The Legislature has an opportunity to lead the nation by passing the bi-partisan Long-Term Care Trust Act to secure affordable long-term care for Washingtonians. This is an opportunity that we must not miss. The financial security of our state budget and Washington’s families are at stake.
Aging comes with many challenges. The cost of long-term care is an often-unanticipated challenge many families face. Most people do not understand that Medicare does not cover long-term care costs, and 95 percent of adults are uncovered by costly private insurance.
The average annual cost of long-term care can be $75,000. Most families are unable to afford care without enormous sacrifices, such as depleting their retirement savings or selling their homes. These circumstances may force people into poverty. This situation will only worsen as the aging population booms.
Private citizens are not the only ones at risk. If we do nothing, our state’s Medicaid long-term care spending is projected to nearly double to $4.1 billion per year by 2040.
The Long-Term Care Trust Act expands the Paid Family and Medical Leave program to cover long-term care benefits. People would contribute small amounts over the course of decades to gain relief from expensive bills at the moment they need care.
Every individual who contributes and vests would be eligible for up to $36,500 to cover long-term care needs over their life. The benefit could be used on many services, including in-home care, facility care, respite, wheelchair ramps, meals on wheels, or rides to the doctor. While $36,500 won’t cover everyone’s entire cost of care, the Medicaid program will still be available as a backstop.
By helping people pay for initial care before they impoverish themselves to receive Medicaid, the Trust Act is projected to save Washington taxpayers $19 million in the first year of operation (2022), $470 million in 2052 and have a cumulative savings of more than $3.9 billion by 2052.
The benefit would be funded by a modest payroll fee, similar to social security and unemployment insurance. The fee proposed is just more than one half of 1 percent, or 58 cents for every $100 in income. Expert actuarial analysis shows this proposal would significantly increase long-term care coverage, benefiting almost all Washingtonians who contribute. People who are retired now would not be part of the program.
Another benefit of the Trust Act’s expansion of long-term care coverage is an expected boost to the private long-term care insurance market. By expanding coverage to almost all Washingtonians, wrap-a-round supplemental plans become more feasible to underwrite.
State lawmakers have a choice. Lead the nation to help families prepare financially for their long-term care costs and protect the state from ballooning Medicaid costs, or continue to force people into poverty to meet their family’s care needs. The legislature should pass the Long-Term Care Trust Act. It is the smart and just choice for our elders and their families.