Retooling the Nation’s First Long Term Care Insurance Program

Washington State delays start of groundbreaking health benefit

Seventy percent of Americans who turn 65 need long term care at some point, but the nation has no program in place to help pay for that. Families can be bankrupted by the expense. In 2019, the state of Washington passed a law establishing a state-wide program, which could become a model for the country. It hasn’t started yet and is currently being retooled. In this article written for Kaiser Health News, journalist Michelle Andrews describes the law as it stands and the changes under consideration. Her story was posted on the KHN website on April 18, 2022. It also ran on NPR. Funding from the Silver Century Foundation helps KHN develop articles (like this one) on longevity and related health and social issues. 

Patricia Keys, 71 and a stroke survivor, needs help with many everyday activities, such as dressing and bathing. Her daughter Christina, who lives near her mom in Vancouver, WA, cares for her in the evenings and pays about $3,000 a month for help from other caregivers.

Christina Keys, 53, was thrilled three years ago when Washington state passed a first-in-the-nation law that created a long term care benefit for residents who paid into a state fund. She hoped it would be a resource for others facing similar challenges.

The benefit, which has a lifetime limit of $36,500, would have made a big difference during the first year after her mom’s stroke, Keys said. Her mom needed a ramp built and other modifications made to her house, as well as a wheelchair and hospital bed. The extra money might also have made it easier for Keys to hire caregivers. Instead, she gave up her technology sales job to look after her mom.

“People are under this cloud of delusion that between your insurance and your retirement [income] you’re going to be fine,” she said. “They don’t understand all the things that insurance doesn’t cover.”

But relief for Washington families will have to wait. The WA Cares Fund,  which was set to begin collecting money for the program with a mandatory payroll tax on workers in January [2022] has been delayed while lawmakers made adjustments during the current legislative session. Payroll deductions will start in July 2023, and benefits will become available in July 2026.

Other states are watching Washington closely as they weigh offering coverage for their own residents. In California, a task force is examining how to design and implement a long term care program, according to the National Conference of State Legislatures. Illinois and Michigan are also studying the issue, according to the NCSL.

Supporters of the Washington program say it just needed fine-tuning and note that social programs like Medicare and the Affordable Care Act also underwent tweaking. The program’s long-term solvency, however, is in doubt and the cost to workers who buy into the program is in question.

We don’t have a solution at the federal level, so states are taking it on themselves to experiment with solutions.

—Bonnie Burns

What’s not in doubt is that it is critically important to address long term care needs. About 70 percent of people who turn 65 will require some type of long term care services. Many will need help such as an at-home assistant, while others could face a stay in a nursing home, which on average costs more than $90,000 a year. But many don’t have good options to cover the expense. Medicare’s coverage is very limited, while Medicaid generally requires people to impoverish themselves before it picks up the tab. Private long term care insurance policies are unaffordable for most people.

The upshot: many people rely on unpaid family members to help them with medical care, as well as everyday activities like bathing and dressing.

The problem is getting much worse. The number of people 85 and older is projected to more than double within the next 20 years, while the number of Americans living with Alzheimer’s disease and related dementias is expected to double as well, to 13 million. 

The federal Community Living Assistance Services and Supports Act (CLASS Act), which was part of the Affordable Care Act, created a voluntary long term care buy-in program, but it was never implemented because of concerns it wouldn’t be financially sound. Since then, policymakers in Washington, DC, have had little appetite for addressing the problem.

“We don’t have a solution at the federal level, so states are taking it on themselves to experiment with solutions,” said Bonnie Burns, a consultant for California Health Advocates and an expert on long term care who was appointed to a Washington state committee to help develop a supplemental long term care insurance product to be offered alongside the state benefit.

The Washington state program’s maximum benefit is intended to cover a year’s worth of home care at 20 hours a week, said program director Benjamin Veghte, PhD.

Although wealthy people likely can afford to pay for their care and the poorest families qualify for Medicaid, middle-class families might burn through their savings trying to cover such bills.

Many employers are now offering their workers the opportunity to buy a private long term care plan.

