Washington Introduces the Long-Term Care Trust Act

In American history, the pioneers moved from the East Coast to the West. In modern times, however, the West Coast often leads the country in innovation. Right now, Washington State is pioneering a financial plan that may move eastward and affect us all in years to come.

Laurie Jinkins, a Democratic representative from Tacoma, Washington, has introduced the Long-Term Care Trust Act. She knows that the cost of long-term care for seniors might bankrupt the state if no action is taken.

The median savings for retirement for Americans is $107,000. In Washington State, the median retirement savings is $148,000. While that may sound like a lot of money, the cost of long-term care averages about $260,000.

The Cost of Long-Term Care

According to the National Institute of Health, 70 percent of the population over the age of 65 will need long-term care. And few people will have saved enough to afford it. In fact, 90 percent of the population has no plans — and no savings — for long term care.

Medicare only covers skilled care and rehab, not long-term care. The bulk of the cost of long-term care typically falls to Medicaid.

The Long-Term Care Trust Act, has already passed through the House and is now being considered by the Washington Senate. The legislation would create a trust, funded by employees over decades of employment. Each worker would contribute $0.58 per $100 earned, or about $0.13 per hour, and be eligible to draw on it after three years.

Employers would not contribute to the fund.

If a person who has paid into his Long-Term Care Trust doesn’t need medical care, funds can still be withdrawn for things like wheelchair ramps, in-home care, doctor visits or Meals on Wheels.

The maximum benefit would be $36,500 — a significant amount to apply to long-term care costs that a person might not have saved without the Long-Term Care Trust.

The Benefit of the Long-Term Care Trust Act for States

The benefit to the state is a huge savings to its Medicaid fund. Estimates range from savings of  $470 million to $3.9 billion by the year 2052. These massive savings are created “by helping people pay for care before they impoverish themselves to receive Medicaid,” according to Washingtonians for a Responsible Future.

What happens in Washington may not stay in Washington. In future years, the innovation shown there may move across America and help its citizens prepare for long-term care.