Long-Term Services and Supports Trust Act by Catherine Kinnaman

Long-Term Services and Supports Trust Act by Catherine Kinnaman


My name is Cathy Kinnaman I’m the deputy director
for our home and community services office which is part of the Department
of Social and Health Services in Washington State and like my bio said I
have been involved in healthcare for probably 26 years on and off I’ve worked
in the local DSHS offices delivering various benefits. I’ve worked for our
healthcare authority which is our main Medicaid agency and then I came over to
the home and Community Services office in 2013 so that said I will jump in.
Thank you Minnesota for inviting us so I’m sure some of this these are numbers
are going to be familiar just from professor Cohen’s presentation but this
kind of looks at across the halls nationwide what’s driving some of the
state innovation and I’m sure Minnesota and other states are all facing the same
issue there is this national trend in the aging population that the 65 and
over population is going to more than double and the 85 and older population
will more than triple by 2015 and while that’s wonderful that we’re all living
longer. How are we going to pay for those long-term care services that we know we
will eventually need? So, what’s driving the state innovation for us is that
increased demand for services most of us are going to need long-term services and
supports we know that about 7 in 10 individuals over the age of 65 will need
those services and supports but we still face challenges and like Professor Cohen
indicated we know we have to spend down to Medicaid. For Washington there’s a
$2,000 limit to be able to qualify for Medicaid funded long-term care we also
know that Medicare doesn’t cover most long-term services and supports will
cover a nursing facility care but it does not cover community-based care.
We also know that we’re going to need to support families in caring for their
loved ones. We have 40 million caregivers nationwide providing 470 billion
dollars annually in unpaid care and care ranges from bathing, dressing, paying
bills transportation, I’m sure many of your very personally familiar with the tall
and the impacts of caregiving for a loved person. There’s also other
impacts for the person that’s providing care there’s that loss of earning
potential. There’s decreased savings for retirement there’s impacts on
their ability to care for their own children’s needs and
there’s increased healthcare costs due to the stress and burden that they
experience in the caregiving role. We know it’s good public policy to support
these unpaid family caregivers because not doing so impacts their health and
well-being and it also would have an immediate impact on our Medicaid
spending so this slide just looks at the pathway to Medicaid, the economic and
health impacts. It’s really not if it’s when we will need to turn for long-term
care or need to turn to Medicaid and our families are overburdened
with providing care. In Washington the long-term care insurance market is
failing. Most of our insurers have pulled out of the market of the few that are
remaining I was talking with the Insurance Commissioner’s Office just
recently and they believe that there’s another three companies that may be
pulling out of the market within the next three to five years due to
insolvency issues. We know we can’t rely on long-term care insurance. More than 90
percent of Americans are uninsured for long term care Medicare doesn’t cover it
and our personal savings levels are not enough our average senior retirement
savings one hundred and forty eight thousand dollars if you’re lucky the
average life cost of long-term services and supports over
two hundred and sixty thousand dollars. Clearly there’s something here that does
not add up and we’re familiar with how states pay for Medicaid and you can see
that sorry for long-term care Medicaid is the payer in over fifty percent of
the costs of spending in this arena. There’s about twenty one percent that
have other public benefits available. We have private insurance which is a eight
percent probably less as the premiums become more and more costly and out of
the reach for most most Americans and then around twenty percent of folks will
have to pay for long-term care services out-of-pocket. So, what I’m really here to
talk to you about is the approach that Washington took and the passage of our
Long-term Services and Supports Trust Act that passed in January of last year.