“It doesn’t solve all the problems, but with a modest premium and a modest benefit it eases the problem for families,” Veghte said. It could also give some families time so that “maybe they can develop a plan” for long term care needs after their benefits expire, he added.

Although the law passed in 2019, it remained below many people’s radars until the mandatory payroll deduction approached. Workers faced a tax of 0.58 percent per $100 of income. For someone earning $52,000 annually, the deduction would equal $302 a year, according to state estimates. As people realized they were about to have to start paying into the program, some pushed back.

Workers could get an exemption if they had private long term care insurance, and thousands of people scrambled for that coverage before the Nov. 1, 2021, opt-out deadline. Many of the state’s employers quickly offered workers the opportunity to buy private plans.

Because withholding for the benefit isn’t capped based on income, wealthier people may be better off with private long term care insurance, if they can pass the insurer’s medical evaluation.

“We did have a good number of higher-earning, younger folks who wanted to buy a policy,” said Gary Brooks, a certified financial planner who is co-owner of BHJ Wealth Advisors in Gig Harbor, WA.

By last month, 473,000 workers had taken the one-time offer to opt out of the program.

Other people raised objections because they would have to pay into the system but wouldn’t benefit. These included people who work in Washington but live in a neighboring state, the spouses of service members who are unlikely to make Washington a permanent home, people planning to retire before the three years needed to qualify for benefits, and some workers on temporary visas. The commission overseeing the long term care program has estimated that the number of people from these groups eligible to opt out is about 264,000.

We know that as the first state to do this that it may not be perfect going out of the gate.

—Jessica Gomez

In January, Gov. Jay Inslee signed legislation that addressed many of these issues. It allows certain groups to opt out and people nearing retirement to receive partial benefits based on the number of years they paid into the program.

One other group—those who plan to retire elsewhere—hasn’t been addressed, but the state is developing recommendations for the legislature, Veghte said. According to current actuarial projections, 3.1 million workers will begin paying into the program next year, out of a total of 3.6 million, Veghte said.

Some critics are concerned that allowing more people to opt out of the program puts it on increasingly precarious financial footing.

“The solvency issue just gets greater and greater,” said Richard Birmingham, a partner at Davis Wright Tremaine in Seattle who is representing employers and workers in a class-action lawsuit that claims the law violates federal and state statutes governing employee benefit plans. “Any change they make further increases the cost.”

Supporters are sponsoring a ballot initiative that they believe would help bolster the program’s assets by allowing program funds to be invested in a diversified portfolio rather than fixed-income investments. That initiative “probably will eventually” pass, Veghte said, even though it failed in 2020.

Although the program delay isn’t ideal for the thousands of people who could benefit from the new program in the short term, consumer advocates are taking it in stride.

“We know that as the first state to do this that it may not be perfect going out of the gate,” said Jessica Gomez, coalition manager of Washingtonians for a Responsible Future, which represents community groups for aging and disability populations. “It may have to be fixed, but we’ll fix the problems and go forward.”

The New Shingles Shot: Much More Effective Than the Old One

If you skip it, you could develop a painful and all-too-common disease

Shingrix, the new shingles vaccine, is so much better than the old one that medical experts are urging people who have already had the old vaccine to be revaccinated with Shingrix. But will their advice fall on deaf ears? Many older people fail to have the preventive shots that are available to them. Journalist Michelle Andrews digs into the reasons why in this article written for Kaiser Health News (KHN). The article also ran on NPR. KHN posted it on March 20, 2018.

Federal officials have recommended a new vaccine that is more effective than an earlier version at protecting older adults against the painful rash called shingles. But persuading many adults to get this and other recommended vaccines continues to be an uphill battle, physicians and vaccine experts say.

“I’m healthy, I’ll get that when I’m older,” is what adult patients often tell Michael Munger, MD, when he brings up an annual flu shot or a tetanus-diphtheria booster or the new shingles vaccine. Sometimes they put him off by questioning a vaccine’s effectiveness.

“This is not the case with childhood vaccines,” said Munger, a family physician in Overland Park, KS, who is president of the American Academy of Family Physicians. “As parents, we want to make sure our kids are protected. But as adults, we act as if we’re invincible.”

