Comment: Protect state’s new long-term care trust program

The trust program to provide a long-term care benefit faces a threat from the insurance industry.

By Charles Reed / For The Herald

It’s one of those things many of us don’t think about or plan for until a crisis strikes or urgency forces our hand.

But as anyone who has needed help with long-term care for themselves or for someone they care about will tell you, Washingtonians are quite fortunate to have one of the best systems in the nation. Our state’s long-term care system is ranked so high because it’s based on consumer choice and provides various options for people to receive the care that best meets their individual needs and the settings they prefer.

However, consumer choice is only half the equation. Our long-term care system needs continual improvement to keep up with the increasing demand of a population that is growing older, and affordability remains a significant issue. Seventy percent of Washingtonians 65 and older will require some assistance to live independently as they age. Yet, only 9 percent of people in Washington can afford private insurance for long-term care, and that market has been shrinking even as the age wave is ramping up.

To help tackle this problem as well as the risk of overwhelming the state’s Medicaid program, Washington passed legislation in 2019 to create an innovative new public program to help Washingtonians better prepare for a long-term illness, injury or disability. Workers would pay the Long-Term Services and Supports Trust program through a small payroll premium of 58 cents on every $100 earned, providing a benefit of up to $36,500 to help people live independently, including help with personal care, medical assistance, transportation, meals and more.

Currently, there is work underway in the Legislature to make improvements to the trust with House Bill 1323, which expands coverage to include tribal employers, people who acquired a disability before the age of 18, and the self-employed who are the power of the new “gig economy.” It also has a provision that allows current long-term care policyholders to opt-out of the payroll premium. The bill was adopted by the House and is now in the Senate.

Just as Washington is solving the challenge of long-term care financing that has eluded other states, we are now seeing an outpouring of resistance from the private long-term care insurance industry. A move that will undermine that effort by exploiting the opt-out provision for current policyholders.

The long-term care insurance industry has developed an intensive fear-based marketing campaign urging major employers to quickly and hastily buy private plans to avoid the premium. The diversion of premiums from the trust into the insurance industry’s deep pockets threatens to financially weaken a program that so many Washingtonians need for themselves and their loved ones. Plus, there is no evidence the private plans they’re selling would overcome the market problems that have created the decades-long death spiral of the long-term care insurance industry.

How ironic that over decades, the private industry, which has failed to provide a viable solution, now seeks to undermine the long-term care trust, which guarantees basic care to all who pay in. History tells us the bulk of Washingtonians who choose the unstable private market over participating in the trust are likely to find themselves without coverage when they need it years from now and will be forced to spend down their personal savings or go onto Medicaid.

Instead of marketing private plans as a replacement for the trust’s benefits, private insurers should work collaboratively to develop plans that provide “wrap around” coverage in addition to what all working Washingtonians will have via the trust.

HB 1323 must be passed to keep Washington leading the way when we need it most.

Charles Reed, retired and living in Olympia, is the former deputy secretary for the Department of Washington State Social and Health Services and former director of Washington State Aging and Long-Term Care Services.

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