What Washington’s LTC Trust Act Means for Home Care Businesses

On May 13, 2019, the Long-Term Care Trust Act was signed into law, and the state of Washington became home to the nation’s first publicly-funded insurance program for long-term care.

Funded by a 0.58 percent wage tax starting in 2022, this Long-Term Care Trust Act will provide up to $36,500 in benefits for people who need assistance with at least three activities of daily living (ADLs) such as bathing, toileting, transferring, dressing, or eating.

How will this impact home care providers?

More Patients Opting In

Business is going to get better. In-home care is already the most affordable option for the aging population, despite the fact that Medicare doesn’t cover long-term care. On average, even non-medical home care services cost $4,004 per month for seniors whose caregivers work 44 hours per week, according to the latest Genworth Cost of Care survey. Long-term care is the biggest financial risk most people face in their lifetimes.

Experts are anticipating a boon in Washington’s home care industry—more so than other post-acute service providers—directly resulting from this insurance program. Consumers already prefer to age in place rather than in nursing homes.

“I believe that most of the utilization will actually go into home care because studies have shown that most prefer to stay in their homes for as long as they can,” Jeff Wilberg, local industry leader and CEO of Liberty Lake, Washington-based Family Resource Home Care said. “Given this particular program, it’s really going to facilitate that choice. The Washington state benefit will give [providers] the ability to serve more people without the cost being a barrier.”

State Licensing Regulations Creating Barriers to Entry

Besides lowering the cost barrier to accessing in-home care, the Washington measure also requires potential home care providers to be licensed by the state. The Washington State’s Office of the Insurance Commissioner stipulates the following on the official website:
“Before you can transact long-term care insurance or long-term care partnership policies in Washington state, you must:

  1. Hold a producer license with the disability line of authority,
  2. Complete an approved initial 8-hour LTC course, and
  3. Maintain your LTC education by completing a 4-hour refresher course every 24 months.”

What does this mean for your business? You’ll see unlicensed providers disappear from the market while legitimizing your own businesses. These licensing regulations also mean that patients will receive a safer and more regulated experience.

Easier Expansions to Other States

In many ways, the home care industry is teetering at the edge of a new national era. More and more states are beginning to recognize the value of home care services, since they not only help their citizens age more comfortably, but also reduce hospital readmissions and trips to the emergency room. This, in turn, helps reduce Medicare spending. Projections calculate that the Long-Term Care Trust Act will save Washington taxpayers $19 million in the first year of operation (2022), $368 million in 2050. By 2052, the projected savings are over $3.9 billion because the program would help people pay for care before they impoverish themselves to receive Medicaid.

These are significant savings and Washington is just the start. States like California, Michigan, Minnesota, and Illinois are also looking to create similar measures to the Long-Term Care Trust Act.

“Washington State, once again, is at the head of the pack,” Washington Governor Jay Inslee said during the signing of the Long-Term Care Trust Act, “when it comes to policies that help working families and provide much-needed security when it comes to their healthcare.”

Things are certainly revving up for the home care industry, and when other states follow in Washington’s footsteps, that means that business in other states will increase as well.

About Right Way Medical

Right Way Medical provides supply, logistic, technology, biomedical and financing solutions to alternate site, long-term care and specialty pharmacy healthcare providers through an innovative suite of products and services combined with the highest level of customer service. Founded in 2014, Right Way Medical has become a trusted name in the infusion industry, and focuses everyday to continue to earn that trust and provide its customers with the ideal experience in acquiring healthcare related products and service.

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