The new schedule for adult vaccines for people age 19 and older was published in February 2018 following a recommendation [the previous] October by the federal Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices and subsequent approval by the director of the CDC. The most significant change was to recommend the shingles vaccine that was approved by the Food and Drug Administration last fall, over an older version of the vaccine.

As you age, you’re more likely to develop shingles, and it’s more likely to create chronic problems for you.

The new vaccine, Shingrix, should be given in two doses between two and six months apart to adults who are at least 50 years old. The older vaccine, Zostavax, can still be given to adults who are 60 or older, but Shingrix is preferred, according to the CDC. In clinical trials, Shingrix was 96.6 percent effective in adults ages 50 to 59, while Zostavax was 70 percent effective. The differences were even more marked with age: effectiveness in adults 70 and older was 91.3 percent for Shingrix, compared with 38 percent for Zostavax. Shingrix also provided longer-lasting protection than Zostavax, whose effectiveness waned after the first year.

The guidelines suggest that people who already had the Zostavax shot be revaccinated with Shingrix.

The two-shot series of Shingrix costs about $280, while Zostavax runs $213.

“What’s remarkable [about the new vaccine] is that the high level of immunity persists even in the very old,” said Anne Louise Oaklander, MD, PhD, a neurologist who is an expert on shingles. “It’s pretty hard to get the immune system of older people excited about anything.”

Shingles is caused by the same varicella-zoster virus that causes chickenpox. The virus can re-emerge decades after someone recovers from chickenpox, often causing a painful rash that may burn or itch for weeks before it subsides. About one in three Americans will get shingles during their lifetime; there are roughly one million cases every year. People are more likely to develop shingles as they age, as well as develop complications like postherpetic neuralgia, which can cause severe, long-standing pain after the shingles rash has disappeared. In rare cases, shingles can lead to blindness, hearing loss or death.

Why Don’t More Older People Get Recommended Shots?

Although shingles vaccination rates have inched upward in recent years, only a third of adults who were 60 or older received the Zostavax vaccine in 2016.

Other adult vaccine coverage rates are low as well: 45 percent for the flu vaccine and 23 percent each for pneumococcal and tetanus-diphtheria-pertussis vaccines.

In contrast, by the time children are three years old, typically more than 80 percent of kids, and frequently more than 90 percent, have received their recommended vaccines.

What gives? Cost can be a big deterrent for adult vaccines. The federal Vaccines for Children program helps parents whose kids are eligible for Medicaid or are uninsured cover the cost of vaccines up to age 19.

Adults with private insurance who get vaccines recommended by the CDC also are sheltered from high costs because the shots must be covered by most commercial plans without charging consumers anything out-of-pocket, under a provision of the Affordable Care Act. Patients, however, should confirm their coverage before requesting the new shingles vaccine, because insurers typically add new vaccines gradually to their formularies after they have been added to the recommended list, and consumers may need to wait a little while for coverage.

Older adults sometimes lose track of which vaccines they’ve had, and sometimes there’s no record of what they’ve been given.  

But vaccine coverage under the Medicare program for people age 65 and older is much less comprehensive. Vaccines to prevent influenza and pneumonia are covered without a copayment under Medicare Part B, which covers outpatient care.

Other vaccines, including the shingles vaccine, are typically covered under Part D drug plans, which may leave some beneficiaries on the hook for all or part of the cost of the two-shot series.

That can pose a significant problem for patients. “Not every Medicare beneficiary elects Part D, and even if you do, some have deductibles and copayments,” said William Schaffner, MD, an infectious-diseases specialist at Vanderbilt University School of Medicine.

Even if adults want to get recommended vaccines, they sometimes lose track of which they have received and when. Pediatricians routinely report the vaccines they provide to state or city vaccination registries that electronically collect and consolidate the information. But the registries are not widely used for adults, who are more likely to get vaccines at various locations, such as a pharmacy or at work, for example.

“I’m always asking patients, ‘Did you get all the doses in the series?’ ‘Where did you get them?’” said Laura Riley, MD, vice chair of obstetrics at Boston’s Massachusetts General Hospital, who is a member of the Advisory Committee on Immunization Practices. “It can be very challenging to track.”