A New Way to Help Pay for Long-Term Care

Takeaways

• The WA Cares Fund is Washington state’s public long-term care insurance program, funded by a 0.58 percent payroll tax.
• Eligible workers can receive a lifetime benefit of up to $36,500 for services such as in-home care, respite care, home modifications, and adult day programs.
• WA Cares is designed to supplement other resources, not cover the full cost of long-term care.
• The program is being closely watched as other states and Congress consider new ways to help families pay for long-term care.

When we’re young, the idea of needing help with everyday tasks such as bathing, dressing, or eating seems so distant that it’s hardly worth thinking about. However, most of us will require this kind of assistance at some point in our lives. In fact, an estimated 70 percent of Americans will need long-term care.

With such a large percentage of Americans needing long-term care services, you would think we’d have a safety net to pay for this type of care, but we don’t. Medicare covers very little beyond short-term rehab. Medicaid will pay for long-term care but only after a person has spent down most of their savings. And private long-term care insurance has become so expensive that fewer people are buying it.

This year, Washington state became the first state to try filling that gap with a public insurance program of its own. The idea is now drawing attention from other states and Congress.

How Washington State’s Program Works

The program is called the WA Cares Fund, or WA Cares. It’s funded by a small payroll tax, which amounts to 0.58 percent of wages, that employees in Washington state have been paying since 2023. Unlike private long-term care insurance, there’s no health screening and no one can be turned away for a preexisting condition.

The lack of affordable ways to pay for long-term care can create difficult choices for families. Without a plan for long-term care expenses, older adults may need to rely on relatives, use retirement savings faster than expected, or turn to Medicaid only after meeting its financial eligibility limits.

WA Cares began paying out benefits on July 1, 2026. Workers who have contributed for at least three years can access the full lifetime benefit, currently set at $36,500 and which is designed to rise with inflation over time. That money can be used for a range of services, including in-home care, adult day programs, home safety modifications, respite care, and even paying a family member who provides care. To qualify, a person generally must require help with at least three activities of daily living.

The benefit isn’t meant to cover the full cost of long-term care, which can easily run into six figures a year for nursing home stays. Instead, it is a foundation: enough to pay for a modest period of home care, delay a move into a facility, or supplement savings, private insurance, or Medicaid.

Workers who leave Washington can choose to stay in the program, though benefits for people living out of state won’t be available until 2030, and the process for them is somewhat different. Recent changes to the law also created a pathway for older workers who are closer to retirement to earn a partial benefit and set up a framework for private insurers to sell supplemental policies designed to build on top of WA Cares coverage.

A Federal Version, With a Different Approach

In Congress, Representatives Tom Suozzi, D-N.Y., and John Moolenaar, R-Mich., have introduced a bipartisan bill that takes a different approach. Rather than a state-run benefit program that workers draw on early, their proposal would create a federal catastrophic insurance program in which older adults with disabilities would pay for care out of pocket or through private insurance for the first several years and then become eligible for a monthly federal benefit.

The two approaches reflect different philosophies about who most needs help. WA Cares provides a smaller benefit to a broad group of people, including many who will need only modest, short-term support. Meanwhile, the federal catastrophic proposal would target a narrower group facing the most severe and expensive care needs.

Supporters of the federal bill acknowledge that passing new federal spending legislation is a heavy lift in the current political environment, particularly as the Trump administration has pursued deep cuts to Medicaid, which many people currently rely on for long-term care once their savings run out.

Why This Matters Beyond Washington

Economists and state policymakers around the country are watching how WA Cares performs now that it is actually paying claims. Because the private long-term care insurance market has shrunk so dramatically over the past two decades, several other states have discussed similar public programs, and Washington’s rollout is likely to serve as a real-world test case, both for what the program can cover and for the practical challenges of administering it.

For individuals and families, the larger takeaway is less about any one program and more about the size of the gap these proposals are trying to address. With Medicare offering minimal help, Medicaid requiring near-poverty first, and private insurance out of reach for many, long-term care expenses remain one of the biggest unplanned financial burdens older adults and their families are likely to face.

New public options like WA Cares don’t eliminate that risk, but they represent one of the first serious attempts to spread the cost of it more broadly.

Additional Reading

For additional reading on issues related to long-term care, check out the following articles:

• Elimination Periods and Long-Term Care Insurance Cost
• Discussing Long-Term Care With Older Adults in Your Life
• Who Should Buy Long-Term Care Insurance?
• Don’t Rely on Medicare or Medicaid to Cover Long-Term Care Services
• Can Life Insurance Affect Your Medicaid Eligibility?
• Long-Term Care Costs Are Hollowing Out Generational Wealth
• 2026 Medicaid Long-Term Care Benefits When You Are Married
• Can Oregon Launch Universal Health Care in the U.S.?