Washington State’s Public Option for Long-Term Care Costs — What It Means for Aging in Place

As long-term care costs continue to climb, with home care and assisted living expenses rising dramatically, families across the country are searching for better ways to protect their savings and help loved ones remain at home. Washington State has launched a pioneering public program that offers a new tool in that fight: the WA Cares Fund, the nation’s first state-run long-term care insurance program.  I first discussed this option in my 2019 article, "Washington State May Be First State With Payroll-Funded Long Term Care Insurance Benefit."

What Is WA Cares?
Enacted in 2019 and beginning to pay benefits in 2026, the program is funded by a modest payroll tax (currently 0.58%) on Washington workers. Qualifying residents can receive a lifetime benefit (up to approximately $36,500, adjusted for inflation) to help cover a wide range of long-term care needs, including:

• In-home personal care
• Adult day care
• Assisted living
• Nursing home care
• Other supports that help people remain independent.

Importantly, these benefits can be used to pay family caregivers in many situations, providing real support for the unpaid family members who do the majority of caregiving in America.Why This Matters for Aging in Place
For those of us who advise families on staying in their homes as long as possible, programs like WA Cares are encouraging because they:

• Reduce the financial pressure that often forces premature institutionalization.
• Provide a baseline of support that can be combined with private savings, long-term care insurance, or Medicaid planning.
• Recognize the value of home- and community-based services rather than defaulting to nursing home care.

However, the benefit cap means most people will still need additional planning. A $36,500 lifetime benefit is helpful but, for example,  will not cover years of 24/7 care. Lessons for Families Everywhere
Even if you don’t live in Washington, this development is worth watching. Several other states are studying similar programs, highlighting the growing recognition that the current reliance on Medicaid spend-downs and family sacrifice is unsustainable.
Proactive steps you should take:

• Understand Your State’s Landscape: Know what public programs (if any) exist and their limitations.

• Layer Protections:  Deploy long-term care insurance, short- and long-term disability plans.   If you purchase annuities or life insurance, look for those that offer bonuses, benefit acceleration, or a waiver of surrender fees.   If you or your spouse is a veteran, investigate eligibility for the Aid and Attendance Benefit, a non-service disability pension available to vets who served during wartime (even if they never served in combat or overseas).   Shop Medicare Advantage Plans for home care and/or disability benefits.  Don't forget to consider Medicaid Asset Protection Trusts (MAPTs), hybrid life/long-term care policies, and proper asset titling.

• Plan for home care explicitly:  Document preferences for aging in place in advance directives, designate caregivers, and build a realistic budget that accounts for gaps in public coverage.

• Review powers of attorney and trusts: Ensure documents are robust enough to handle long-term care coordination and asset protection.

The Bottom Line
Washington’s WA Cares Fund is an innovative step forward, a public option that can ease the burden on middle-class families without requiring complete asset depletion. It won’t solve every problem, but it reminds us that creative solutions are possible and that waiting until a crisis hits is far more expensive than planning ahead.
If you’re concerned about how long-term care could affect your family’s ability to age in place, now is the time to act. A comprehensive plan tailored to your state’s rules and your family’s needs can provide peace of mind and preserve dignity and independence.

Washington State May Be First Sate With Payroll-Funded Long Term Care Insurance Benefit.

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Numerous states are considering proposals to create a long-term care insurance programs, many funded by a payroll tax. Washington may be the first to actually enact a plan. Both the Washington State House and Senate have passed legislation, so all that’s required is a House re-vote on a Senate package that differs slightly from the House version. 

The Senate tweaked a few aspects of a proposal passed earlier by the House, so approval appears all but assured. The governor, provider associations and many others have  supported the measure, which would cap the lifetime benefit maximum at $36,500 per person. The governor has promised to sign the bill when presented. 

MyNorthwest reported in an article the sponsor's statements supporting the legislation:

"Democratic State Rep. Laurie Jinkins has introduced the Long Term Care Trust Act, which she says would work similarly to unemployment.  'What we do is create, essentially an insurance program where folks pay a premium of 0.58 of a percent, so 58 cents of every hundred dollars they earn would go into the trust. In return, any time they needed long-term care they’d be able to draw on that,' Jinkins explained. 

Workers of all ages would pay into the program, at a cost of around $24 a month for someone earning $50,000 a year.

That creates a benefit of roughly $37,000 over a person’s lifetime they could take in units of $100.

“That amount of money, for example, would pay for 25 hours a week of in-home care over the course of a year, respite care for one of your family members who was getting care; it would pay for that for maybe five years. So, it’s a pretty significant benefit for people,” Jinkins said.

Providers could start collecting payment from the program beginning in January 2025. The measure covers traditional long-term care services for people needing help with at least three activities of daily living (ADLs), as well as things like in-home care and meal delivery, rides to the doctor, home modifications such as wheelchair ramps, and reimbursements to unpaid family caregivers.  Washington defines more broadly ADLs than does 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. 

Premiums of 0.58% of wages would begin being withheld from employees’ checks starting in 2022. Someone earning $50,000 per year would pay a premium of about $24 per month, or $288 per year. Under the Senate version, individuals holding long-term care insurance policies would be exempt.

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.  

Provider and consumer groups testified in favor of The Long Term Care Trust Act, and nobody testified against it, at a House Health & Wellness Committee hearing in January. Experts say 60 percent of us will need long-term care or support of some sort after we hit 65.

In a House committee hearing,  Dan Murphy, executive director of the Northwest Regional Council explained who the insurance would benefit:

“People need long-term care when they can no longer do basic things themselves. Things like bathing, dressing, getting out of a chair, a bed getting into a car, managing their medications or just even standing, walking around. That’s what we’re really talking about in the assistance lift, when folks can’t any longer do things for themselves.”

An outside study authorized by the Legislature back in 2015 found there is a significant need, with seven of 10 people over 65 years old expected to need this type of care.

Of course the program also benefits the State of Washington.  An outside study found the program would lead to big savings for Medicaid over time, close to $900 million in the 2051-53 biennium.

According to an article in Forbes, although Washington is the first state in the US to enact a public long-term care insurance program other states are considering similar legislation.  "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."  Forbes notes,  though, that the "idea is not universally popular, however. Last year, Maine voters rejected a public plan to help fund home care."

According to Forbes, 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."

The Forbes article concludes that "[t]he Washington State model would be an important experiment, and it could create momentum for other states to adopt long-term care insurance programs."