A first-in-the-nation state long-term care insurance program is likely to become law within a few weeks. In Washington State, both houses of the legislature have approved the measure, though they must resolve relatively minor differences between the two bills. Gov. Jay Inslee has promised to sign it.
Washington would be the first state in the US to enact a public long-term care insurance program, though several other jurisdictions are considering such plans. Hawaii has provided a public cash benefit for family caregivers of frail older adults, though it is not really an insurance program. California is considering a ballot initiative on a public long-term care financing program, Michigan and Illinois are studying public programs for those not on Medicaid, and Minnesota has proposed two alternative private financing options for long-term care.
The idea is not universally popular, however. Last year, Maine voters rejected a public plan to help fund home care.
$36,500 in benefits
The Washington initiative would provide up to $36,500 to pay for a broad range of long-term supports and services, such as personal care aides, home modifications, or nursing home or assisted living costs. Called the Long-Term Supports and Services Trust Program, it would be funded through a 0.58 percent tax on employee wages starting in 2022.
Participants would be eligible for benefits once they need assistance with at least three activities of daily living (ADLs), which Washington defines more broadly than private insurance (which usually triggers benefits when someone requires help with two ADLs). The state would reimburse providers directly. Family caregivers could be paid, though they first would have to go through a training program. Benefits would be available starting in 2025.
A participant must work and pay the premium/payroll tax for at least 10 years, with at least five uninterrupted, or three of the last six years. Thus, most current retirees would be ineligible for the program.
Washington State is choosing a front-end insurance model that could begin to cover benefits as soon as participants have a need. It would cover the most people, though its benefit would pay only a small fraction of the costs for someone who needs several years of care. An alternative model, called a catastrophic or back-end design, would require participants to pay for the first years of care, but provide lifetime coverage after that. It would cover fewer people than a front-end plan but would focus on those with the greatest need.
At a recent industry conference, private long-term care insurance carriers expressed some interest in developing products to supplement Washington’s relatively limited state coverage.
The Washington plan easily passed the state House 63-33. The Senate vote was closer, 26-22, with most Republicans opposing the measure.
Public long-term care insurance is widely available throughout the developed world. Efforts to enact a federal program have made little progress in recent years, though last year Rep. Frank Pallone (D-NJ) proposed a universal public back-end plan. However, Pallone, who now chairs the House Energy & Commerce Committee, appears more focused on health care these days.
The Washington State model would be an important experiment, and it could create momentum for other states to adopt long-term care insurance programs.