasing benefits for this 23 years, can be packaged with private insurance so that the total benefits at the same level as the ultimate benefit. Require offer of a basic CLASS plan (i.e. Proposed Plan 6 -- Pre-Paid Plan). No restriction on benefits from enrollment methods, from time of claim or medical condition at time of enrollment.
Benefit Eligibility & Amounts
  • All claim years:
    • $50 daily benefit for 2 or 3 ADLs
    • $60 for 4+ ADLs or cognitive impairment
  • Indexed by positive change in annual CPI
Same as Proposed Plan 1
  • If claimed during first 6-20 years of enrollment:
    • $5 daily benefit for 2 or 3 ADLs; $6 for 4+ ADLs or cognitive impairment, not indexed until claim
  • After 20 years:
    • $50 daily benefit for 2 or 3 ADLs; $60 for 4+ ADLs or cognitive impairment
    • Indexed by positive change in annual CPI
Same as Proposed Plan 1
  • If claimed during 6-25 years of enrollment:
    • $20 daily benefit in year 6 for 2 or 3 ADLs, increased by $6.50 each year
    • $24 daily benefit in year 6 for 4+ ADLs or cognitive impairment, increased by $7.80 each year
  • After 23 years:
    • $150 daily benefit for 2 or 3 ADLs
    • $180 for 4+ ADLs or cognitive impairment
  • All daily benefits also increase by 3% each year
  • Private insurance can provide benefits (with or without underwriting) such that the total benefits from year 1 equal to the ultimate benefits after 25 years
  • All claim years:
    • $50 daily benefit for 2 or 3 ADLs
    • $60 for 4+ ADLs or cognitive impairment
Benefit Duration 100% of benefit amounts for first 5 claim years, 20% thereafter Same as Proposed Plan 1 Same as Proposed Plan 1 Same as Proposed Plan 1 100% of benefit amounts for first 3 claim years, none thereafter Same as Proposed Plan 1
Other Benefit Features
  • Benefit approved on last day of a month, payment begins on the following day
  • Benefits deposited in Independence Account at beginning of every week
  • Can carry over month to month but not year to year
  • Debit card issued to pay for services & support; cannot be used to withdraw cash
  • Plan of care required
  • Counselor assigned (cost of counseling not charged to benefits)
  • List of excluded services & support; counselor can make exceptions
  • Payment to spouse limited to $10/day indexed (or 20% of daily benefit if less)
  • For payments to non-agency direct care workers, beneficiary must use fiscal intermediary; cost is subtracted from benefit amount
Spousal Shared Benefit If a couple is enrolled, no benefit reduction after 5 claim years up to the unused portion of the other spouse’s first 5 claim years (e.g., the couple shares up to 10 years worth of benefits, up to 6 years for Scheduled Increasing Benefits) None
Premiums
  • 4% annual increase that stops at age 70 or after 5 years of enrollment, if later
  • Premium schedules vary by age at enrollment (or age at reenrollment if reenrolled after 90 days from lapse)
    If requested, can freeze premium with a reduction on daily benefits; if premiums increase for reasons other than the annual increase, “frozen” premiums are not exempt
  • 3% annual increase each enrollment year to age 65
  • Remain level at and after age 65
  • Level premium
  • Premiums vary by age at enrollment (or age at reenrollment if reenrolled after 90 days from lapse)
Waiver of Premiums Premiums waived during time eligible beneficiaries are receiving benefits Same as Proposed Plan 1 Premiums waived only if claimed after 20 years Same as Proposed Plan 1 Premiums waived only if claimed after 25 years Premiums not waived
Reenrollment
  • Within 90 days from lapse:
    • Pay back premiums
  • 90 days to 5 years:
    • Pay back premiums after first lapse
    • Satisfy earnings requirement again
    • Pay future premiums based on age at reenrollment
  • More than 5 year from lapse:
    • Satisfy earnings requirement again
    • Pay actuarially sound future premiums
  • Within 90 days from lapse:
    • Pay back premiums
  • More than 90 days:
    • Pay back premiums after first lapse
    • Satisfy earnings requirement again
    • Pay future premiums based on age at reenrollment
    • Satisfy temporary exclusion again
Same as Proposed Plan 1 Same as Proposed Plan 2 Same as Proposed Plan 1 Same as Proposed Plan 1

 

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