Tuesday, June 18, 2019
Kaiser Health News recently ran a story, Payroll Tax Is One State’s Bold Solution To Help Seniors Age At Home. According to the article,
[T]wo states — Washington and Hawaii — are experimenting with taxpayer-funded plans to help older residents remain in their homes.
Washington state’s ambitious plan, signed into law in May, will employ a new 0.58% payroll tax (or “premium,” as policymakers prefer to call it) to fund a $36,500 benefit for individuals to pay for home health care, as well as other services — from installing grab bars in the shower to respite care for family caregivers.
Hawaii’s Kupuna Caregivers Program, which was initiated in 2017, is also publicly funded, but state budget allocations limit enrollment and benefits. It provides up to $210 a week for services when family caregivers work outside the home at least 30 hours a week.
As the article notes, there is a growing need for caregivers.
The number of Americans 65 and older will double to 98 million by 2050, and studies show few have the financial resources to pay for care in old age. More than half of adults 65 and up will require long-term assistance at some point with everyday activities, for an average duration of about two years, according to a 2015 study by the Department of Health and Human Services. Finding a way to help people stay in their homes — and not move to nursing homes — can keep them happier and save them and the state money. Medicaid programs help cover the costs of 62% of nursing home residents.
The article notes that other states are watching the results of these two innovative programs, but it will take some time to see the results. In Washington state, "[t]he state will begin collecting the payroll tax in 2022, and starting in 2025 residents can collect benefits if they have paid into the system for at least three of the previous six years or five consecutive years within a decade. The details will be set over the next few years, but to qualify for a benefit of up to $100 a day, which will be adjusted for inflation, a person must show they need help with at least three activities of daily living." The program is projected to be a money-saver, to the tune of "$3.9 billion in state Medicaid costs by 2052."
Other states are exploring other solutions:
Minnesota is considering allowing people to convert life insurance plans to long-term care insurance.
Maine voters rejected a ballot proposal to provide free long-term care to residents, funded by a 3.8% income tax on residents making more than $128,400 a year. Instead, the state government is educating people about the need to buy long-term care insurance, including an awareness campaign in high schools.
The California Aging and Disability Alliance, an advocacy group, is considering a ballot initiative for a state program to provide long-term services and support.... Michigan and Illinois are also studying proposals.
New York lawmakers have debated a graduated income tax to pay for comprehensive long-term care for its citizens. The Assembly has passed such a bill repeatedly, but the state’s Senate has refused to approve it.