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Now or Never: Long-Term Care Strategy is a podcast for all those seeking answers and solutions in the long-term care space. Too often we don’t fully understand the necessity of care until it’s too late. This podcast is designed to create solutions, start conversations and bring awareness to the industry that will inevitably impact all Americans.
Social Security provides a foundation of retirement security for everyone that we all pay into we all benefit from. And then most of us want to save more on top of that, not everyone's able to write. But if you're not able to at least you have that foundation. But if you are able to you can save into a 401 k or IRA and have a lot more money to retire. This is kind of a similar model where everyone pays in, we all have a foundation of long term care security. And if you want more, you can get more.
Welcome to Now or Never Long-Term Care Strategy with Kosta Yepifantsev a podcast for all those seeking answers and solutions in the long term care space. This podcast is designed to create resources, start conversations and bring awareness to the industry that will inevitably impact all Americans. Here's your host Kosta Yepifantsev.
Hey, y'all, this is Kosta. And today, I'm here with my guest than that the director of the Washington cares fund, the nation's first universal Long Term Care Insurance program located in Washington State. Today, we're talking about the universal need for universal long term care. So for anyone who isn't familiar, will you tell us about the Washington State cares fund in your role as director?
Sure, thank you, Cass, it's great to be here with you. I'm excited to talk about this important subject. So the Washington cares fun is the first of its kind in the United States, although similar programs exist in Germany and the Netherlands, Japan and many other countries. And basically, it takes the model of Medicare and implements it for long term care. Now, Medicare is medical care for older adults and people with disabilities. And what the Washington cares fund is financed in a similar way as Medicare hospital insurance, where you paying out of every paycheck over the course of your career, a small amount, but a half a percent of what you earn.
So for the typical worker in our state, that's about $24 a month they pan and when you're older, or if you have an accident or illness over the course of your life and you need long term care, you have access to $36,500 that you can use as you see fit to purchase long term care services and supports to help you remain in your own home as you deal with your long term care challenges.
And now that amount of money is annual or is that just the for your entire life. So hold on,
that is for your entire life. It's not designed to to address all of everyone's need, okay, it's a it's a modest premium. And for a modest benefit. The policymakers in our state made a calculation that people did this, the people would be roughly prepared to pay about a half a percent into a fund like this. And they could have had the premium four times as high and the benefit four times as high. But with a one to start with a modest premium, modern bet modest benefit. And then if people want to purchase additional private insurance, they're able
to Yeah, absolutely. And so what is your day to day look like being director, it's exciting,
you know, we are studying the problems that Washingtonians face in this regard, trying to understand them as best we can. So as we design our program, we're meeting their needs, we're working to make sure that we develop a network of long term care providers, whether it's home care aides or institutional providers or ramp builders, do crap bars in the bathroom, all the different services and supports that people need. We're working to make sure that there's a pipeline for that in our state, because, as you well know, the population 85 or older is doubling over the next 15 years. Yeah, and more and more people are going to need these services. So what we do is part of the solution, which is have a financing mechanism that helps everyone afford it. But the other part of this is actually having enough people who are offering these services, the workers, the other service providers, because otherwise there'll be a big shortage in 10 or 15 years for these kinds of workers. And that would drive up the price of these services and also create access issues. So we're working on all of those all of those issues.
Yeah. And so it's interesting, because you would think that being a director of the fund, you're just going to focus on kind of the financials, and making sure that you have the means to be able to make those funds successful. But really, it's about building the foundation for Washington State. Because you right, if you you can have as much money as you want. But if there's not people there to provide the service, then it doesn't matter. You're still at square one, right?
It particularly in rural areas, you know, the my dad lives in upstate New York, and he had an issue once where he needed support, and the nearest person was a 45 minute drive away who could be available. So that's, that would be hard to have. If someone had to come three times a week, you know, that becomes very expensive to pay for the transportation for that person.
And they may not even be willing to come at all. And we have a lot of rural areas in our state and as most states do, and so we want to make sure that we're prepared that this benefit not always available to people but also meaningful to them.
I want to touch on this very briefly, but how did you get into this line of work?
