A relatively unknown provision in the massive national health-care bill that became law earlier this year creates the country's first public-option long-term care insurance program, and the program is being eyed with hope and skepticism, depending on who's looking at it.

The Community Living Assistance Services and Supports (CLASS) Act aims to defray certain expenses for people who need assistance to continue living independently in their homes or in some cases in independent-living centers. The act creates a voluntary payroll deduction program through which participants will have to pay monthly premiums for at least five years before they're eligible for benefits.

Michael Godek, who owns and manages the Towson, Md.-based Senior Helpers franchise here, says he's surprised by the lack of buzz about the CLASS Act.

"The only reason I know about it is because I'm in the in-home industry, and it's going to grow my business," he says. "It will be huge for job creation." He says Senior Helpers dispatches 50 employees out of offices in Spokane Valley and Coeur d'Alene to serve clients in Spokane and Kootenai counties.

David Wolf, a long-term care insurance agent with Wolf & Associates, of Spokane, says people in the private insurance industry are on both sides of the fence when it comes to CLASS.

"Some in the industry see it as the worst thing that ever happened, because it will pressure insurers to change the way they underwrite policies," he says. "Others think it will create public attention and launch the boon that the industry is waiting to see."

While the CLASS Act was passed with good intentions, it has "arguably low, but helpful benefits," Wolf says.

He says, though, that he's doubtful the CLASS plan, as it's being portrayed, will replace private long-term care insurance.

"I still think that most people who can do so will migrate to private insurance, because they potentially can access lower premiums elsewhere," he says.

Although certain aspects of the CLASS Act will begin to go into effect in 2011, the U.S. Department of Health and Human Services has until late 2012 to work out details of the plan. For that reason, Wolf says he doesn't expect the first premium payments to be collected until 2013, and the earliest anyone would receive CLASS-plan benefits would be 2018.

The CLASS plan won't cover all of the costs of a service-rich assisted living center or skilled-nursing care, but is intended to help people who need assistance to pay for at least two activities of daily living to remain living independently for as long as possible, Godek says.

Activities of daily living (ADL) include bathing, dressing, grooming, walking, and eating.

The CLASS plan also would ease the government's cost in providing Medicaid coverage to people who can't afford to pay for such assistance, and would assist those with income and assets that preclude them from qualifying for Medicaid assistance, Godek says.

Congress has required that the CLASS plan be fiscally sound for 75 years.

While benefit and premium levels are to be set by Health and Human Services, the Congressional Budget Office estimates an average monthly premium of $123 for an average daily benefit of $75. Wolf, however, says there are disagreements within the government about potential premium rates. The Centers for Medicare and Medicaid Services, a division of Health and Human Services, has estimated that average monthly premiums will be $240 a month, he says.

Current proposals under the CLASS plan would provide for $5 monthly premiums for students and low-income enrollees, and future rate increases would be smaller for enrollees older than 65 years of age than they would be for working-age participants in the plan, he says.

"It's going to have some degree of policyholders carrying the burden for people who have access to lower premiums," Wolf says. That's counterintuitive to how private insurance carriers set their rates based on age and health, he says.

Employers who participate in the CLASS plan will withhold premiums from paychecks, similar to how Social Security and Medicare contributions are withheld, but unlike Social Security and Medicare, participation would be voluntary, and employees could choose to opt out, Godek says.

Employers also could opt out, and Health and Human Services will develop an alternate enrollment method for workers whose employers do so.

While the CLASS plan would pay only a fraction of the cost of living in assisted-living or skilled-nursing facilities, $75 a day would pay for about three hours of in-home assistance that would help people live in their homes longer than they could safely without assistance, Godek says.

"Three hours a day is enough to keep some people in their homes for a long time," he says. In that amount of time, an in-home caregiver could fix a nutritious meal, help a care recipient bathe and dress, and provide some light housekeeping, he says.

"The greatest fear of an elderly person is losing independence," Godek says. "This will help them keep it."

That in turn would help such people hold onto their assets longer and eventually should save on costs to the Medicaid and Medicare systems, he says.

Skilled-nursing facilities can cost a resident more than $8,000 a month, and Medicare is picking up what people can't pay, Godek says. "CLASS should save the government a lot of money," he says.

The CLASS plan will start paying on the day an enrollee is certified by a licensed medical professional to qualify for benefits, and, unlike many private insurance policies, the CLASS plan has no lifetime benefit limit, Godek says.

"Many private long-term care insurance policies offer three years of benefits, and that's it," he says.

Also unlike private long-term care insurance, CLASS doesn't require that participants meet certain good-health requirements before they are enrolled in the plan. That raises the concern that an inordinately high number of people who are in poorer health will enroll in the CLASS plan, Wolf says.

"I can't imagine that it isn't going to face challenges with future rate stability," he says.