State Long-Term Care Programs

Washington has established the nation’s first state-operated long-term care program, funded by employee payroll contributions. Benefits became available to eligible Washington workers on July 1, 2026.

California studied whether a statewide program could help its residents meet future extended care expenses. No California payroll tax and no mandatory program has been enacted.

The discussion nevertheless raises a planning question worth answering on your own terms:

Washington State: The WA Cares Fund

Washington employees generally contribute 0.58 percent of gross wages. Unlike Social Security, the contribution is not subject to a wage cap, so the cost rises with earnings. A worker earning $100,000 contributes approximately $580 a year; a worker earning $300,000 contributes approximately $1,740.

For 2026, the maximum available benefit is $36,500 over the participant’s lifetime, subject to contribution and eligibility requirements. The benefit amount is adjusted annually for inflation.

Washington allowed workers who held qualifying private long-term care insurance before November 1, 2021, to apply for a permanent exemption. That application window closed on December 31, 2022. Purchasing private coverage today does not create a new Washington exemption.

California: Studied, Not Enacted

California created a Long-Term Care Insurance Task Force in 2019 to examine whether a statewide long-term care program was feasible, and how one might be designed.

The Task Force reports considered several possible structures, including mandatory participation with an opt-out for residents who already own private coverage, and payroll-based financing. Those were planning alternatives presented for legislative consideration — not enacted law. No one can presently say what private coverage, if any, would qualify for an exemption under legislation that has not yet been written.

Why the Discussion Still Matters

A state program of the kind California studied is intended to provide a basic level of assistance. It is not intended to pay the full cost of an extended care event. The Task Force examined designs that would offset only part of a household’s expenses.

That distinction matters in California, where several years of home care, assisted living, memory care, or skilled nursing can place substantial pressure on:

• Retirement income
• Investment portfolios
• The inheritance you intended to leave
• A healthy spouse’s financial security
• The time and wellbeing of adult children

A public benefit may help. It should not be mistaken for a complete plan.

Public Benefits and Private Coverage Serve Different Purposes

A state program and a privately owned policy are not substitutes for one another. Depending on how it is designed, private coverage may provide:

• A substantially larger monthly benefit
• Benefits payable for several years, or for life
• Care at home, in assisted living, or in a skilled nursing facility
• Inflation protection
• Joint benefits covering both spouses
• A death benefit if care is never needed
• Benefits that remain in force if you move to another state

Benefits, limitations, and guarantees vary by policy, and coverage is subject to medical and financial underwriting.

Do Not Buy Coverage Solely for a Possible Tax Exemption

Private coverage should be evaluated first on whether it provides meaningful protection for your family. No one can promise that a policy purchased today will satisfy the requirements of legislation that has not yet been written.

Planning earlier is still valuable, for a different reason. Premiums and eligibility are driven by age and health, and future insurability cannot be guaranteed.

Questions Worth Answering

1. How much monthly care could our retirement plan absorb without changing how we live?
2. How long could we pay that cost before it disrupted our income or our investment strategy?
3. Would one spouse remain financially secure if the other required care for several years?
4. Do we want to rely on family members to coordinate or provide that care?
5. Would traditional, hybrid, or asset-based coverage better suit our objectives?