Recently, the state of Washington became the first state to institute a long-term care program, funded by a payroll tax, to address the future long-term care issue facing the state. This is quickly becoming a costly issue as more of us are living longer and the costs of care are increasing.
Here are some recent stats on the LTC issue in the United States:
- 7 of 10 adults will need long term care after they turn 65 years old.[1]
- 90% of people are not insured for long term care and 70% of people rely on public benefits like Medicaid to cover long term care.[2]
- Medicare does not cover long term care and families are forced to spend down their life savings to $2000 in their savings account to qualify for Medicaid long-term care coverage and can be left without financial security.[3]
- Caring for a loved one comes at a huge cost for families. Nationally, family caregivers spend an average of 20% of their own income on out-of-pocket costs related to caregiving. [4]
In Washington state, their annual Medicaid spending is expected to double by 2030. As Washington’s older population more than doubles, the number of people who require long-term care will also increase. Washington has decided to implement a payroll tax that creates a fund to help working Washington state residents with long term care costs. This will thereby save Washington taxpayers $3.9 billion in Medicaid costs by 2052. To learn more about the WA Cares Fund™, click here.
What if you don’t live in the state of Washington? Even if this isn’t happening in your state, it is a development that we are keeping an eye on. While nothing is for certain, other states like Minnesota, California, Michigan, Illinois, Hawaii, and New York may be considering legislative action themselves.
Our financial advisors at TimeWise are very passionate about planning for Long-Term Care. It’s a crucial part of a successful retirement plan. If you currently don’t have Long-Term Care insurance and want a free quote from us, schedule a call with our office.
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[1]https://responsiblefuture.org/facts/#facts_challenge
[2]https://responsiblefuture.org/facts/#facts_challenge
[3]https://responsiblefuture.org/facts/#facts_challenge
[4]https://responsiblefuture.org/facts/#facts_challenge