Washington started the nation’s first mandatory state long-term care insurance program in 2023, WA Cares, funded through a payroll tax. Before you dismiss this as a Washington story, it’s worth understanding what it signals for your clients everywhere as other states watch closely.
What to know
- WA Cares provides a lifetime benefit of up to $36,500, funded by a 0.58% payroll tax with no income cap
- Workers could opt out if they obtained qualifying LTC insurance during a narrow window in 2021
- The program has faced criticism, a ballot initiative to repeal it, and significant press coverage in Washington State
- When claims payments begin this summer, expect more national press coverage
Planning implications
This state-run benefit is intentionally limited. In most markets, $36,500 covers less than six months of assisted living, while the average care event lasts around three years. No state can sustainably fund multi-year long-term care for everyone.
The state of Washington effectively gave residents an umbrella in a hurricane. It provides real help, but it also makes the size of the storm visible.
I think the most significant impact is psychological. Once clients understand that a state benefit may cover only a fraction of a multi-year care event, the planning conversation shifts quickly. I'm seeing a disproportionate number of Washington residents inquiring about supplemental coverage as a result.
When to raise this with clients
- When clients assume Medicare, Medicaid, or future government programs will cover their long-term care needs
- When a client is in a state debating a public LTC program
Bottom line
WA Cares will not solve the long-term care funding problem, but it is reshaping how clients think about government involvement and personal responsibility. As similar programs expand, advisors nationally should expect more client questions on both.
Client resources: I publish short videos and articles explaining long-term care concepts for your clients.
Work together: I'm a long-term care specialist. In addition to articles like these, I help financial professionals evaluate coverage options for clients. Reply or schedule time to refer a client or discuss a case.
Best,
Jesse Vickey
Long Term What?
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