Long-Term Care Insurance: It’s Time to Problem Solve

We have all seen the statistics that America is graying and our country needs to meet the challenges of a growing senior population. Oftentimes, those statistics are discussed in the context of Social Security and Medicare, two very popular government programs. However, what is often not discussed is the concept of providing affordable long-term care insurance. According to the National Institute on Aging: 
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“Long-term care involves a variety of services designed to meet a person's health or personal care needs during a short or long period of time. These services help people live as independently and safely as possible when they can no longer perform everyday activities on their own. Long-term care is provided in different places by different caregivers, depending on a person's needs … It can also be given in a facility such as a nursing home or in the community, for example, in an adult day care center.” 

Currently, in the United States less than 10% of Americans have long-term care insurance, partially because it’s not covered by Medicare and premiums are cost prohibitive. The issue gets compounded because 50% of people who turn 65 will require some assistance with long-term care and, given the exploding senior population, you see why providing “affordable care” is a problem that will only get worse.
 
Recently, Rep. Tom Suozzi (D-NY) introduced the WISH Act that looks to make catastrophic long-term care insurance more economical. Suozzi’s legislation would provide beneficiaries an average of $3,600 a month for care, with the timing of benefits determined by an individual’s income and physical needs. Furthermore, Suozzi believes this legislation would ease the government’s financial obligations because less people would need to spend down their assets to qualify for long-term care through Medicaid. Suozzi said, “We have a storm coming, with the number of disabled elders expected to double in the coming years. Fewer family caregivers are available for these aging Americans and the market for long-term care insurance is not currently sufficient to address these demographic challenges. The WISH Act would save the Medicaid program and millions of Americans from financial ruin, would allow people to age at home with dignity, and would create millions of good-paying, middle class jobs in the home health care industry.” 

In addition, similar to Social Security, the WISH Act would not contribute to the debt because the program would create a trust fund that would be financed by a 0.3% wage tax on employees and employers. Also, Suozzi argues that the legislation would allow the private insurance market to offer more affordable plans because insurance companies would not have to guard against catastrophic long-term care. 

It’s not just Suozzi who is problem solving; currently, Washington state is launching a long-term care insurance program that will go into effect on Jan. 1, 2025. Benefits are awarded based on physical need and have a lifetime cap of $36,500. The program is funded through a 0.58% payroll tax on wages and individuals may opt out if they purchase their own insurance. This legislation is projected to save $1.9 billion by 2052 for Washington Medicaid. Like the WISH Act, proponents of the bill argue cost savings will be realized because people won’t have to use Medicaid to pay for long term care. 

Nobody should have to go broke or go without care simply because they are getting older. As our senior population keeps growing and private insurance continues to be unaffordable, our country’s long-term care crisis is only getting worse. Legislative fixes that ease the financial burden on Medicaid and provide affordable long-term care must be examined. As we prepare for the future, we should work under the premise that caring for older Americans is more than shoring up existing programs like Social Security and Medicare, but also looking to find ways to expand care, which must include solutions to our advancing long-term care crisis.

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Evan Carmen, Esq. is the Legislative Director for Aging Policy at the B’nai B’rith International Center for Senior Services. He holds a B.A. from American University in political science and a J.D. from New York Law School.  Prior to joining B’nai B’rith International he worked in the Office of Presidential Correspondence for the Obama White House, practiced as an attorney at Covington and Burling, LLP, worked as an aide for New York City Council Member Tony Avella and interned for Congressman Gary Ackerman’s office. Click here to read more from Evan Carmen.