Public Long-Term Care Insurance Program
May 2019--- First in the nation, Washington State Governor Jay Inslee has signed into law public state-operated long-term care insurance program.
The act is designed to provide long-term care benefits to those needing assistance with their activities of daily living, such as bathing, dressing, eating, toileting, or help with their medications. As of today, the amount of benefits allocated for these long-term care services is $36,500. Although it is not required, if benefits were dispersed equally over the course of 1 years, this would equate to roughly $100 per day.
How does this compare to the actual costs for care in the State of Washington?
Health Care Average Projected Costs in 2021Home
Home Health Aide $70,066.34 per year
Licensed Practical Nurse (LPN) $333,060.20 per year
Registered Nurse $347,624.29 per year
Assisted Living Facility Average Costs in 2021
One Bedroom Unit $66,244.23 per year
Nursing Home Average Costs in 2021
Semi-Private Room $117,695.47per year
Private Room $132,293.10per year
As you can determine, although $36,500 is a good foundation to build upon, it doesn't nearly cover the actual costs of long-term care services. In fact, you think about chronic illnesses and the need for assistance with activities of daily living, i.e., Alzheimer's Disease, Parkinson's or recovery from a stroke, costs of care for 24 hours per day can become overwhelming to any middle income family.
If you dig into the underlying message from Washington State political leadership, they are telling their residents, "we can help, but as a resident of Washington State, you too need to prepare for when you or someone in you family needs long-term care.?
Yes, the state of Washington is the first in the nation to provide a long-term care benefit to it residents. However, nothing is free and this benefit does come with a cost to the tax payors.
"The benefits initially will be funded with a payroll tax of 0.58 percent on employees, and be available for a very wide range of services. However, the state won’t begin to collect the tax (or premium) until January of 2022, and won’t start paying benefits until 2025." (Forbes)
How Does the Program Work?
PRIVATE LONG-TERM CARE INSURANCE
In contrast to private long-term care insurance, you pay WA Cares Fund premiums only when you are working (not when taking time off for caregiving or after retirement).
No matter what your age or health status, the WA Cares Fund provides affordable long-term care coverage at a predictable cost of 0.58% of your earnings.
Once you’ve met the 10-year vesting period, the benefit will be available when you need it, even if it’s 20 or more years after you retire.
If you need help and you’ve paid in 3 out of the last 6 years, you may also be eligible for benefits.
When you are participating in the WA Cares Fund, you can add additional coverage through private long-term care insurance at any time.
The WA Cares Fund may allow you to reimburse a family member for providing care.
Opting out is permanent
To opt out of the WA Cares Fund, you must:
Apply and be approved for an exemption.
Be at least 18 years of age.
And purchase a private long-term care insurance plan before Nov. 1, 2021.
Employment Security Department (ESD) is developing the process to apply for exemptions. Workers can apply between Oct. 1, 2021 and Dec. 31, 2022.
To find out if a long-term care insurance plan meets the criteria for exemption, see ESD’s proposed rules and (RCW) 48.83.020.
Check the Office of the Insurance Commissioner’s website to learn more about private long-term care insurance in Washington state.
If you opt out, you can’t opt back in. That means you’ll never have access to the WA Cares Fund benefit, which is currently $36,500.