Despite the growing recognition that a significantly larger aging population will be with us for a while, the Federal Government has failed to come up with an answer for any kind of public long term care insurance besides Medicaid. Medicaid will pay for long term care in facilities only after basically your last dollar is spent, then you qualify to get on a long waiting list. The prospect of this fund being overwhelmed is closer than we think.
The private insurance market has failed as it it too expensive (up to 3000 dollars a month for one person) and the benefit limits are getting tighter. You could pay for a policy over many years then outlive the 3 year or maximum pay out window. Where are you then, back in line for a Medicaid bed. They are not writing open ended policies anymore. Only 7 million seniors even have LTC private insurance.
The general consensus is that mandatory payroll deductions for LTC insurance would be politically lethal. Voluntary enrollment is not enough for the numbers to be robust for it to work. It had been tried before as part of the Affordable Care act but never totally enacted. Maybe, just maybe the political climate is changing enough that purple states like Washington can at least offer another solution.
Enter this week, Governor Jay Inslee signed the Long Tern Care Trust Act. A payroll tax of 58 cents on every 100 dollars of income will start in 2022. For the average wage earner that is only $18 a year. They will start pay outs to current employees and retirees in 2025. When fully funded , after ten years of paying in, a lifetime maximum of $36,000 can be utilized to pay for a broad range of services in home care, making a home accessible or of course time spent in a facility.
That amount would not cover more than a few months of either assisted living or nursing home care. It is intended to used by resourceful relatives and caregivers to keep seniors at home and out of facilities. Even at this level, these funds may make the difference between comfort and safety at home and a care giving nightmare.
Now understand Washington state already has the distinction of being number one in terms of long term services to seniors and has been geared towards a quality of care.
See where your state ranks: http://www.longtermscorecard.org/2017-scorecard
We are learning more and more about the have and have not states when it comes to quality and forethought for senior’s needs. There are the states that believe in safety nets and those that believe you are the maker of your own destiny and you will have to live with that. But at least we can point to the purple experiment out there on the west coast and hope for a better outcome.