Do You Need Long-Term Care Insurance?

Individuals in the United States are not prepared for costs associated with aging and long-term care.

Long-term care insurance helps cover the costs of care when an individual who has a chronic medical condition, a disability, or a disorder such as Alzheimer's disease. Long term care can include longer stays in facilities such as a nursing home or home health care.

While people are more focused on having health insurance or dental insurance, many don’t realize that long-term care is not covered by most health insurance plans. So, most people don’t proactively buy long-term care insurance. And, once you have a pre-existing medical condition it is very difficult to qualify for coverage.

In order to address the gap in coverage, Washington state is changing the landscape for the aging population by creating a state program to help offset the costs of long-term care. In May 2019, the The Long-Term Care Trust Act was officially signed into law.

This program creates an insurance benefit for those who pay into the program, with a lifetime maximum of $36,500 per person (indexed to inflation).

What’s in the proposal?

  • Premiums of 0.58 % of wages would start being collected from employees on Jan. 1, 2022.
  • Employers are not required to pay into the program.
  • Starting January 1, 2025, people who need assistance with at least three “activities of daily living” such as bathing, dressing, or administration of medication, could use the fund to pay for things like in-home care, home modifications like a wheelchair ramp, and rides to the doctor. The benefit also covers home-delivered meals, and reimbursement to unpaid family caregivers.
  • Individuals who are self-employed can choose to pay into the system, but are not required to.
  • Workers who already have long-term care insurance also do not have to pay into the system
  • To be eligible, workers have to pay into the system, working at least 500 hours per year for three of the previous six years in which they're seeking the benefit, or for a total of 10 years, with at least five of those paid without interruption

How does Washington’s proposal compare to other state’s initiatives?

A handful of states are also considering long-term care solutions:

  • Michigan, Minnesota, and Illinois have been brainstorming ways to make long-term care coverage more accessible.
  • In California, we could see a long-term financing plan as a ballot proposition in an upcoming election.
  • Hawaii is advocating for adopting a public cash benefit for caregivers.

Looking for other resources on aging or insurance?

Read our blog, which often includes topics on aging, or you can visit our Resourcepage, where you will find helpful information on topics such as Health Insurance, Disability Insurance, and Medical Care.

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