Long-Term Care Trust Act
Affordable Long-Term Care for Washington
Most people will need long-term care during their lives.
- Most Washingtonians over 65 will eventually need long-term care services, including help with bathing, dressing, toileting, and eating.[i]
Long-term care is the biggest financial risk most people face during their lives. Most people are unable to afford the long-term care they need.
- Median retirement savings for people over 65 is just $148,000[ii] while the lifetime cost of care averages $260,000.[iii]
- Medicare covers only limited long-term care for skilled nursing care or rehabilitation, leaving most people uninsured for their long-term care needs.
- The private LTC Insurance market is broken – 90% of adults are uninsured and there are increasingly limited options and expensive plans.
Doing nothing will impoverish families and our State’s Medicaid budget.
- Unless we act, Washington’s spending on Medicaid-funded long-term care will skyrocket up 91% to 4.01 billion per year. [iv]
- Without action, countless more middle-class families will be forced to spend down their life savings to pay for care. Once impoverished, they can then access long-term care through the Medicaid program.
- Over 850,000 Washingtonians provide unpaid caregiving to a family member. Nationally, family caregivers spend an average of 20 percent of their income on out-of-pocket costs related to caregiving.[v] To provide this care, many caregivers quit or reduce time at their jobs and lose income, social security credits or other benefits like health insurance.
The Long-Term Care Trust Act would create a public long-term care benefit for Washingtonians.
- The Long-Term Care Trust Act would set up a new benefit that allows people to contribute a little bit over the course of decades to gain relief from expensive bills at the moment they need care.
- The benefit could be utilized in part or as a whole covering long-term care needs over months, years or even decades.
- The Long-Term Care Trust Act is projected to save Washington taxpayers $19 million in the first year of operation (2022), $368 million in 2050 and have a net savings of over $3.9 billion by 2052 by helping people pay for care before they impoverish themselves to receive Medicaid.
- The benefit maximum is $36,500, indexed to inflation, which will make a significant difference in helping people preserve their savings, while paying for essential long-term care services.
- Families would get to decide how to spend their benefit, which could pay for in-home care, nursing home care, and other approved long-term care services and supports like respite, a wheelchair ramp, meals on wheels or rides to the doctor.
How people would qualify:
- The benefit would be funded through a monthly payroll fee of just over one half of one percent – 58 cents for every hundred dollars in income – which means someone earning $50,000 a year would pay about $24 dollars a month.
- All workers would contribute to the trust. However, those covered by other long-term care insurance could opt out of the program when it starts up.
- Individuals currently retired or out of the work force would not pay into the system and would not be eligible for the benefit.
- To qualify for the benefit, workers would pay into the fund for a minimum of ten years. There is also a safeguard for unexpected crises, allowing people to use the benefit if they have paid in three of the previous six years.
- People become eligible to use the benefit at the time they need help with multiple activities of daily living like bathing, dressing, using the toilet and getting in and out of bed.
The bottom line:
The Long-Term Care Trust Act would reduce the biggest uninsured risk we now face. It will help protect future taxpayers from the cost of long-term care, both to their families and to the state budget. Most of all, it would give families the security of knowing they will get the care they need when they need it most without the added stress of how to pay for it.
Washingtonians for a Responsible Future is a broad-based coalition of aging and disability advocates, businesses, long-term care providers, labor, consumer rights organizations, and families working to start this important conversation.
[i] Favreault, M. (2016). Long-Term Services and Supports for Older Americans: Risks and Financing. U.S. Department of Health and Human Services, Office of the Assistant Secretary of Planning and Evaluation. Retrieved from https://aspe.hhs.gov/basic-report/long-term-services-and-supports-older-americans-risks-and-financing-research-brief
[ii] Government Accountability Office. (2015). Most Households Approaching Retirement Have Low Savings (No. GAO-15-419). Washington D.C. Retrieved from https://www.gao.gov/products/GAO-15-419
[iii] Ibid
[iv] Report to the Legislature. Feasibility Study of Policy Options to Finance Long-Term Services and Supports (p. 7, Rep.). (2017). Olympia, WA: Aging and Long-Term Services Administration (DSHS).
[v] Rainville, C., Skufca, L., & Mehegan, L. (2016). Family Caregiving and Out-of-Pocket Costs: 2016 Report (p. 7, Rep.). Washington D.C.: AARP.