That's a great question. Um, You know, most of us have almost all of us have care stories in our families, right. And my, my mom had Parkinson's. And so I was very close to her and accompanied her on that long journey through the various stages that you go through and starting to need assistance at home and redoing the bathroom to put grab bars in and lower the rim between the floor of the bathroom and actually entering the shower, removing obstacles that she might trip or fall over, eventually bringing someone in to help cook for her so that she wouldn't, you know, burn herself or herself in the kitchen, all of those stages. And finally, she she went into an assisted living facility, and then nursing home weighing and hospice. So all of that made me realize that we, what people really need as they age is dignity and independence. No one wants to lose their independence prematurely. I mean, sometimes you have to go to an institutional setting, eventually, but most of us would prefer to stay either at home or in an adult family home, where they're living with other adults who are in a similar situation as long as possible. And the other part of it is the dignity aspect, right it to the extent that you can be empowered to have a home care aide, or in our state, you can even pay a family member to take care of you, that enables you to have control over your life at a time when you're losing control over so many things. Right. And that's that inspired me to want to go into this area to give more people that kind of dignity and independence this age. So I
got to ask, alright, so the payroll tax is the primary funding source for this program. Right? the only the only source and it's a, and it's a very modest tax for a very modest benefit, like you said, collectively, though, why are we so apprehensive about paying for other people's care?
That's a great question. I think, you know, I think we didn't always it wasn't always this way, you know, we enacted Social Security in the 1930s, which created the, you know, created what we now call retirement. You know, before that, it most people weren't able to ever retire. It made it before that people always had to move in with their kids when they got older. And so, which was not great for the parents or the kids. Most cases, I wouldn't, I would assume. And so I think that over the last few decades, we've become more and more individualistic in our society. And, and I think especially during the pandemic, people started to get afraid of a lot of things. So many, there's so much change in the world that people have kind of tortoise back into their shell, you know, and our, you know, we have cameras outside our houses.
And we're, we're kind of, you know, reluctant to partake in community the way we maybe were over most of American history.
And so we hope that this is in our state as a first step to help make it easier for people to be part of a community and solve this problem together.
Because individually, it doesn't make sense, it doesn't make sense to provide for this completely individually, right?
Let me give you a metaphor for that, which is Social Security and 401k plans. So Social Security provides a foundation of retirement security for everyone that we all pay into, we all benefit from. And then most of us want to save more on top of that, not everyone's able to write but if you're not able to at least you have that foundation. But if you are able to you can save into a 401 k or IRA and have a lot more money to retire on. This is kind of a similar model. And where everyone pays in, we all have a foundation of long term care security. And if you want more, you can get more. And we think it's a good balance between the role of the public sector and the private sector, just like with our retirement system, a foundation of security that we all pit pitch into together. And then the rest you can do on your own. But you know, we don't know no one knows ahead of time, what their long term care costs are going to be. Right? Seven and 10 of us have some need. It might be a $20,000 need a $30,000 need or could be a $500,000. And you you just don't know. And insurance is a very efficient way of dealing with things like that. Kind of like with retirement. You know, I don't know if I'm going to live to be 60 or 80 or 100. Right. And so I don't know how much to save for retirement. The great thing about Social Security is it gives you a fixed amount of money every month until you pass away. So you have a certain degree of security throughout your life, no matter how long you live for long term care.
Walk here's gives you a foundation of security. And I think people are starting to become more aware that that's necessary.
You have auto insurance that's mandated if you want to drive a car, you have a very close, I mean, obviously it's been repealed, but the original intent was that health insurance would also be mandated. So why not mandate Long Term Care Insurance?
Yeah, that's an interesting question. sedition question and it's a philosophical one, which I am not a philosopher, so I'm not sure to answer it. But I would say that I would say that if you don't protect yourself So for example, my father, very individualistic, independent, strong, man. Many people like that all across our country who think that if you work hard and you're tough, you will be able to do everything on your own right. But there's a comes a time and almost everyone's life.
And that changes, and you can't predict when it's going to happen. And for my dad, he fell down the stairs, you know, somebody think my mom got a diagnosis. And it happens to seven and 10 of us. And so when that does happen, the if you don't prepare for that, it doesn't just affect you. And it's hard for you in that situation, but but not only affects you, it affects your children, your spouse. So you know that when it when something happens to a parent, the kids have to get together and figure out what are we going to do, right? Do we pitch in financially? Do we take turns taking care of him or her mom or dad? Who takes? Right, right.
