A press release from WA Cares Fund.
Starting January 2022, Washingtonians will begin making contributions into the WA Cares Fund. The WA Cares Fund is a new long-term care (LTC) insurance benefit workers earn, like Social Security, that can help people stay in their own homes as they age.
“Most people don’t think about long-term care early in life and only start to consider it in their 50s or 60s, when it is more expensive,” said Ben Veghte, PhD, Director of the WA Cares Fund. “The WA Cares Fund offers affordable long-term care insurance to everyone, so that people at all income levels can afford long-term care when they need it.”
Seven in 10 Washingtonians will need long-term care at some point in their life. Long-term care involves a variety of services designed to meet a person’s personal care needs. These services help people live as independently and safely as possible when they can no longer perform everyday activities on their own.
Examples of these services and supports include in-home care (including payments to professional care workers or to children or spouses who take care of a family member), care in a facility, adaptive equipment like wheelchair ramps, assistive technology, home-delivered meals, and rides to the doctor.
Most people can’t afford long-term care when they need it, and Medicare and health insurance don’t pay for it. Often an individual’s life savings are depleted to pay for the cost of care. In other cases, family members are forced to quit their jobs or lose hourly wages in order to care for loved ones. Many also turn to Medicaid to pay for long-term care once their savings are depleted. Under the WA Cares Fund, eligible individuals are entitled to a lifetime benefit of $36,500 (adjusted annually up to inflation) to pay for long-term services, even care provided by family members.
“Many of us think of long-term care as nursing home care. But with the WA Cares Fund, Washingtonians will be able to age in place in their own homes much longer by drawing on a broad range of services and supports,” Veghte continued. “Older adults typically need long-term care for less than three years. WA Cares will give families resources and choices, such as whether they want to make a loved one a paid caregiver or bring in a home care aide.”
Vesting and Accessing WA Cares Benefits
WA Cares Fund is self-funded entirely by worker contributions from wage earners who work in Washington state. Employers do not contribute. Premiums begin Jan. 1, 2022 and are capped at 0.58% of wages, or about $25/month for the typical worker earning $52,000.
Beginning January 2025, benefits become available to qualified, eligible individuals. To be eligible to receive the benefits, you must have contributed at least 10 years without a break of five or more years, or three of the past six years at the time you apply for the benefit and have a need for assistance with at least three activities of daily living like eating, bathing, or dressing.
WA Cares Fund Exemptions and Private Insurance
Workers who hold existing private long-term care insurance or purchase a new private policy before Nov. 1, 2021, can apply for an exemption from WA Cares coverage. If approved, their exemption means they aren’t required to pay premiums and will be permanently excluded from WA Cares benefits.
To apply for a permanent exemption, workers must:
- Have purchased a qualifying private long-term care insurance plan before Nov. 1, 2021.
- Be at least 18 years of age.
- Submit an exemption application to the Employment Security Department (ESD). Exemption applications will be available starting Oct. 1, 2021.
One of the reasons WA Cares coverage is affordable is that premiums are owed only when you are working. Private premiums are typically much more expensive not only annually but particularly over a lifetime because they must be paid until the policy holder dies or needs care, which can be difficult during periods of unemployment or child rearing, as well as on a fixed income throughout retirement.
Learn More About the WA Cares Fund
Have questions? To learn more about the WA Cares Fund:
- Visit the WA Cares Fund website.
- Visit the WA Cares Fund Learn More page to read frequently asked questions.
- Email wacaresfund@dshs.wa.gov and a member of the WA Cares Fund team will follow up with you.
- Join an upcoming webinar.
- If you have a question about exemptions, call the Employment Security Department’s WA Cares representatives at (833) 717-2273.
Health is wealth. A great many people can’t manage the cost of long-haul care when they need it, and Medicare and health care coverage don’t pay for it. Regularly a singular’s life reserve funds are drained to pay for the expense of care.
You know what they say about ‘good intentions” which is what WA is attempting… slow the rising expense of Medicaid. Most Americans are not planning for their eventual need for care, possibly their largest unfunded liability.
People are unrealistic about long term care… and about the WA Cares Act providing any decent coverage.
LTC Costs in WA are $200+/day for home care & assisted living and $300+/day for nursing home. The $100/day benefit is not going to stop people going backrupt paying the difference ($3000-$6000/month) out of pocket and ending up on Medicaid.
Most people do not know that Medicaid will force you to spend all your liquid assets and after you’re gone they can have your estate repay Medicaid (usually with selling the home).
Articles need to address the problem: the risk. Statistics says 72% of women and 44% of men will need care. The Dept HHS says 70% (not including home care & assisted living – longtermcare.gov)
The problem has been compounded with the “opt-out deadline” which didn’t make sense. After insurance companies were flooded with low premium applications they either suspended sales (Mutual of Omaha, John Hancock, Thrivent, etc) or they raised the minimum premium to disuade applicants since most were not looking to the insurance for protection, just to opt-out of the tax.
Some European countries provide for citizens from cradle to grave… and citizens (unlike US even the rich and corporations) pay a high tax. Americans don’t like to be taxed, but the long term care risk is there, like in Europe… somehow one way or another, we all pay.
Some important details are missing from this PR article that might mislead the public.
1) Because the WA Cares effort was developed prior to the pandemic, and the pandemic is disproportionately impacting certain people, the WA Cares program will be especially negative at this time to working people.
2) The large and sophisticated companies such as Microsoft and Amazon employees were all given affordable and easy options to opt out. Federal employees were excluded. Very wealthy people who own assets and derive substantial income through asset ownership were excluded. Self-employed people have the option. Other groups were excluded.
3) However, for working people, we have no option to opt out. While the WA Cares website says we have the option to opt out by getting insurance (I just checked again, and the website still says that), the reality is that option is a false option — it is inaccurate and should be disclosed on the WA Cares website that the insurance option has completely broken prior to the deadline. The WA Cares program refuses to be honest and transparent on their website.
4) Most fiduciary financial advisors will tell you that WA Cares is a bad program for your family — it’s a low return savings account with a max payout that has rules and restrictions that you are more likely to get a negative return on, even if you were to live in the state at time of need.
5) It’s unfair to require that working people participate in the program if they don’t want it or need it (or if they will be legally excluded from), when rich people and literally billionaires in the state have been given an easy option to not participate.
6) A person who makes $25/hour and works in Washington state for 40 years will overfund this new long-term care account relative to its potential benefit; and when she moves in with her child in Maine when she needs at-home care, she forfeits the small benefits that she never wanted from the get go — it’s just cruel.
7) Even the name “Long Term Care Trust” is misleading, as we all know the benefit is only a small fraction of the true potential long-term care liability.
7) Unfortunately the extremely low service level of the state government means that working people who aren’t interested in this program are left on their own to deal with the consequences of the program, when all the rich people have been given the option to opt out.
WA Cares is dragging those people who can least deal with it behind a car sputtering down the road which is missing a few tires and most of its engine and trying to patch it together over time. And those people who are trying to follow the rules are given no way to opt out of the program due to the highly predictable lockdown in the insurance market for this obscure and limited coverage.