You’ve probably seen news articles about this. Maybe. We’ve been going out all over
to many many states talking about the approach that Washington’s. Taken there’s
lots of interest I’m sure that’s why Minnesota invited us here today and we
are the first state with a public long term care program. This particular slide
is very really mirrors the first one that I showed you which was the national
statistics. This one is Washington specific and it’s a projected growth of
older populations in Washington as a percentage of the 2012 population and
they think the you know as you can see the largest growth rate is the
population aged 85 and older and so how are we going to continue to afford to
pay for care and that’s something our legislature has been thinking long and
hard about. We had a long-term care Commission that was looking into this
for three to probably the last five years I would think they’ve been
convening lots of forums on how to do long term care financing very similar to
you know what you’re doing here in Minnesota today with lots of
presentations I remember actually going up there and presenting on the long term care partnership policies in Washington when
they when they went into effect so it’s been quite a while that we’ve been
looking at this issue and and struggling with what what to do knowing that the
budget is unsustainable for us moving forward. So, in January 2019 the legislature passed House bill 1087 and Senate bill
5331 with bipartisan sponsorship and support and our governor Jay Inslee
signed the bill into law on May 13th 2019. It established a long-term services
and supports trust to help individuals pay for their long-term care. Many of our
stakeholders and partners were vocal in their support for the bill so what the
law does is it really builds on Washington’s strengths. Some of the
factors that we have in place in Washington is we have a high-performing
LTSS system by AARP. We’re thirty-fourth in the nation for long-term care costs
to the state which is quite conservative. Over 86 percent of Medicaid recipients
receive services in their own homes or local community residential settings so
Washington really is a rebalanced state with around 10 to 12 percent of folks
receiving care in nursing facilities So, we were looking at what do you do
next when you are a rebalanced state where where do what’s the next step to
go and we also have a professionalized long-term care workforce. They have a
state union that represents them and they have pay and benefits, retirement
benefits, and the whole the whole nine yards for our workforce. We just
implemented in January of this year it just went into effect this last week a
paid Family Medical Leave Act and I have staff who are taking advantage of it
already. So, that’s awesome and then we have a fully integrated payment system
so our provider one system handles both medical claims and Social Services
claims in the single system So, how is it gonna work? I’ll get into
more details but bottom line is the Washington workers are going to pay up
to 58 cents per hundred dollars of their income into the trust. Every W2 worker
contributes so if you’re an employee you will contribute and those payments will
start coming out of your wages. The employers do not contribute in
Washington. If you’re self-employed you can opt into the trust to get benefits
and if you have long term care insurance you can opt out of the trust so we do
have some opt-in opt-out features I’m not going to say they’re the best
solution and I think that’s probably something the legislature is going to
come back and take a look at in the next session. There will be a trust Commission
that will pull together and they will determine the rate of pay. I will say the
bill is silent on our tribes. We have 29 federally recognized tribes in
Washington at this point the bill does not talk about how this will impact the
tribes so we will be having more conversations around that. So what does
the benefit do? In the first year each person who’s eligible to receive the
benefit can access services costing up to thirty six thousand five hundred dollars
and the value of this benefit is indexed to inflation and so will increase over
time. The benefit was actually based on a hundred dollars a day for 365 days
that’s where that that figure came from. It can be used for a range of services
and supports including professional care in your own home, licensed residential
facility or nursing home, adaptive equipment, and technology like wheelchair
ramps, medication reminder devices, home safety evaluations, training pay and
support for family members who provide care, home-delivered meals, rides to the
doctor etc., and one of the things that we’ve been really looking at is
has to be really important that this is an insurance benefit and not a Medicaid
or welfare type benefit and so as we’re thinking and we’re having conversations
about how do you implement this one of the key things we’re bearing in mind is
that this benefit has to be flexible. You know I would like to see it like you can
go spend you can go buy things on Amazon if you want you don’t have to go through
you know you don’t have to go through a Medicaid certified provider to be able
to get benefits so you know I don’t know that it’s going to be the cash benefit
that Professor Cohen would prefer but I would hope that it would be a very
flexible benefit that would help families be able to choose which
services they receive and when they receive those services so how do you
become eligible for the benefits that are available under the trust and so to
receive those benefits you must have worked and there’s two criteria here
which took my took me a while to get my head wrapped around about why they were
the two criteria but it’s at least three of the last six months or ten years
without a break of five or more years and at least 500 hours per year during
those years and you’re eligible if you need assistance which with at least
three activities of daily living so the three out of six years was to capture
people like me who may want to retire within the next five years or so and
would have been able to pay in so once you know those folks who are nearing
close to retirement now if you can hold on for three more years you can get into
the trust you can get into the trust benefit. Premiums will start to be
collected actually in January of 2022 and the first benefits will
be available for folks in January of 2025 so we really don’t have a whole lot
of time to get this thing up and running. So, the bills created a Trust Commission
and the Commission is in the process of being established. We have nearly all of
the members appointed to it we’re just waiting for a couple more and the
Commission will first meet in April of this year it will comprise of
legislators the administering agencies and stakeholders I have a more
convincing list on the next page so you can see who’s involved. There will be 21
members and then there will also be a trust council that will be responsible
for the annual benefit adjustment and they will have to meet at least once
annually to look at that. There’s also an investment strategy subcommittee and
they’re responsible for developing the strategy for investing the trust funds.
