Washington Long Term Care, Trust Act, LTC Partnership, Insurance Cost & Quotes

Long term care is a key aspect of any sound retirement strategy. This kind of care entails professional help with activities such as bathing, grooming, consistence, eating, and wound care. Most people who need long term care are usually rendered unable to do such activities by illnesses or disability, especially those brought about by old age. According to the U.S. Department of Health and Human Services, 70 percent of Americans will need long term care after they reach the age of 65. Unfortunately though, most American families only learn the importance of planning for long term care after experiencing challenges of paying for such services.

Washington is among the most populous states with a population of over 7.3 million people. Based on data from the US Census Bureau, over 800,000 citizens in Washington are 65 years or older. That’s nearly 1 million residents and counting in the Evergreen State who will increasingly need and use Long Term Care. If not prepared with Long Term Care Insurance, this rising number of seniors will put increasing economic stress on families and the state. The Evergreen State has come up with measures such as laws and programs that facilitate the availability of quality and affordable long term care services for Washingtonians to have a peace of mind knowing that they will age with dignity and comfort.

Long term care awareness

A recent study by Genworth found that 7 in 10 Americans have made no plans for long-term care and many were not even aware of this type of insurance and what it covers. The Department of Health and Human Services estimates that 2 out of 3 Americans aged 65 and above will need long-term care at some point. These statistics highlight the need to solve the problem of long term care as soon as possible. Many Americans, regardless of the State in which they live, are at risk of exhausting their savings and assets to pay for long term care should they become unable to take care of themselves in the future. Awareness of the need for Long Term Care Insurance remains low in Washington, as in the rest of the country. What’s more, Washington ranks third in the nation for home health care services yet awareness remains low. 

How to pay for long term care

1. Personal Funds

For individuals with sizeable assets and who earn a stable income, paying for long term care out of pocket is arguably the best option. Paying for LTC personally comes with the flexibility of choosing a facility and plan of your own leaning rather than settling for what is given by options such as insurance. It is important to note that a private room in a nursing home in Washington will require an annual payment of $116,618 meaning that it would cost you $349,854 ($116,618 x 3) for a single LTC event of 3 years. This option –  which remains unreachable for most Washingtonians – comes with flexibilities that other options do not have.

Medicaid

1. Long Term Care Insurance

There are two main types of long term care insurance available in Washington that come with different perks:

• Traditional long term care insurance – traditional LTC insurance provides quality long term care coverage in exchange for annual premiums. This insurance allows you to protect your assets and secure your peace of mind knowing that should you need long term care – you’ll receive it in a facility of your choice. A major drawback of this kind of insurance is unpredictable premium increases, which has made it less popular in recent years.
• Hybrid long term care insurance – hybrid LTC is typically a combination of permanent life insurance or an annuity with a long term care rider. Most hybrid policies require that you make a single lump sum premium deposit. Should you need long term care, then the policy will provide daily or weekly benefit payouts. In the case you do not need long term care, the hybrid insurance will pay out a death benefit to your beneficiaries. This approach basically eliminates the use-it-or-lose-it scenario evident in traditional LTC insurance.

Washington residents have the choice of around 17 great Long Term Care Insurance companies that can help protect their savings in the event they need Long Term Care services.   

Most popular long term care companies in Washington

1. Mutual of Omaha
2. Genworth
3. Mass Mutual
4. TransAmerica
5. Prudential
6. New York Life

LTC Tree has helped thousands of Washington State residents find a suitable plan for their budget and needs. Our team collects your information delivers competitive quotes from the top Blue Chip insurers in the state. Get started here.

The long-term care Trust Act 

In light of the struggles residents were undergoing to pay for LTC, the state of Washington took a major step by initiating The Long Term Care Trust Act that will ensure the affordability of LTC in the near future. The bill is supposed to take effect in the year 2022 and every worker will be expected to pay a modest monthly payroll tax of 58 cents for every $100 they earn. WA state residents will need to pay into the fund for 10 years – 3 if they experience a catastrophic disabling event – so they can tap into $100 daily payouts with a lifetime cap of $36,500 when they need assistance with daily activities such as bathing, eating, and dressing. 

Washington partnership for long term care

A partnership program is a collaboration between the state and private insurance companies that aims at providing citizens with quality services at an affordable price. Washington has the Washington Long Term Care Partnership that is a joint program involving Medicaid and private insurance companies purposed to provide long term care to Washingtonians in need. The program works in that both Medicaid and Private insurers collaborate to pay for medical bills and services for people receiving long term care in nursing homes, assisted living facilities, or at home. 

