What is Happening with our Government and Long-Term Care?

By: Linda Cahill

The world that we live in is in a constant state of change. One industry which has recently been experiencing some drastic changes is that of long-term care insurance. Currently, nearly 30% of our states are discussing state mandated long-term care programs (Nationwide Long-Term Care Presentation 2021). In many cases, any opt-out opportunity would require the policy purchase date to be prior to a governor’s signing of the bill into law. Why should you care about these changes? Well, if you’re presently considering or may need to consider long-term care in the future, then this could directly impact your future financial decisions.

To give you some background into this change, a federal bill which was part of the Affordable Care Act, was repealed in 2013 due to the failure of the HHS (Department of Health and Human Services) to develop a valid model for the program to be financially sustainable for at least 75 years. Voters rejected the long-term care bill twice, but legislators in Washington passed a bill to make it happen regardless. Under the WA Cares Fund, the program and payroll deductions for the bill will begin January 1st, 2022. Payroll taxes for W-2 employees will be .58%, so 58 cents per $100 earned. There is, however, a one-time offer to opt-out if you purchased a long-term care policy prior to November 1st, 2021.

How will this affect you? Citizens may be disincentivized from purchasing meaningful long-term care coverage and be given false security that their long-term care is taken care of by the state due to this new change! The $36,500 that the WA Cares Fund provides may not be enough to fund your long-term care needs. You may need more coverage and you may need it for yourself as well as your spouse, as the state bill may not cover your significant other. So far, 12 out of 50 states are considering a program. As of right now, Ohio is not one of those states, but that doesn’t rule them out for future possibility.

Who will likely benefit in WA or similar state bills? Those who would benefit would be low-income employees who are not Medicaid qualified, uninsurable employees at older ages, and people retiring in the next 10-15 years. Who may be left out of getting benefits? Those individuals may be people who have already retired or will retire in the next few years and are unable to vest, non-working spouses not covered in WA, people who move or retire out of state even if vested, and people who never lived in WA but have to pay tax due to being classified as a WA state employee. Hopefully other state programs will address some or most of these gaps.

What can you do today? If you have a long-term care policy, keep it because it’s golden! You may never have a policy like this again. If you’re thinking about acquiring a long-term care policy, explore your options sooner rather than later. Fraught with issues that were not appropriately addressed, time will only tell what ultimately will transpire due to this bill. There are also other federal initiatives out for long-term care programs, which we don’t know what will happen due to frequent changes.

How can Enza help? If you’re thinking about acquiring a long-term care policy, now is the time to do it! It will be much more affordable today versus tomorrow, and there are creative life insurance plans that include long term care coverage. This allows you to use one policy to serve two different needs. If you elect for long-term care, you will have more control over your choices and benefits. It can also be custom designed to fit your individual needs. As we age, many of us may choose to move out of state where the private insurances are totally portable. That type of freedom is very unlike the policy which is being implemented in Washington, and we have the knowledge to help give you that freedom and confidence. Don’t wait to purchase a long-term care policy and explore your options today! Call Enza at 216-236-0700 to let us help you plan for your future.

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