And so I think it's really important that we realize that what you're implying here is true, which is that they're just like, the reason why people are required to have car insurance is so that if you do hit someone else, right, that that person isn't isn't, you know, a victim of the fact that you didn't prepare, right? You could make the same argument for long term care insurance,
but it's and we'll we'll definitely have that discussion in the future. But right for right now, what are the unique advantages that only universal Long Term Care coverage brings to the United States and our future generations?
Yes, that's a great question. Because the there's a magic to universal programs like this, which is that it solves the problem that that private voluntary insurance has. So voluntary insurance, whether it's private or public, has a core problem, which is adverse selection, which means that, let's say, look at let's look at private long term care insurance, the average premium nationwide, according to the latest data, is $2,700 a year and those premiums, they start out lower when if you buy it when you're younger, and they go up higher as you get older, typically. And the reason that's so expensive, is because the average age at which people buy Long Term Care Insurance is age 60. Because most people just don't think about it until they get older. And they start to feel their own mortality. And then they see their parents going through things. And that's when they buy. And so the not only to the fewer years over which to spread the cost of the financing their benefits the premiums higher. But the other part of it is that the to make money and private insurance company only wants to sell to people who are unlikely to need long term care. That's the way insurance works if like with if car insurance, if I have too few car accidents, I'll pay a much higher premium than if I have a good driving record as well. For long term care if I'm an insurance company, and I see that someone has a history of dementia in their family, or they have diabetes, I probably won't cover them at all. Because there's a high risk that we would face a high claim down the road. And so prevalence from care insurance is a good solution for people who can afford it. But only about seven to 10% of people can afford that. Because the premiums continue after you retire until the day you die or need care. If you dropped your coverage at 85, and you stopped paying in, you lose your private insurance coverage. And then if at 89, you need long term care, you don't have it. So you really have to pay till the day you die or need care. Most Americans on a fixed income in retirement can't afford to pay $2,700 a year for their own plus maybe the same for their spouse, it's just not affordable for most people. So with public universal Long Term Care Insurance, we all pay in kind of like Social Security or Medicare, from your first job, you know, collecting tickets at the movie theater, you know, at age 15, until your last job, you pay in a little bit out of every paycheck. And then And then because of that, because everyone's in the same risk pool, there is no adverse selection, where the riskier people you know, only only people would think they're going to need it by it. You end up with Healthy People, sick people, young people, old people all in the same risk pool, which means that we as a plan can lower that keep a low premiums for everyone. And the risk gets averaged out over the whole population.
I look at cost plans all the time. And they are much higher than$36,000 a year annually. And so I'm curious and in turn, you were talking about the affordability, and also the access issues that face long term care services. So two questions First, how does the Washington cares fund address those affordability and access issues? Given that you know, you only get the 36,000 which I understand is just foundation, but still I'm interested but also I want to know just from your perspective, given that you've been doing this for so long, and you've been so kind of boots on the ground and engaged with this problem. Why is it so prevalent and persistent in 2023, in which particular Comrie referring to the one about affordability and access in terms of long term care services?
Yeah, I think because you know, Americans, most Americans aren't prepared for retirement to begin with the typical household approaching retirement has, you know, less than $50,000 saved in their 401 K or an IRA for retirement savings? You know, that's not enough to that's only about a$300 a month annuity if you bought an annuity at 65. And so not only do most people not have enough money to retire on, then there's health care costs that are higher in retirement, and long term care costs are on top of all those expenses, right. So I think we all struggle to pay our bills, you know, if our kids go to college, that's very expensive. It's expensive to live expensive to raise children. And it's just hard to save money for most people. And so it's just something it's hard to prepare for, which is why it's great to have a program like walk chairs in place where you don't have to think about it's kind of like Medicare, imagine if we didn't have Medicare, P and you got older, you know, two thirds of the population wouldn't have access to health care in retirement, think how traumatic that would be for people who get cancer or have other health problems. So it's great to have something else that you don't have to think about, that you're automatically paying into. But it'll be there for you when you need it
will this end up being a is the long term goal of the Washington cares fund, to allow for long term care to be covered by Medicare? Is that is that somewhat of the long term goal, like if we can prove that this model works, then maybe we can implement a raise maybe somewhat of the mayor of the Medicare tax, and then we can start offering long term care to all Americans as a benefit of Medicare as opposed to just you know, state by state, similar to how it's run now and the Medicaid system?
