Nearly a decade after federal officials discarded a provision in the Affordable Care Act that would have provided Americans with long-term care insurance benefits, two states -- Washington and Hawaii -- are experimenting with taxpayer-funded plans to help older residents remain in their homes.
Washington state's ambitious plan, signed into law in May, will employ a new 0.58% payroll tax (or "premium," as policymakers prefer to call it) to fund a $36,500 benefit for individuals to pay for home health care, as well as other services -- from installing grab bars in the shower to respite care for family caregivers.
Hawaii's Kupuna Caregivers Program, which was initiated in 2017, is also publicly funded, but state budget allocations limit enrollment and benefits. It provides up to $210 a week for services when family caregivers work outside the home at least 30 hours a week.
Other state policymakers are closely watching both experiments because, as seniors account for a greater proportion of the American population, the need for long-term care will increase. Josephine Kalipeni, director of policy and partnerships for Caring Across Generations, a national group that advocates for long-term care policy improvements, said, "What's most exciting for us and for the country is to have a working model we can learn from."
The need is great. The number of Americans 65 and older will double to 98 million by 2050, and studies show few have the financial resources to pay for care in old age. More than half of adults 65 and up will require long-term assistance at some point with everyday activities, for an average duration of about two years, according to a 2015 study by the Department of Health and Human Services. Finding a way to help people stay in their homes -- and not move to nursing homes -- can keep them happier and save them and the state money. Medicaid programs help cover the costs of 62% of nursing home residents.
Sixteen% of Americans have private long-term care insurance, according to the American Association for Long-Term Care Insurance. But that is an expensive option, with premiums averaging as much as $3,000 a year in 2019.
Affordability and sustainability are the two main challenges to public long-term care insurance programs. The federal ACA originally included the long-term care provision -- sponsored by Sen. Ted Kennedy (D-Mass.), who did not live to see it enacted -- called the Community Living Assistance Services and Supports (CLASS) Plan. The voluntary program would have provided benefits of up to $50 a day for home assistance or to help with nursing home care for people who paid into the system. But critics said the program was unlikely to draw healthy people to help pay premiums, and the Obama administration in 2011 said it could not find a way to make it solvent. Congress later repealed the provision.
Initially, Washington state officials considered an alternative plan -- shoring up the private long-term care insurance market -- but determined that option was neither affordable nor likely to succeed.
Instead, they created a benefit system with a broad definition of covered services, from paying someone to build a wheelchair ramp to helping a caregiver learn how to deal with aggressive or violent patients. They could have shrunk this list to make the program less expensive, but Washington policymakers believed offering a wide menu of services would help keep people out of nursing homes.
The state will begin collecting the payroll tax in 2022, and starting in 2025 residents can collect benefits if they have paid into the system for at least three of the previous six years or five consecutive years within a decade. The details will be set over the next few years, but to qualify for a benefit of up to $100 a day, which will be adjusted for inflation, a person must show they need help with at least three activities of daily living.