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The Facts on Long-Term Care

These are the facts: The need for long-term care is real, and most individuals aren’t aware of their risk or what pieces of their insurance, retirement and wealth arsenal can be deployed to pay for it. 

Christine McCullugh
Christine McCullugh

President
LTC Solutions, Inc.

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.

 

About the Author

Christine McCullugh is President of LTC Solutions, Inc., in Redmond, Washington. McCullugh is a speaker and consultant helping shape the future of long-term care insurance. She’s been actively involved with the Washington State Trust Act providing industry and employer insight. In March 2021, she testified at the Washington Senate Health and Long-Term Care Committee HB 1323 supporting an amendment to extend the opt out to 12/31/21. This provided more time for the committee to study opportunities for greater coordination between the private market and the trust program. In 2023, LTC Solutions celebrates 27 years in business with the certification of Women-Owned and WBENC (Women’s Business Enterprise).