The Shocking Truth About Long-Term Care: What Washington Public Employees Need to Know Now

Picture this: After decades of serving the public in Washington state, you're enjoying a well-deserved retirement. Your pension checks are steady, and life is good. Then, the unexpected happens – you need help with daily activities like bathing or getting dressed. Suddenly, your comfortable retirement savings start draining away at $8,000 per month for in-home care.
Scary? Yes. But here's the good news: You can prevent this nightmare scenario with smart planning today.
The Hidden Threat to Your Retirement Dreams
Here's a truth that many don't realize: Your pension alone won't protect you from one of retirement's biggest expenses – long-term care.
Consider these eye-opening facts:

• 7 out of 10 adults over 65 will need long-term care at some point
• The average nursing home in Washington now costs $146,000 per year
• Medicare won't cover most of your long-term care needs

Let those costs sink in.
Why Your Pension Isn't Enough (And What to Do About It)
As a Washington state employee, you've got a solid pension coming. That's great! But here's what they don't tell you: Your PERS or LEOFF pension wasn't designed to handle long-term care costs. Even with careful saving, one extended health crisis could wipe out decades of retirement planning.
The Real Cost of Care in Washington
Let's break down what long-term care actually costs in our state:

• In-home care aide: $91,520/year
• Assisted living facility: $73,650/year
• Nursing home (private room): $164,250/year

And these costs are going to continue to rise.
Your Protection Options: More Than Just WA Cares
You've probably heard about the WA Cares Fund. Starting July 2023, you're paying 0.58% of your salary into this program. For someone earning $60,000, that's $348 per year.
But here's what you really need to know: The maximum benefit is just $36,500 (though it will increase with inflation). That would cover about three months in a nursing home at today's rates.
Beyond WA Cares: Your Protection Options

1. Traditional Long-Term Care Insurance
   • Pros: Comprehensive coverage, flexible care options
   • Cons: Can be expensive, premiums may increase
   • Best for: Those who can afford the premiums and want more coverage than WA Cares provides
2. Hybrid Life Insurance/Long-Term Care Policies
   • Pros: Provides death benefit if you don't need care, premiums don't increase
   • Cons: Higher upfront costs
   • Best for: Those who want guaranteed premiums and life insurance coverage too
3. Health Savings Accounts (HSAs)
   • Pros: Triple tax advantage, can be used for various medical expenses
   • Cons: Annual contribution limits, must have eligible health plan
   • Best for: Those who want to save tax-free for medical expenses
4. Self-Insurance Through Savings
   • Pros: Complete flexibility, no ongoing premiums
   • Cons: Requires significant savings
   • Best for: Higher-income employees who can save substantially

Important WA Cares Eligibility Requirements
To qualify for WA Cares benefits, you must meet specific criteria:

• Work and contribute for:
  • At least 10 years without a break of 5 or more years, OR
  • 3 of the last 6 years at the time you apply for benefits
• Need help with at least 3 activities of daily living
• Be at least 18 years old and live in Washington state when receiving services

Your Action Plan: 5 Steps to Take Now

1. Calculate Your Personal Risk
   • Look at your family health history
   • Consider your lifestyle and health factors
   • Use the Genworth Cost of Care Calculator to estimate costs
2. Review Your Current Coverage
   • Understand your WA Cares benefits
   • Check if you have any existing long-term care coverage
   • Know what your health insurance and Medicare will (and won't) cover
3. Assess Your Gap
   • Compare potential care costs with your current coverage
   • Factor in your pension and other retirement income
   • Determine how much additional protection you need
4. Explore Your Options
   • Get quotes for long-term care insurance
   • Look into hybrid policies
   • Consider opening an HSA if eligible
5. Create Your Protection Strategy
   • Choose the best combination of options for your situation
   • Set up automatic savings if self-insuring
   • Review your plan annually and adjust as needed

Special Considerations for Washington Public Employees
As a public employee, you have unique advantages and challenges:

• Your pension provides stable retirement income
• You have access to the state's Deferred Compensation Program
• The WA Cares Fund is mandatory for most employees
• You may have special insurance options through your employer

Looking Ahead: Future Changes to Watch
The long-term care landscape in Washington is evolving and a WA Cares Fund initiative is currently being voted on.
Making the Most of Your Options
Remember these key strategies to maximize your long-term care protection:

1. Combine Multiple Approaches
   • WA Cares can provide a foundation
   • Private insurance can fill gaps
   • Personal savings add flexibility
2. Start Early
   • Insurance premiums are lower when you're younger
   • More time to build savings
   • More options available while healthy
3. Review Regularly
   • Assess coverage annually
   • Monitor policy changes
   • Adjust as your needs change

Your Next Steps
Don't let long-term care costs derail your retirement dreams. Here's what to do this week:

1. Calculate your estimated long-term care costs using Genworth Cost of Care Calculator.
2. Review your current retirement savings and insurance coverage.
3. Schedule a consultation with a financial advisor who understands Washington state benefits.

Remember: The best time to plan for long-term care is now, while you're healthy and have options. Your future self (and your family) will thank you.

-Seth Deal