Our legislation would create a long-term care insurance benefit to help seniors and their families pay for long-term services and support while protecting seniors’ retirement savings and assets.
WHEN it comes to Washington’s aging population, time is not on our side. It’s a fact of life that as we age, most of us are going to need long-term care at some point. These services are not covered by Medicare and cost between $50,000 and $100,000 a year on average.
The statistics are sobering. Across the United States in 2011, 75 million baby boomers began entering retirement age. An average of 10,000 people a day turn 65, a pace that will continue for the next two decades. The number of Washingtonians age 85 and older — those most likely to need care — is projected to be 216,000 by 2030. That’s more than the population of Tacoma.
In short, the Age Wave is upon us, and we must find a way to ensure our growing cohort of seniors receive the care they need. That is why we have introduced the Long-Term Care Trust Act (HB 1636).
Our legislation would create a long-term care insurance benefit to help seniors and their families pay for long-term services and support while protecting seniors’ retirement savings and assets. Funds from a 0.49 percent assessment deducted from workers’ pay would fund the trust and be disbursed through a program overseen by a public-private commission. Workers would be eligible to draw on the benefits of the trust after they’ve worked three of the past six years, or 10 years total.
Here’s an example of how it would work. Let’s say Jane retires at 65 with little savings, but with a retirement plan from work. Everything’s going well, until dementia starts to set in and her kids realize she needs someone to help her with some daily activities. Because Jane paid into the trust and became vested while she was working, she’s guaranteed some money to help pay for this care. This takes some of the burden off her kids, keeps her in her home and helps protect her from losing her entire retirement savings.
A report commissioned by the state shows the need for this kind of program. Currently, more than 90 percent of adults are uninsured for long-term care. Neither regular health insurance nor Medicare pay for such services, so seniors who need help must spend their life savings down to poverty level before they qualify for Medicaid long-term care coverage.
Thousands rely on family members for help. There are 850,000 unpaid family caregivers in our state, but this informal system is not sustainable. Because baby boomers had fewer children than preceding generations, by 2030 the pool of potential family caregivers will decline by nearly half. On our current course, that means Medicaid long-term care will likely consume more than 10 percent of the state budget by 2030, with spending more than doubling from $1.7 billion in 2015 to $4.1 billion.
Our legislation provides a better approach, one that could save the state millions by helping seniors avoid or delay Medicaid enrollment. In addition, it is better for the thousands of families who are trying to care for an aging loved one while maintaining their paid employment because it would provide some assurance that this benefit would be available to help when needed. Businesses benefit too when workers have less need to leave the workforce or take time off to care for an aging family member.
This reform effort has broad support from senior-advocacy organizations, including AARP, the Alzheimer’s Association, the Washington Health Care Association, the Long-term Care Ombudsman Program and many others. They understand the demographic problem we face, and the need to act now.
Our seniors, who have contributed so much, deserve our help and support as they face the challenges of aging. To meet that responsibility, we need to be smart and proactive. Passing the LTC Trust Act is an important first step.