Right. I mean, we don't we certainly don't have any any specific agenda or goals as a program about that. But I think a lot of the people who were behind this program originally, and you know, advocates around the country, AARP and others, care deeply as to you and I about the the problems that families face when a loved one needs long term care when they have dementia or, and so the, I think that it would make sense to do this on a national level, for a lot of reasons, it would make it easier for private insurance companies to offer supplemental private coverage, because it'd be the same program everywhere, and then they could dock onto that.
It would make it easier for people who to plan as they move across states employers would know that it's the same everywhere and make it easier for them, if they wanted to offer some supplemental employer employee benefit, they could. So I think that definitely makes sense. And if we do it, we will be successful. And if and when we are, I think you're gonna see other seats, move California is very close to doing something like we're doing. Several other states are also considering similar things. And I think in 10 years from now, you'll see two or three other states doing this. And 20 years from now, there'll be something at the federal level. I don't know if it has to be through Medicare, it could be, you could also do a standalone program. There's pros and cons to different ways of doing it, but some way we need to get there.
So you've been the Washington cares fund has been around for how long now? Four units,
what was enacted in 2019. We start collecting premia we start collecting premiums this summer. Okay, we start paying benefits three years ago.
Okay. So is it is it too long of a time to wait 20 years for a federal policy to come into place?
Because of the because of the urgency with regards to so many people aging? It is?
Yeah, you know, I wish to work in DC. So I'm just being realistic about how slowly things Yeah, yeah. It takes a while it takes a while for in Washington, DC for people to be to make a big change, like, Yeah, but you're right. The demographics are changing now, in the next 15 years, doubling of the page, population 85 or older. So sure, it would be great if we move sooner, it could happen sooner. I hope it does.
The Washington cares Fund helps to confront the current long term care workforce shortage and it supports care providers. Could this program change the infrastructure of how we provide and receive care?
You know, absolutely. It's, you know, any financing mechanism, you know, whether it's Medicaid or Medicare or or our program. When you bring a lot of new revenue into an industry system, it creates a sort of capital investment opportunities to invest in new systems, new types of providers, incentivizes new businesses to form to enter this space. And it creates opportunities for leveraging innovation to do things more efficiently. So if I were a provider of lots of care in our state, right now, I wouldn't be planning for this and making investments to to scale up to be prepared to meet the demands of our new population. So and we're also seeing you we're on the west coast here with Seattle is a hike Tech City, you know, we have a lot of Silicon Valley is on this honor coast as well. As you all know, there's so much innovation happening in the health space with your apps and assistive devices and things that measure and report out your health status, EKG readings and diabetes and blood pressure and all those types of things. So hopefully, we'll see innovations here, which mean that you don't solely have to rely on long term care workers, but you have other devices, which can maybe mitigate the worker shortage that we're going to happen it's area with some technology as well.
And I truly believe that and it's not just because like, I'm just like a millennial, but I truly believe that the technological applications of sensors and passive monitoring and, you know, be it you know, two way communications via iPads, they'll all of those things are going to be necessary to remove some of the human element and not just for multi generational homes, where families are caring for other family members, but like for, you know, companies like myself and others that are in the space that are providing services, there's just not enough people that want to participate as a caregiver as a profession, and make a career out of it. So we have to have Tech Tech applications, to be able to remove the human element and still be able to adequately provide quality care and scale those services.
Absolutely. I mean, if I had, if I had, you know,$10 million, I would be investing in this type of type of stuff. Because I mean, as you say, you highlighted a really interesting one, which is the two way iPad communication, that's useful both for if I have a long term care worker, a social worker, say or a nurse coming to the home, they could then liaise with a doctor, if necessary, right? It's part of a service. That's a great feature.
We know how destabilizing it is, for people with dementia, if they have to move around a lot and leave the home and go to a hospital or go to a doctor's office and then come back. The those kinds of changes in the environmental setting are destabilizing. The other aspect of it is just monitoring. For example, I was living in Washington, DC, my mom was in Florida, it would have been terrific if I could have had a camera in her living room to see her move around the house to see if she'd slipped and fallen for example, right? Or is she struggling to get by the furniture is she leaving the stove on that kind of thing. So I do think those are just some simple examples. But there, there's a lot of potential in this space.
So there is it takes it even a step further.
