So, let’s start right there — where legislators are starting and where we each need to begin when considering our long-term care solutions:
- 70% of us will require long-term care in our lifetimes … while only 10% of us have long-term care insurance to pay for it.
- Long-term care knows no age; in fact, of those who receive care, 44% are age 65 and younger.
- The average lifetime cost of care as of 2022 ranged from $166,860 to $267,976.
- Health insurance, Medicare and disability insurance will not pay for long-term care.
- Medicaid can help cover long-term care costs after an individual has depleted or “spent down” their assets to the poverty level.
There are several options for paying for long-term care expenses, such as:
- Public long-term care plans: As these roll-out, there’s likely to be a gap in coverage between the average amounts needed and the state plan maximum coverage numbers. Long-term care insurance is a good option to close that gap.
- Self-Fund: Knowing the likelihood of needing care — and its cost — planning to self-fund by saving adequately is an option.
- Long-term care insurance: An affordable and effective option to cover costs.
- Retirement funds: Individuals may need their retirement wealth to pay for long-term care.
- Medicaid: After spending-down assets to the poverty level, individuals may qualify for assistance through state Medicaid programs.
- Relying on family: For generations, family members have cared for each other and shared expenses for long-term care needs.
WHY OFFER A GROUP LONG-TERM CARE BENEFIT TO YOUR EMPLOYEES?
Employer group plans may offer options that individuals cannot obtain on their own:
- One-time guaranteed issue at initial enrollment
- Portable benefit
- Issue age rates — remains the same as you age
LONG-TERM CARE LEGISLATION
In 2019, Washington state established the Washington Cares Fund, the nation’s first publicly funded long-term care benefit, to address the long-term care crisis posed by an aging population. The program is funded by an employee payroll tax of 0.58% on W2 workers.
This sparked a national conversation about the need for long-term care planning as state Medicaid systems struggle to cover the 70% of Americans that will need long-term care in their lifetimes — only 10% of whom have insurance that will pay for it. About 20 other states have followed suit and are in various stages of evaluating public long-term care programs of their own.
Washington state allowed a six-month opt-out window in which individuals were able to obtain qualifying long-term care insurance plans of their own.
Join ALA VIP Business Partner LTC Solutions as they discuss the latest on long-term care legislation. There are two sessions available: June 13 at 9 a.m. Pacific and June 21 at 11 a.m. Pacific. Click here to register now.