Via the Washington Long Term Care Partnership Program, residents of Washington are able to purchase Long Term Care Insurance with a number of policy options that meet certain State-mandated criteria. Washington, like many states, hopes to reward those who do their part in solving this problem of Long Term Care Insurance coverage by planning ahead and protecting themselves and their assets.

Individuals purchasing a long-term care insurance policy or contract governed by chapter 48.84 or 48.83 RCW and meeting the criteria prescribed by the State legislation, and any other terms as specified by the office of the insurance commissioner and the department of social and health services, shall benefit from the exclusion of some or all of the individual’s assets when checking for Medicaid eligibility.

Basically, it works like this: the amount of coverage you purchase in a Long Term Care Insurance policy can be disregarded should you need to apply for Medicaid. This means you’ll be able to hold on to more of your nest egg without having to pay out-of-pocket for long-term care. Assume you receive $200,000 in benefits from your LTC policy, and use up all amount without concluding your need for care. You can apply for Medicaid coverage while protecting your assets. During your Medicaid application, then $200,000 worth of your personal assets – such as savings, family-owned businesses or farms – would be exempted from the qualification requirements. Further, Medicaid would not recover that $200,000 from your estate’s resources after you die.

→ Features and requirements of WA LTC partnership policies:

• Be guaranteed renewable;
• Provide coverage for nursing home care and provide coverage for an alternative plan of care benefit as defined by the commissioner;
• Provide optional coverage for home and community-based services. Such home and community-based services shall be included in the coverage unless rejected in writing by the applicant;
• Not require prior hospitalization or confinement in a nursing home as a prerequisite to receiving long-term care benefits;
• Contain at least a six-month grace period that permits reinstatement of the policy or contract retroactive to the date of termination if the policy or contract holder’s nonpayment of premiums arose as a result of a cognitive impairment suffered by the policy or contract holder as certified by a physician; and
• Provide automatic inflation protection or similar coverage for any policyholder through the age of seventy-nine and made optional at age eighty to protect the policyholder from future increases in the cost of long-term care. Inflation protection ensures that the insurance pays out in tomorrow’s dollars depending on the dollar rates at the time of reimbursement.

WA tong term care cost

To buy the right policy that suits your preferences and financial capacity, you need to know the cost of various types of LTC. The table below shows the average annual 2018 cost of care in Washington based on a Genworth Financial survey.

Long term care insurance premium costs in Washington

The cost of long term care insurance premiums in Washington depends on your health history and age at the time when you purchase the insurance. Premium rates tend to be lower when you are younger and healthy. Other factors that may influence the cost of LTC premiums in the Evergreen State include:

• Benefit period – this refers to the total amount of time (in years) throughout which the insurance policy will pay out benefits.
• Daily maximum benefit – refers to the maximum dollar amount an LTC policy will reimburse you for each day when you receive care.
• Elimination period – an elimination period is the length of time between when you start receiving care and when the policy starts paying for that care.
• Inflation protection – when selected, this policy feature ensures that the benefit dollars you receive should you need long term care in the future are adjusted for inflation.

Washington Sample Long Term Care Premium Calculations

We did a few sample premium calculations so you get an idea of how much you’d pay to purchase long term care insurance in Washington. These calculations assume that the policy holder selects an elimination duration of 90 days, daily maximum benefit of $200, and a benefit period of 3 years. 

→ At Age 50

Single Male, Age 50, pays $1894 annually

Single Female, Age 50, will pay $2,277

Couple, each age 50, pays a combined $3,291 annually

→ At Age 55

Single Male, Age 55, pays $1,967 annually

Single Female, Age 55, will pay $2,381

Couple, each age 55, pays a combined $3,308 annually

→ At Age 60

Single Male, Age 60, pays $2,070 annually

Single Female, Age 60, will pay $2,963

Couple, each age 60, pays a combined $3,390 annually

→ At Age 65

Single Male, Age 65, pays $2,627 annually

Single Female, Age 65, will pay $3,921

Couple, each age 65, pays a combined $4,453 annually

NOTE: premium rates for long term care insurance increase with age. It’s evident from the calculations above that couples can also attain significant discounts by purchasing the policy jointly. Also, women pay more for long term care regardless of age bracket.

Join the LTC Tree family today and get connected with insurance professionals who will help you find a suitable plan for your long term care preferences.