As the 2014 Legislative Session sprints to the finish, there’s a modest measure that hasn’t been finalized that could pay huge dividends in the future for seniors and for the sustainability of the state budget.
Seniors advocates are asking for $500,000 to be dedicated to model alternative options for financing long-term services. This is a smart investment for the future care of our seniors.
Here’s the issue: By 2030, one-in-five Washingtonians will be 65 or older. About 70 percent of seniors will require some kind of long-term care including help eating, taking medicine, getting out of bed or using the toilet. Most of those aging Washingtonians have no plan to pay for long-term care.
While many people save for retirement, they haven’t saved enough to pay for the burden of a home care aide or living in an institution like a senior care facility. Medicare provides only very limited long-term care coverage and only a small percentage of the population has private long-term care insurance. People dread the idea of spending down to poverty to qualify for Medicaid, but too often this is the only option.
By 2030, one-in-five Washingtonians will be 65 or older. About 70 percent of seniors will require some kind of long-term care.
Relying on the state Medicaid program isn’t a sustainable solution. Right now Medicaid accounts for about 6 percent of the state’s general fund budget, or about $1.8 billion in the current biennium. If nothing is done, that cost will rise to closer to $5.8 billion by 2040.
Washington isn’t alone in facing the long-term care financing dilemma. Other states are tackling the same conundrum. We aren’t the only ones fighting to keep seniors out of poverty, leverage private resources to help pay for long-term care supports and services, and reduce the reliance on Medicaid. The study would model at least three options would provide legislators with real models for alternative financing options.
1. Private Option: Identify regulatory changes necessary to encourage the development and growth of new private market products that combine features of life insurance, long-term care insurance and annuities or Medicaid life settlements.
2. Public Option: Create a public insurance benefit funded through an individual mandate and a payroll deduction that would provide a time-limited long-term care insurance benefit.
3. Public-Private Option: Facilitate a new marketplace through the Washington Health Plan Finder for private long-term care insurance policies that would provide a time-limited benefit, an age defined individual mandate for purchasing these policies and subsidies to ensure affordability for lower-income individuals.
The ElderCare Alliance, which I chair, and the Aging Caucus, made up of senior advocates and senior service providers, all support this small investment to model better ways to leverage private resources to pay for long-term services and supports. It’s too early in the process to voice support for one or more of these options. The right support, as this point in the process, it to rationally evaluate all options and then determine the best for Washingtonians through the legislative process.
If we are to prepare for the age wave, we must prepare. We must make this investment today to make sure that we can care for our seniors.
Jerry Reilly is a former DSHS Assistant Secretary for Economic and Medical Services and currently is chair of the ElderCare Alliance.