New law will ease burden of future long-term care needs

Many of us don’t think about or plan for long-term care until a crisis strikes or urgency forces our hand. Thankfully, a new benefit to help Washington families pay for care during a long-term illness, injury or disability is on the horizon. 

Seventy percent of Washingtonians 65 and older will require some assistance to live independently as they age. Yet, only 9% of people in Washington can afford private insurance, and that market has been shrinking even as the older adult population increases. Our long-term care system needs continual improvement, and affordability remains a significant issue.

Underwriting requirements for private long-term care insurance often penalize people with pre-existing conditions or disabilities who may have to pay more or may not be able to get insurance at all.

Some mistakenly believe that Medicare will help pay for costs. However, Medicare does not cover extended long-term care, which means most people must spend down their life savings. Once people are impoverished, Medicaid pays for long-term supports and services.

To help tackle this problem, as well as the risk of overwhelming the state’s Medicaid program, Washington passed legislation to create a first-in-the-nation public program in 2019 called WA Cares. The new program provides flexible and meaningful benefits ensuring families can choose the care setting and services that best meet their needs. 

Beginning January 2022, Washington workers will contribute 58 cents per $100 of earnings from each paycheck, like contributions for Social Security. For a worker in Washington with a median salary of $107,023, the annual premium is $620.73. Employees only pay into the fund during their working years and will not have to worry about losing coverage if they change employers, lose their job or retire.

Beginning January 2025, each person eligible to receive the benefit can access services and supports costing up to $36,500, adjusted with inflation, to help live independently, including help with personal care, medical assistance, transportation, meals, and more. More importantly, the benefit can be used to pay family caregivers.

For some families, the WA Cares benefit may be all the help they need. The fund can offer them the time and resources to figure out a long-term plan for those who need extended care. It provides predictable coverage, regardless of pre-existing conditions, offering consumers a way to pay for long-term services while easing the anxiety families may face in providing or receiving ongoing care.

Here’s what workers need to know about what comes next:

  • The new payroll deduction begins Jan. 1, 2022.
  • No action is required for employees to be enrolled.
  • Self-employed people have until Jan. 1, 2025, to opt-in or within three years of becoming self-employed.

The program does have an “opt-out” provision. If you own a qualifying private insurance policy before Nov. 1, you can inform your employer and provide evidence that you are eligible to opt-out of the new premium. However, if you opt out of the benefit, you cannot opt back in. Current retirees do not pay premiums into the fund and are not eligible to receive benefits.

The vast majority of older adults would like to live with independence in their homes and communities with the care they want and need for as long as possible. Crafting a viable and robust program like the WA Cares fund to help Washingtonians better prepare for their long-term care needs is critically important for our families and our state.

Learn more about the Fund at wacaresfund.wa.gov.

Cathy MacCaul is the advocacy director for AARP Washington.

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