As Washington awaits the release next week of Gov. Jay Inslee’s proposed 2015-2017 budget, and how it will fund another big increase in education spending, a coalition of labor, management and advocates is sounding an alarm about a future challenge: the Age Wave.
An aging population has only begun to impose its infirmities on the state’s Medicaid programs for long-term services and supports, or LTSS. In the current budget biennium, Washington will spend $1.8 billion on LTSS, about 6 percent of state spending. Medicaid pays 62 percent of all those bills, with families and the few with long-term care insurance picking up the rest.
Medicare pays for long-term care only for a 60-day period following surgery or an acute illness.
Just 11 percent of Washington’s population today is 65 years or older, and the deteriorating health that requires LTSS does not begin to affect most until they pass 70. In 2030, 20 percent of the population will be 65-plus.
The bills are only beginning to come due. How high those costs might rise, and how the state might cope with them, has not been quantified. Inslee’s last budget requested $500,000 for an actuarial study that might have answered those questions, but the Legislature took that money out of the final version.
The Washington Health Care Association, a trade group representing most nursing and assisted-living homes, estimates that almost two-thirds rely on Medicaid to pay their bills, which means they have liquidated all their savings and property.
About 10 percent have long-term care insurance, policies that are disappearing or becoming prohibitively expensive because clients are living longer, and returns on the conservative investment insurers must rely on have been dismal.
Also, notes association President Robin Dale, private policies pay more for care; they are subsidizing Medicaid patients who may pay $100 a day less for the same services, which range from $18,000 per year for home health care services to $90,000 for the most intensive nursing care.
The association and the Service Employees International Union, the union that represents many nursing home employees, want Inslee to resubmit his request for a study. With solid numbers in hand, the industry and state government can start looking at solutions, perhaps a long-term security trust program with mandatory contributions but no vesting: Individuals could draw on a portion of their money when the need arose. Hawaii is close to launching such a program.
Dale notes his association is not now supporting any mandated program.
As large as the potential problem may be, Washington starts from a very strong position. A 2014 survey sponsored in part by the AARP ranked Washington second only to Minnesota in five measures of LTSS, including access and affordability, and family support.
But a better understanding of the Medicaid issues ahead of Washington can be achieved relatively cheaply. Do the study, or tap into private sector research that may well already have the answers.