Financing ElderCare: The WISH Act HR 4289

Context:

• Average Americans have no way to save, insure, or provide for the costs of supportive care while disabled in our last years.
• Eldercare causes most spending down to poverty and relying on Medicaid in old age, and family caregivers often lose their own retirement security.
• The average elder needs supportive services for 2 years, 1 in 7 of us will need more than 5 years.
• Change is needed now, since current challenges will be dwarfed by nearly doubling the affected population within a decade.

Federal Catastrophic Long-term Care Insurance – the WISH Act, HR4289

• Federal because elders move from state to state, and catastrophic costs require a large pool of funds
• Catastrophic because then people can make their own plans for the first period of disability, confident of financial help if the period of disability becomes long
• Catastrophe varies with different opportunities to save – well-off people can manage a longer period before needing the support of a public insurance plan
• Long-term care (LTC) here focuses on a period when the person cannot take care of daily tasks without help – either paid or unpaid help is needed every day
• Insurance because the need for long-term care in old age is both unpredictable and quite varied. Some need many years of around-the-clock care, while a few die suddenly with no long-term care need – but no one can predict.  This is by far the most substantial threat to most family’s finances, making it very desirable to be part of a large insurance pool.

Some Specifics about the proposed WISH Act, HR 4289

• Fully paid for by a payroll tax of 0.6%, split between employee and employer
• Cash benefit of about $120/day, tied to inflation, enough for about 6 hours of paid help, including paying family
• Triggered by cognitive disability requiring constant supervision or functional disability of two or more activities of daily living (which is the HIPAA standard used by LTC insurance)
• Requires a waiting period of 1 to 5 years living with disability, depending upon lifetime earnings – 40% of the population with the lowest earnings wait one year, average Americans wait less than 2 years
• Requires paying into the insurance for 10 years for full benefits
• Creates a strong market for private long-term care insurance, since many workers will want to cover the waiting period
• Greatly reduces reliance on Medicaid, avoiding substantial challenges for state budgets

Let’s make it possible for most Americans to pay for the supports needed in advanced age – Federal Catastrophic Long-term Care Insurance – the WISH Act

More Info  – for HR 4289, section-by-section, and a Powerpoint presentation https://suozzi.house.gov/media/press-releases/suozzi-introduces-legislation-transform-american-elder-care-create-federal-long 

for the fundamental research shaping the proposal https://www.umb.edu/mccormack.umb.edu/uploads/gerontology/Public_Catastrophic_Insurance_Paper_for_Bipartisan_Policy_Center_1-25-2018.pdf  

for a succinct overview on long-term care financing options https://us.milliman.com/en/insight/setting-the-stage-a-journey-on-public-ltc-program-design 

for an endorsement honoring the fiscal soundness of the proposal https://www.crfb.org/blogs/representative-suozzi-introduces-wish-act