State bill would address strain of long-term healthcare costs

Median retirement savings falls short of what wellness costs.

Washington could be trying something different to help mitigate the financial burdens of long-term health care costs.

The Long-Term Care Trust Act — currently with similar bills in both the House and Senate — would mandate a .58 percent payroll premium. On 50,000 a year income, about $24 a month would go into the fund. In exchange, those eligible would receive a lifetime benefit of $36,500, indexed to inflation.

“The whole genesis of this bill is we know people have not saved adequately to cover the costs of care,” said Cathy MacCaul, advocacy director for AARP, a supporter of the mandate. “We need to step up as a state and look for a creative way to address the crisis.”

For about four years legislators and the coalition Washingtonians for a Responsible Future, formed with aging and disability advocates, businesses, long-term care providers, consumer rights organizations and families, has been working on legislation, refining it and researching policy. The end result is a “consumer friendly bill” that gives people options on how to spend their benefit, MacCaul said.

Currently a problem exists, MacCaul said, with what Medicare covers. It only pays for about 100 days of acute care following a major medical issue. Becauses of this, seniors unable to afford their own long-term care providers often resort to “spending down to poverty” in order to qualify for Medicaid. It covers the cost.

“People have spent their lives doing great things, having a career, raising a family,” MacCaul said. “We feel strongly the people should be able to age with purpose and dignity and not having their last years of life plagued by issues on where to get care and how.”

Primary bill sponsor Rep. Laurie Jinkins has experience dealing with difficulties that come with long-term care for seniors. For three years her mother-in-law spent down her resources paying for her housing in an assisted living facility.

In her experience, most of the assisted living locations require a resident fund their stay with private pay for two years — and then allow the resident to switch to using Medicaid to cover the cost, even though the state reimbursement sometimes isn’t enough.

Her mother-in-law, having been at her location for three years on private pay, switched to Medicaid. Three months later the facility announced they would be closing. Jinkins’ family was able to secure financing for another long private stay at a new facility, and will continue to “spend down” her resources again. But not everyone is as fortunate.

For those without the means to cover the full cost of long-term assisted living care comes a slim selection of facilities that do take Medicaid off the bat, the representative said.

She thinks this legislation could help. And it’ll soon move from the appropriations committee, she said, and maybe by next week move onto the floor of the House. “The bill has strong bipartisan support,” Jinkins said. “People really understand that we have a crisis and that it’s just fundamentally wrong to make people spend into poverty. They get that this bill will let us do much better by people.”

While the bill doesn’t solve the problem of high long-term care costs, “it gives people some kind of insurance to slow down the process so they can take care of themselves or have a family member take care of them,” MacCaul said.

And other states are watching. The bill would implement something never done in the nation before. The most important aspect (and what MacCaul said AARP really advocates for) is that family caregivers could be paid using the funds. Family caregivers spend as much as 20 percent of their own income caring for their loved one. There’s about 850,000 unpaid family caregivers in the state.

“We wanted to figure out a way to make that less financially burdensome,” MacCaul said.

Katharine Wismer knows what it’s like to be a caretaker for a family member. For nearly two years, the 60-year-old Issaquah resident has taken care of her mother, following her mom’s stroke at age 82. Despite a “surprising” recovery, her mother still requires professional home care assistance once a week and outpatient physical therapy twice a week. Wismer shops and cooks for her mother, and is in charge of care coordination, transportation and finance management.

In this case, Wismer’s mother had the means to help fund her care. But like so many others, Wismer finds herself in a predicament. After a career as a corporate trainer for 20 years, her own retirement savings are limited.

The median retirement savings for people older than 65 is just $148,000 and falls short of lifetime cost of care averages of $260,000, according to a Merrill Lynch Study.

And a lack of affordable and discounted senior living places adds to the issues, Wismer said.

“Look at your situation and start planning ahead,” she said. “Pass this legislation so that those who are younger won’t be faced with the tough decision of having to live in a slummy place.”

Wismer currently works part time as the program coordinator at the Issaquah Senior Center — it gives her added time to care for her mother. However, the part-time gig has led Wismer to a paycheck-to-paycheck living.

“I have a front row seat to how expensive long-term care can be, and my only plan right now is to hope my kids can take care of me when my time comes,” she said.

Wismer’s name was included among more than 6,000 petitions that were delivered to state lawmakers in Olympia on Feb. 6. They urged that legislators pass the LTCTA.

The biggest concern, MacCaul said, is the next generation of retirees.“It’ll be such a huge number seeking assistance as they retire. We want to make sure we have a solid solution in place,” she said.