As recently reported by The Seattle Times, The Washington Cares Act (WA Cares Act), which is a bill in Washington State to address Long Term Care Planning and how to pay for Long Term Care, has been delayed until July 2023, giving more time for lawmakers to address issues to make the program as viable and effective as it can be. The act was signed in 2019, and is the first social insurance program to address how people will be able to care for themselves and their loved one’s as they age, and have issues related to Activities of Daily Living (ADLs), such as bathing, using the bathroom, getting dressed and several other routine things that most people take for granted until their older and unable to perform such routine activities.
Will the Washington Cares Act help?
The Washington Cares Act provision for benefits will be funded via a payroll tax in Washington State and will offer eligible beneficiaries up to \$ 36,500-lifetime benefits to pay for care services associated with long term care needs and Activities of Daily Living (ADLs) that they are struggling to manage themselves. The act is the first and most prominent attempt by a government organization to address the growing long term care funding need in the United States. This is a good step by a government agency to address the problem of paying for long term care, but it is not mean to be fully encompassing. In other words, it won’t fund the full cost of the needs of Washington residents. The average annual cost of long term care in Washington ranges from \$26K for Adult Day Care services, up to \$131k for a private room in a nursing home.
While many people may be ok with Adult Day health care for a little while, most will need more advanced care services, and the costs for those are much higher than what the WA Cares fund will provide in benefits. There is of course something to be said for “something’s better than nothing,” and that’s true. But, hopefully people in Washington are doing their research to understand just how expensive long term care really is, and that while this is a good step, it should only be part of their long term care plan, which needs to be more comprehensive when it comes to how to pay for long term care.
Cost of Long Term Care are high
The Washington Cares Act is a great idea, and it’s good to see a state government taking the issue seriously, realizing that long term care needs are growing, and most Americans do not have a plan in place or the ability to pay for it out of their own pockets. So, it’s great that the legislature in Washington state is taking matters into its own hands. However, there is one big drawback to their plan. Unfortunately, the costs of care are so high, that even having access to $36,500 in benefits will only be a drop in the bucket in the state of Washington. According to Genworth Financial’s 2020 Cost of Care Study through a partnership with CareScout, the costs of care in Washington State are rising quite a bit, and the $36,500 will only cover up to a little over a year for just Adult Day Care services.
Long Term Care Planning is incredibly important
10,000 people are turning 65 every day, and all baby boomers will be 65 by 2035. So, a tsunami of people getting older is happening, and the need for long term care planning and long term care funding is growing more and more dire each day. Long term care insurance is a private option that many people can use to pay for long term care services, but unfortunately, there have been several issues with the industry and the number of carriers has been limited over the last decade. However, there are still some good carriers in the space, offering competitive long term care insurance products. Thrivent, National Guardian Life, and Mutual of Omaha are all highly rated insurance companies still in the space and could be an option for many. Most importantly, talking to loved one’s about making a plan, and making a plan for funding long term care needs to be done. If you are indecisive about short vs long term disability insurance, inform yourself on both.
Future of the Washington Cares Act
It’ll be interesting to see what transpires over the next 1-2 years as Washington State works out the details of the plan to make sure it’s as successful as it can be. Hopefully, during that time, other states can learn from what they’re doing, and also realize that there needs to be more of a push for national publicity of the growing need for long term care planning by baby boomers, and the generation just below them because the costs of care keep rising, and a government program like WA Cares will only help but so much. More comprehensive understanding, planning, and funding must be done. Whether that will give rise to more interest in long term care insurance more plans by State governments or both, remains to be seen. The Washington Cares Act is a step in the right direction, but more needs to be thought of and done. People need to understand that and take matters into their own hands, and not wait for the government to do so. It will likely be too late for so many.