State long-term care fund projected to be solvent over long term

State Department of Social and Health Services

News release

WA Cares Fund, Washington state’s long-term care program for workers, is projected to be fully funded through June 30, 2098, according to a new study published Oct. 24 by the Office of the State Actuary.

Findings in the updated study, conducted by actuarial research firm Milliman, show that the fund will be fully solvent over the long term under most scenarios including the best-estimate scenario. This means WA Cares is on solid financial ground as it prepares to launch next July and is good news for the many Washingtonians who will need long-term care in their lifetime.

The WA Cares Fund is Washington’s first-in-the nation universal long-term care insurance program. WA Cares makes long-term care accessible for all working Washingtonians as they age — strengthening Washington’s position as one of the best places to live, work and retire.

WA Cares Fund is entirely self-funded by worker contributions and investment earnings on those contributions. Working Washingtonians pay a small portion of their income into the fund during their working years in order to access a $36,500 benefit (adjusted annually for inflation) to help them pay for long-term care services when they need them.

“Seven in 10 of us will need long-term care one day, and most families are financially unprepared to cope with this challenge,” said Benjamin Veghte, Ph.D., WA Cares Fund Director. “Starting in July 2026, Washingtonians who have earned WA Cares benefits and need assistance to live independently due to common life events such as dementia, a serious injury from a fall, or a severe illness will have help. This will make it easier for middle-class families across our state to cope with one of life’s most challenging chapters. WA Cares’ strong financial position means that our children and grandchildren will also be supported by WA Cares and able to age with dignity and independence.”

Key takeaways from the report include the following:

• Under most scenarios evaluated, including the best-estimate, base plan scenario, the program’s premium assessment of 0.58% ($0.58 per $100 of earnings, or about $24/month for the typical covered earner making $50,100/year) is projected to keep the WA Cares Fund solvent over the entire projection period (through June 30, 2098).

• The report considers a broad range of potential scenarios. In some of those scenarios it is possible that, without corrective action, the premium rate required to fund the program over the long term could exceed the current statutory premium rate of 0.58%. It is also important to note that actual results will vary from the projections in the report. The Long-Term Services and Supports Trust Commission, the WA Cares Fund oversight body, utilizes a Risk Management Framework that requires the Office of the State Actuary and the LTSS Trust Commission to continuously monitor the program’s finances. This ensures that any risks are identified promptly, giving the Commission and the Legislature ample time to adjust the program as needed to stay on course.

WA Cares premium collection will begin in July 2023, with benefits becoming available in July 2026.