Long-Term Care Trust Act
The Challenge of Financing Long-Term Care (LTC)
Broken Insurance Market
- Over 90% of adults are uninsured for LTC – plans are too expensive for most individuals, and those with pre-existing conditions can be denied coverage -1
- Neither health insurance nor Medicare pay for LTC -2
- Most seniors must spend their life savings down to poverty in order to qualify for Medicaid LTC coverage
- Over 60,000 Washingtonians rely on LTC provided by the state. This need is projected to nearly double by the year 2040 -3
- 70% of Washingtonians over the age of 65 will require some type of LTC as they age -4
Unpaid Family Caregivers
- The state’s 850,000 unpaid family caregivers provide about $11 billion worth of care annually -5
- Due to demographic changes, the supply of potential family caregivers is projected to decrease by 43% by 2030 -6
- Medicaid LTC currently makes up 6% of Washington’s entire state budget and is projected to double by 2030 -7
- With declining numbers of family caregivers, there could be up to $6.3 billion in additional LTC costs to families and the state by 2030
The State hired Milliman actuaries to study two policy reforms to help make long-term care more accessible and affordable: a public benefit trust similar to Social Security, paid into by all workers, or a public private solution to help stabilize the existing private market. Milliman found the public benefit would have significant and broad impact on both family and state budgets. They also found that any attempts to revive the private market would require large state subsidies and risk-sharing, without significant increases in LTC insurance coverage amongst the population.
- Benefit is open to all workers over the age of 18
- $100 per day maximum benefit reimbursed to providers
- 365 days-worth of benefits, can be used consecutively or non-consecutively
- Benefit can be used on services by any certified provider or choice of setting – including in-home care aides, adult family homes, assisted living, or skilled nursing facilities
- Financed by a 0.49% payroll deduction on all workers
- Vesting period of 3 of the last 6 years or 10 years total
- Individuals who move from the state still have access to the benefit for up to 5 years after moving
Impacts of the LTC Trust Act
- Relieves strain on Medicaid budget, and will protect other budget priorities such as education spending
- Prevents seniors from spending their life savings down to poverty to access Medicaid
- Protects families from some of the financial impacts family caregiving duties
- Increases business productivity by reducing the number of family caregivers who must take time off work or quit paid employment entirely
- Provides a layer of financial protection for seniors in the face of uncertainty regarding Social Security, Medicare, and Medicaid policy
- The private LTC insurance market is currently failing, but a new LTC Trust could spur new LTC wrap market, similar to what happened with Medicare and gap plans
Public and Organizational Support for the LTC Trust Act
- The LTC Trust Act has broad organizational support from major senior organizations, including AARP, Alzheimer’s Association, Washington Health Care Association, SEIU 775, Washington Association of Area Agencies on Aging (W4A), Senior Citizens’ Lobby, LeadingAge Washington, the Long-term Care Ombudsman Program, and many others.
- A recent statewide poll found that after hearing details of the legislation 62% of likely voters support the LTC Act.
What you can do to help
1 Robert Wood Johnson Foundation. (2014). Long-term Care: What are the Issues?
2 U.S. Department of Health & Human Services. National Clearinghouse for Long-Term Care Information. http://longtermcare.gov/the-basics/who- pays-for- long-term- care/
3 Kettel, J. (2013, September 9). DSHS: Long Term Care Presentation to the Joint Legislative Executive Committee on Planning for Aging and Disability Issues.
4 U.S. Department of Health & Human Services. National Clearinghouse for Long-Term Care Information. http://longtermcare.gov/the-basics/who- needs-care/
5 AARP Public Policy Institute. (2015). Valuing the Invaluable: 2015 Update
6 Redfoot, D., Feingberg, L., & Houser, A. (2013). The Aging of the Baby Boom and the Growing Care Gap: A Look at Future Declines in the Availability of Family Caregivers
(No. 85). AARP Public Policy Institute.
7 Kettel, J. (2013, September 9). DSHS: Long Term Care Presentation to the Joint Legislative Executive Committee on Planning for Aging and Disability Issues.