WHAT IS WA CARES, AND WHAT IS LONG-TERM CARE INSURANCE?
The WA Cares Fund is a new public benefit in Washington State to help people pay for long-term care, a type of care you may need when experiencing an injury, disability, or other health issue that makes it difficult to care for yourself. People with cancer, dementia, diabetes, heart attacks or strokes, broken bones, and many other injuries and illnesses may need help bathing, dressing, moving around, meal preparation, managing medications, and other basic daily tasks. In fact, 7 out of 10 Washingtonians will need long-term care at some point in their lives.
WA Cares is public long-term care insurance, so that everyone working in Washington State has access to affordable long-term care services when they need it and can get this support where it’s most appropriate for them—whether that’s their home, an assisted living facility, an adult family home or a nursing home.
WHAT EXACTLY DOES THIS BENEFIT COVER FOR ME AND MY FAMILY?
Beginning in January 2025, an eligible person in Washington can access services and support up to a maximum of $36,500. You and your family can decide how, when, and where to spend this benefit, including paying a trained family caregiver so that someone who cuts back on work to care for a family member doesn’t lose as much income. A benefit of $36,500 is enough to pay for:
- 25 hours per week of in-home care for a year
- 9 to 18 months in a residential care such as an adult family home or assisted living
- Five to six months in a nursing home
- Five years of family caregiver support that includes respite, caregiver counseling and education, home modification
For about half of families who need long-term care, this benefit will cover all the long-term care they will require. For those who end up needing more or longer care, this benefit allows people time and resources to figure out further solutions.
There is private long-term care insurance available, but WA Cares is a public benefit, like Social Security or Medicare, and has advantages over corporate insurance. If you have or want to get private insurance as well, you are still allowed to use WA Cares along with your private insurance. You have a one-time choice to opt out of WA Cares if you prefer to only use private insurance, but that is a permanent choice and you will not have a chance to opt back into WA Cares if you need it in the future. To opt out of WA Cares, you must have purchased a qualifying private long-term care insurance plan before November 1, 2021.
WHAT DOES IT COST?
Starting in 2022, people working in Washington State will pay 0.58% of their earnings into the WA Cares Fund only when they are working. Unlike private insurance, you do not have to pay this when between jobs, out of the workforce, or after retirement, but your coverage under the benefit will still continue. This a pre-tax benefit, so you will not pay taxes on the portion of your paycheck that goes to the WA Cares fund, and your WA Cares benefit will not be taxed as income when or if you use it.
Here’s what this means for some average income levels in Washington:
|Annual Income||WA Cares Cost Annually||WA Cares cost per week|
You are eligible for this benefit once you have contributed to the fund for ten years with a minimum of 500 hours per year and without a break of more than 5 years within those ten years, or if you have contributed three of the last six years at the time you apply for the benefit.
WHY DOES WA CARES EXIST, AND WHY DO ESSENTIAL WORKER UNIONS SUPPORT IT?
Long-term care costs can strain family budgets and savings at a time when you want to focus on staying healthy and getting the care you need. Private long-term care insurance exists, but it’s expensive, the premiums can be higher for people based on their gender and age, and you can be denied coverage due to preexisting conditions. In Washington, we’ve seen the number of companies offering long-term care shrink dramatically in the last decade:
In 2001: 137 companies offering long term care insurance coverage in WA
In 2021: 10 companies offering long-term care insurance coverage in WA
Some people will need more care than WA Cares can cover, but having an existing benefit in place means your family has time to receive all the care they need while making plans for the future. Some workers have long-term care insurance through a job, but that insurance may end if you leave your job, or the expensive premiums may fall on you to keep paying. Unlike WA Cares, private insurance requires you to keep paying your premiums even after you retire.