And I know that we don't need to spend this entire podcast talking about tech, but we're almost towards the end. And I feel like we should give it some credence. There is applications now where there's a sensor on say, for example, a chair, right, or let's just say it's a bed. So in the middle of the night, somebody gets out of bed, well, as soon as they get out of bed because of your sensor on the bed lights come on, and they light their way to a bathroom.
And then then a sensor comes on and in a hallway camera comes on. So it's never on unless they pass the sensor. And then here's the here's the part that is very interesting. On an app, you're monitoring the movement of your mom. But instead of her going back to bed, she decides I'm not tired. It's you know, I've slept enough, I'm going to go watch some TV in the living room. So you get a chair pad sensor that automatically states or that automatically shows that your mom is not in her bed, she's in her chair, she watching TV, you know, the TV's on. So like, there's so many applications that you can have to remove the human element and fit in here's the here's the kicker fit into that benefit that you guys have.
And it actually paid for the services because for a and this is me like living in the future.
I feel like somewhat like Elon Musk right now. So just don't hold it against me. You could have like an ADT call center, almost providing response teams when there's an emergency, but also just primarily providing remote monitoring all working on an algorithm and all somebody has to do is spend $5,000 on a package.
That's a great idea.
That's how I'm sold. I'll invest in your 32nd pitch. Yeah, no, absolutely. And because you know, it is kind of inefficient otherwise. So the way we've always done this is kind of inefficient, because I know it's my own mom, like often. You have to have someone there for four to eight hours a day, just in case something happened. Right.
Most of the time. They were just sitting next to her on the couch watching TV with her. So chip.
Yeah, yes. Yeah. So this is a more efficient way for sure.
Why is it so important that other states consider implementing similar programs for universal long term care?
Because Because with the aging of the popular, there's a couple things that have changed significantly that make this a new crisis. One is the aging of the population we've talked about. So the The whatever problems we're seeing now are going to get twice as bad over the next 10 years because of aging, because more and more people are going to be in their 80s. Right. The other part of it that we don't talk about, hardly at all, but it's happened to kind of invisibly in the last few decades is that the stay at home caregiver has virtually disappeared from our society, right? In the 50s. And 60s, you had a lot of families who would have one partner at home usually was the woman. And they she was taking care of the parents, the husband's parents, the kids, and aunts and uncles occasionally, like all of that, that that's rare. I mean, less than 10% of households have a stay at home caregiver anymore, because you people have to work in order to make ends meet, right. And so, because of those two phenomenon, phenomena, when a long term care need hits now, and it hits much more frequently than it used to, it can devastate a family's finances, it can. And it's not just the finances. also psychologically, when children become the parent, a parent becomes a child, it's reversal of the of the relationships we all grew up with, can be really jarring for a family. It's much better for the families in our states if they can spend the older years of a parent as a companion talking with them spending meaningful time together, instead of having to provide long term care to their own parents. And so I think all the states across our country, because we all care about our families should be concerned about protecting our families from being really hurt by the being unprepared to cope with this challenge. Absolutely.
So we always like to end the show with a call to action. What's the most critical piece of advice you'd share with someone as they begin to plan for long term care?
It's a great question. I think people underestimate the how expensive long term care can be and what a what a crisis it represents. For a family when they need hits. It can be like I said, a diagnosis which is traumatic for a family, it can be falling, my dad fell down the stairs and ended up in the ER almost passed away from the fall itself. When that happens, it happens in an instant, the diagnosis or the fall, and suddenly everything is transformed. And at that moment, you need money, you need a good deal of money immediately. To prevent your situation could deteriorate quickly. If you don't get the care immediately, you could fall again the next day, you could end up going to the ER and never leave the hospital. And so having money for through a program like walk cares or in other states that don't have what cares, it could be private insurance, having that available, so that one that needs strikes, you can respond immediately and get a home care aide in place, for example. So things don't get worse. It's really important for the individual who needs the care.
And it also gives the family time to catch their breath and develop a plan. Like our benefit isn't going to solve all of everyone's needs. But it gives you about a year for the kids to come together and the spouse if the spouse is still alive and and figure out what is our plan for after this year. But for the first year, you've got some security and so I would say you know, either, you know, try to get a program like this in your own state. And if you can't just make sure that you have some money available so that you're not caught off guard.
Thank you for joining us on this episode of Now or Never Long-Term Care Strategy with Kosta Yepifantsev.
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Today’s episode was written and produced by Morgan Franklin.
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