The state’s long-term care program, for which premiums began to be collected on July 1, 2023, is called the long-term services and supports (LTSS) trust program in statute. State law requires biennial actuarial audits of the program. The most recent actuarial audit was performed by Milliman in 2022. It estimated that the 0.58% premium rate was sufficient to maintain program solvency. (That said, the program would be insolvent under some scenarios and the estimates are highly sensitive to modeling assumptions.) According to the Office of the State Actuary, Milliman will publish an updated actuarial study in Fall 2024.

Two different bills are moving in the Senate and House that would make changes to the LTSS trust program.

SB 6072

SB 6072 was approved on Tuesday by the Senate Labor & Commerce Committee. The bill would adopt several recommendations made by the LTSS Trust Commission in 2023 and 2024.

The most significant change in the bill is that it would allow workers who move out-of-state to receive benefits. (Currently, benefits are not available for people who don’t live in Washington, even if they are vested in the program.) SB 6072 would allow employees who move out of Washington to continue participating in the LTSS trust program if they had paid premiums for at least three years in Washington and worked at least 1,000 hours in each of those years in Washington.

If they opt to continue participating, they would have to report their wages to the Employment Security Department (ESD) and continue to remit premiums. The bill states that once out-of-state participants opt in, they “may not withdraw from coverage.” However, ESD would be allowed to cancel coverage if the out-of-state participant doesn’t make payments.

Under current law, benefits for in-state beneficiaries will be available July 1, 2026; the bill would make benefits available to out-of-state beneficiaries as of July 1, 2030. To receive benefits, out-of-state individuals would have to need help with two activities of daily living due to a loss of functional capacity or have severe cognitive impairments. This is a different standard than applies to in-state beneficiaries. According to the LTSS Trust Commission, the standard for out-of-state benefits is a HIPAA-style threshold which would simplify administration.

Other provisions of the bill that have been recommended by the LTSS Trust Commission include:

• The bill would change the contribution requirement so that employees would have to pay premiums for a total of 10 years in order to qualify for benefits. (Under current law, an employee has to pay the premiums for a total of 10 years “without interruption of five or more consecutive years.”)
• The bill would increase the number of hours individuals would have to work during each of those 10 years from 500 hours to 1,000.
• Employees who are exempt from the program because they had private long-term care insurance would be allowed to participate in the program if they rescind their exemption by July 1, 2028. (Under current law, this group is permanently ineligible for the program.)
• Employees with nonimmigrant visas for temporary workers would be automatically exempt from the program. (Under current law, they have to apply for an exemption.)
• Active-duty service members engaged in off-duty civilian employment would be allowed to apply for an exemption from the program.
• The bill would allow the state to conduct a pilot project from Jan. 1, 2026 through June 30, 2026 that would offer access to benefits to up to 500 people. This would allow the state to test the program before benefits are generally available.
• The bill would add provisions on employer recordkeeping and premium reporting accountability.
• The bill would direct any savings realized from federal waivers to the LTSS trust account. (Current law requires the state to seek federal waivers so that the state can share in savings to Medicare and Medicaid that are generated due to the LTSS trust program.)
• The bill would set out requirements for private supplemental long-term care insurance policies.
• Benefits would be available if an individual’s need for benefits is expected to last for at least 90 days. (Under current law, there is no minimum amount of time.)

Additionally, under current law, the benefit unit “must be adjusted annually at a rate no greater than the Washington state consumer price index.” SB 6072 would mandate that the benefit unit increase with the consumer price index (CPI). (The 2022 Milliman study already assumed that benefit units would be increased by CPI.)

The Office of the State Actuary estimates (based on Milliman’s prior work) that SB 6072 would increase the LTSS premium rate by 0.03% to 0.05%.

SHB 2467

SHB 2467 was approved by the House Health Care & Wellness Committee on Tuesday. There is no fiscal note for the bill. Like SB 6072, SHB 2467 would allow employees who move out of state to continue participating in the LTSS trust program. This portion of the bill is very similar to the portability provisions of SB 6072, except that to qualify people would have had to work just 500 hours in each year in Washington (instead of 1,000).

Additionally, SHB 2467 provides that entities providing long-term care services to out-of-state beneficiaries could not discriminate based on race, gender, age, or preexisting condition.

Interestingly, the bill twice states that the extension of the LTSS trust program to out-of-state participants “will increase the state’s investment in long-term care services.” It’s not clear why it’s necessary to include such a statement. Perhaps it is meant as a signal to the federal government that LTSS benefits to out-of-state beneficiaries should be included in any calculation of Medicare and Medicaid savings due to Washington’s program.

The statement triggered a question for me: Can the LTSS trust account be used to provide benefits out of state? The statute creating the LTSS trust account (to which premiums are deposited) states, “the revenue generated pursuant to this chapter shall be utilized to expand long-term care in the state. These funds may not be used either in whole or in part to supplant existing state or county funds for programs that meet the definition of approved services.” (Emphasis added.)

Although portability would increase long-term care service spending, the spending would take place outside of Washington. To my reading, then, no LTSS trust account revenues could be used on long-term care outside of Washington.

That said, it’s very possible that the LTSS trust commission considered this possible issue and did not find it compelling. Additionally, in 2022, a federal court interpreted the above statutory provision quite differently than I interpret it (but the court did not get into the specific “in the state” question). Given that, maybe the statute could be read to mean that revenue has to expand net long-term care in Washington, but as long as long-term care in Washington is expanding, some portion of the funds could be used out of state.

(For more on the LTSS trust program, see our 2019 and 2021 policy briefs.)