In July, Washington state became the first in the nation to roll out a long-term care insurance program.
The WA Cares Fund is designed to help people with long-term care needs stay in their homes as long as they choose and covers services ranging from in-home care, paying a family caregiver, and home safety modifications to home-delivered meals, transportation and more. Workers began contributing to WA Cares on July 1, 2023, and benefits will become available July 1, 2026.
By contributing 0.58 percent of each paycheck to WA Cares through automatic payroll deductions during their working years, workers will earn access to a $36,500 lifetime benefit (adjusted annually for inflation) to help pay for long-term care services when needed.
Employers are required to withhold contributions from workers’ paychecks, so workers do not need to take any action themselves to participate.
Around 70 percent of Washingtonians will need long-term care at some point in their lives, but most don’t have a way to pay for it. Private long-term care insurance is only affordable for the highest earners. Before WA Cares, people who need care were forced to pay out of pocket despite living on a fixed income or spend down their life savings down to just $2,000 to qualify for Medicaid. Loved ones had no choice but to fill the gap with their own savings or unpaid caregiving, often sacrificing their own financial security in the process.
“The system of paying for long-term care in this country is broken,” said WA Cares Fund Director Ben Veghte, Ph.D., in a statement. “The vast majority of Washingtonians don’t even have enough saved for a comfortable retirement, much less long-term care.”
“The kick-off of WA Cares represents a critical step toward addressing the long-term care crisis in our state,” Veghte added. “Over time, I hope WA Cares will provide Washington families with the feeling of support and security they get from similar social insurance programs like Social Security and Medicare.”
For the typical covered worker making just over $50,000 per year, contributions will be about $24 a month, according to the state. Most workers who participate will be eligible to receive more in benefits than they pay into the program. In fact, workers who claim benefits would have to earn more than $210,000 every year for the next 30 years to contribute more into the WA Cares Fund than they will be eligible to receive for long-term care needs.
To receive benefits, workers must meet contribution requirements and need help with at least three activities of daily living like eating, bathing, and moving around the house.
The state estimates that for about a third of people, the $36,500 lifetime benefit (adjusted for inflation) will be enough to cover all the care they need. For everyone else, it will provide families with immediate relief from long-term care costs without the need to spend down their life savings, as well as time to develop a plan for how to take care of their loved one.
"With our aging society, we would all do well to start having kitchen table conversations about how we want to live as we age and how we are going to make it work financially,” said Veghte. “I hope that the launch of WA Cares will kick-start these conversations while also providing critical resources to help families enjoy more dignity and independence as they cope with the difficult challenges that come with dementia or other long-term care needs.”
