Washington workers to pay into fund to help with long-term care

May 14, 2019

OLYMPIA – By the middle of the next decade, Washington workers should be eligible to draw money from a special fund to help with the expense of long-term care at home or in a nursing facility through a new state program that supporters say is the first in the nation.

Starting in 2022, workers in the state will pay into the Long-Term Trust Program account through a premium based on 0.58% of their wages. By 2025, when those benefits are available, they’ll be able to receive up to $36,500 in “benefit units” to assist with a wide range of daily living services.

Over the next 10 years, the state estimates the trust fund will collect some $8 billion to help with the costs that can include adult day services, memory care, respite for family caregivers and home-delivered meals.

Gov. Jay Inslee, who was surrounded by legislative sponsors and supporters Monday afternoon as he signed the bill, called it and a separate bill setting up Cascade Care, a public option for health insurance, a historic occasion.

“Washington is leading the nation in a brighter way to provide for the health and security of our families,” Inslee said. The bills represent a “bold leap forward that I believe can be a template for the United States.”

Although an estimated 7 out of every 10 people who reach age 65 will need some type of long-term care in their life, it is not covered by Medicare.

Private long-term care policies have become increasingly expensive and restrictive in their benefits. Many long-term care services are not covered by Medicaid, a joint federal and state program, until a person drops below a certain level of income.

“People will no longer have to spend themselves into poverty in order to get care,” said Rep. Laurie Jinkins, D-Tacoma, the prime sponsor of the bill.

Sen. Guy Palumbo, D-Maltby, sponsor of a companion bill in the Senate, called the new system “morally right and fiscally responsible.” Some 90% of Washington residents don’t have long-term care coverage, he said.

“We’re trying to do the right thing and make sure they can age with dignity,” Palumbo said.

Washington residents will qualify for the program either by working three years in the previous six or working for 10 years with at least five without interruption. For a year to count toward a beneficiary’s qualification, he or she will have to have worked at least 500 hours that year. An employee with proof of having long-term care insurance can be exempt from the assessment.

In 2025, a person who the Department of Social and Health Services determines needs assistance with at least three “activities of daily living” can receive benefits in units of $100 each to help pay for approved services. The beneficiary can receive as many as 365 units, or a total of $36,500 in a lifetime. The benefit units and maximums can be adjusted for inflation by a special commission, with the state actuary responsible for making sure the fund stays solvent.

A resident of Idaho who works in Washington will pay that 0.58% assessment on wages, but will not be eligible to draw from the account if they remain in Idaho or unless Idaho sets up a similar program with reciprocal benefits, Jinkins said. Neither will people who move into Washington after retiring who haven’t paid into the fund.

Actuaries who studied the plan said the fund as a stand-alone program would not maintain solvency by expanding beyond Washington residents, Jinkins said. But the hope is other states will develop similar programs, and at some point a nationwide system providing help with long-term care costs, she said.