Patricia Keys, 71 and a stroke survivor, needs help with many daily activities, such as getting dressed and bathing. Her daughter Christina, who lives near her mother in Vancouver, Washington, cares for her in the evenings and pays around $3,000 a month for help from other caregivers.
Christina Keys, 53, was thrilled three years ago when Washington state died a first national law which created a long-term care benefit for residents who contributed to a state fund. She hoped it would be a resource for others facing similar challenges.
The benefit, which has a lifetime limit of $36,500, would have made a big difference in the first year after her mother’s stroke, Keys said. Her mother needed a ramp built and other modifications to her home, as well as a wheelchair and a hospital bed. The extra money could also have made it easier for Keys to hire caregivers. Instead, she gave up her tech sales job to take care of her mother.
“People are under this cloud of delirium that between your insurance and your retirement [income] everything will be fine,” she said. “They don’t understand anything that insurance doesn’t cover.”
But relief for Washington families will have to wait. the WA Cares Fund, which was supposed to start raising money for the program with a mandatory payroll tax for workers in January, was delayed while lawmakers made adjustments during the current legislative session. Payroll deductions will begin in July 2023 and benefits will be available in July 2026.
Other states are watching Washington closely as they consider offering coverage to their own residents. In California, a task force is examining how to design and implement a long-term care program, according to the National Conference of State Legislatures. Illinois and Michigan are also studying the matter, according to the NCSL.
Proponents of the Washington program say it just needed tweaking and note that social programs like Medicare and the Affordable Care Act have also been changed. The long-term solvency of the program, however, is in doubt, and the cost to workers who join the program is questioned.
What is clear is that meeting long-term care needs is extremely important. On 70% of people who reach 65 will require certain types of long-term care services. Many will need help like a home assistant, while others could face staying in a nursing home, which costs more than $90,000 a year on average. But many don’t have good options to cover expenses. Medicare coverage is very limited, while Medicaid generally requires people to get poor before they pick up the bill. Private long term care insurance is unaffordable for most people.
The result: Many people rely on unpaid family members to help with medical care, as well as daily activities like bathing and dressing.
The problem is getting much worse. The number of people aged 85 and over is projected more than double in the next 20 years, as the number of Americans living with Alzheimer’s disease and related dementias is also expected to double, at 13 million.
The federal Community Living Assistance and Support Services Act (CLASS Act), which was part of the Affordable Care Act, created a voluntary program to purchase long-term care, but it does not was never implemented for fear that it would be financially sound. . Since then, policymakers in Washington, DC, have had little appetite for solving the problem.
“We don’t have a solution at the federal level, so the states are in charge of experimenting with solutions,” said Bonnie Burnsconsultant for California Health Advocates and long-term care expert who was appointed to a Washington State committee to help develop a long-term care supplemental insurance product to be offered alongside the state benefit .
The Washington state program’s maximum benefit is intended to cover one year of home care at 20 hours a week, program director Benjamin Veghte said.
Although wealthy people can probably afford to pay for their care and poorer families are eligible for Medicaid, middle-class families could burn through their savings trying to cover those bills.
“It doesn’t solve all the problems, but with a modest premium and a modest benefit, it alleviates the problem for families,” Veghte said. It could also give some families time to “maybe they can come up with a plan” for long-term care needs after their benefits expire, he added.
Although the law was passed in 2019, it remained under many people’s radars until mandatory payroll deduction approached. Workers were subject to a tax of 0.58% per $100 of income. For someone earning $52,000 a year, the deduction would be equals $302 per year, according to state estimates. When people realized they were about to have to start contributing to the program, some pushed back.
Workers could get an exemption if they had private long-term care insurance, and thousands of people rushed for that coverage before the Nov. 1, 2021 opt-out deadline. Many employers in the state were quick to offered workers the possibility of subscribing to private plans.
Because the withholding for the benefit is not capped based on income, wealthier people may be better off with private long-term care insurance, if they can pass the insurer’s medical evaluation.
“We had a fair number of younger, higher-earning people who wanted to take out policies,” said Gary Brooks, a certified financial planner who is co-owner of BHJ Wealth Advisors in Gig Harbor, Washington.
Last month, 473,000 workers had accepted the unique offer to withdraw from the program.
Other people objected because they would have to contribute to the system, but would not benefit from it. These included people who work in Washington but live in a neighboring state, military spouses who are unlikely to make Washington a permanent home, people planning to retire before the three years required to qualify for benefits and some workers on temporary visas. The commission overseeing the long-term care program estimated that the number of people in these groups eligible for withdrawal is around 264,000.
In January, Governor Jay Inslee signed legislation who have addressed many of these issues. It allows certain groups to opt out and those close to retirement to receive partial benefits based on the number of years they have contributed to the program.
Another group — those planning to retire elsewhere — has not been addressed, but the state is developing recommendations for the legislature, Veghte said. According to current actuarial projections, 3.1 million workers will start contributing to the program next year, out of a total of 3.6 million, Veghte said.
Some critics worry that allowing more people to opt out of the program will put it on an increasingly precarious financial footing.
“The solvency problem is becoming more and more important,” said Richard Birminghampartner at Davis Wright Tremaine in Seattle, which represents employers and workers in a class action which claims that the law violates federal and state laws governing employee benefit plans. “Any change they make further increases the cost.”
Supporters are sponsoring a ballot initiative that they say would help bolster the program’s assets by allowing program funds to be invested in a diversified portfolio rather than fixed income investments. This initiative “will probably eventually” pass, Veghte said, even if it fell through in 2020.
While postponing the program isn’t ideal for the thousands of people who could benefit from the new program in the short term, consumer advocates are taking it in stride.
“We know that as the first state to do this, it may not be perfect,” said Jessica Gomez, leader of the Washingtonians for a Responsible Future coalition, which represents community groups for aging populations. and disabled. “It may need to be fixed, but we will fix the issues and move on.”
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. Along with policy analysis and polling, KHN is one of the three main operating programs of KFF (Kaiser Family Foundation). KFF is an endowed non-profit organization providing information on health issues to the nation.
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