Long-Term Care Victory a First

By Chris Thomas

Imagine having 58 cents deducted from your paycheck for every $100 of income and placed into a secure, state-administered fund that you could tap into later in life to help pay for your own care.

That’s the key element of Washington’s Long-Term Care Trust Act, which Gov. Jay Inslee (D) signed in May. It will be the nation’s first state-run long-term care insurance program.

In the years of discussion leading to passage of the legislation, AARP Washington strongly backed the plan, with compelling research about the lack of adequate retirement savings in the face of soaring health and long-term care costs.

“We wanted to create a benefit that has meaning and lets workers decide how and where they want to age,” explained Cathy MacCaul, AARP Washington’s advocacy director.

The payroll deductions are set to begin in 2022, and the first benefits will be paid out in 2025. The money can be used for a wide range of services, including adaptive equipment; in-home, assisted living and nursing home care; transportation; and compensation for family caregivers.

Leading on care

The benefit’s first-year cap of $36,500 initially raised eyebrows. In a state where the median monthly cost of assisted living is $5,135 and nursing-home care is $8,669 to $9,718, how far can that amount go?

“With home modifications or bringing in some help a few hours a week, $36,500 can cover much more than one would think. And it can delay the need for other, more expensive care,” said Dan Murphy, executive director of the Northwest Regional Council, part of the state’s network of Area Agencies on Aging.

Employees will be vested after working at least 500 hours a year in three of the previous six years, or 10 years without a consecutive break of longer than five years.

The benefit won’t be transferable or portable to other states. Self-employed workers can opt in, and those with private long-term care insurance can opt out. Protections were written into the law to prevent future legislative attempts to defund it.

Washington is likely better prepared than some other states to undertake this challenge. It already has a payroll-deduction mechanism in place for Paid Family and Medical Leave, which begins paying benefits next year.

And in 2017 the state topped an AARP-sponsored Long-Term Services and Supports Scorecard, in part for its robust system of care settings and providers.

“We’re very proud to be a state that’s leading in this way and an early adopter of rebalancing care options,” said Bea Rector, a director in the Aging and Long-Term Support Administration of the state Department of Social and Health Services.

She points out that the program will still leave Washingtonians with options. While it will cover long-term care needs for some, others will spend down their assets to qualify for Medicaid or have private resources to pay for care.

“This will be one more tool,” added Murphy. “When it’s developed, this will be the first place people turn to meet their long-term care needs. That’s a win for everybody, including the state-budget writers.”

The Long-Term Care Trust Act is projected to save the state $34 million annually in Medicaid costs by 2025 and $470 million annually by 2052.

Chris Thomas is a writer living in Seattle.