The Commission does not have decision-making authority but it does
have an advisory function for agencies and for the legislature and this slide
really gives you a much more in-depth in detailed list of who is going to be part
of that Trust Commission. We have four state senators and four Washington state
representatives the Commissioner of our Employment Security Department the
Department of Social and Health Services secretary the Health Care authority
director and the Health Care authority in Washington is the Main Medicaid
agency for our state. We’ll have representatives from our areas agencies
on aging the homecare association the unions who represent the long-term care
workers that I was talking about an organization representing retired people
an association representing nursing homes and assisted livings
an association representing adult family homes to individuals who are receiving
LTSS services a worker who is paying the LTSS premium and an organization of
employers whose members collect the premium so the legislature really wanted
to make sure we had good representation of people’s voices within the Commission.
Some of the things that the Commission is going to be doing is looking at that
criteria for determining who’s a qualified individual. The minimum
qualifications for our providers the payment maximums each service,
any rule changes that are necessary to be able to operate the
program, and then actions necessary to make sure that the trust remains solvent.
There’s a whole long list here I can keep reading if you like that we can go
over that towards the end. One of the things that they’re also looking at is
whether or not to extend coverage to individuals who became disabled before
the age of 18 and one of the things that the trust did not include was benefits
to people with developmental disabilities and and that was kind of a
sticking point that they want to go back and revisit and I think part of that is
to do with you know the risk of covering folks who were disabled at a very young
age. So, the legislature was really clear that they didn’t want to spend a whole
lot of money bringing up a whole new infrastructure to support the trust so
the administration of the trust is going to be an interesting governance of four
different agencies state agencies so we have the Employment Security Department
and they’re going to be collecting the premium and tracking the status of the
vesting and we just met with our Employment Security folks and as I said
they just brought up the paid Family Medical Leave Act in Washington they’re
calling this the paid Family Medical Leave Act Plus on steroids. So, they’re
thinking about how they’re going to use what they’ve already created to create a
similar payment mechanism for the trust and then we have our state Medicaid
agency and we’ll be using our provider one Medicaid claims system to process
the payments to providers through through the trust. They’ll also track the
benefit usage and do the coordination of benefits piece for folks that do have
other insurance options and then we have the Department of Social and Health
Services which is the agency that I work for and we will be establishing the
functional eligibility for the program so whether they meet the three ADL’s
that are required. We’ll be approving the providers getting the contracts for
those providers and we’ll staff the Commissions and
customers will provide the customer service kind of the front end for it so
folks will come through us. What I don’t want them to do is to have to go into a
local DSHS office and apply for a benefit. This is a benefit that
they have paid into as I said this is an insurance and so there needs to be a
different mechanism to how to access those benefits than there currently is
in place for Medicaid and we also work with our state actuary and they will be
doing auditing and evaluating the trust to ensure the solvency. Just on the side all
of the admin costs for the trust will come out of the trust benefit so there’s
no state dollars going in to pay for the administration of this program. Back on
that last slide one of the things that we heard a lot from from legal advocates
as we were pulling this together is if people have got thirty six thousand
dollars sitting in a trust benefit is that going to affect their eligibility
for Medicaid and so it was very clear this is not an individual account and it
does not affect their eligibility for Medicaid so I just mentioned that
because that was a big concern to our stakeholders as we were developing the
trust act. So, the numbers behind the law the premiums going to put between one
and one and a half billion dollars annually into the trust account.
Approximately 15,000 beneficiaries will be served the first year climbing into
over 40,000 in 20 years and just to give you an idea our our agency currently
does around twelve to fifteen thousand assessments a year so this is going to
double the volume of assessments that our agency will be doing. The benefit payout
is quite substantial it’s looking at five billion dollars in the first year
and the projected Medicaid savings in the first year is 34 million
dollars and 3.9 billion dollars by 2052 and that 34 million dollars is the
total cost so that’s both the federal and the state share.
So, where are we at? In 2019 we started the implementation work we’ve been doing
a lot of work with our Area Agencies on Aging I’m starting to think about what
that benefit will look like how it can be structured how do we make it flexible
how do we make it work with the payment system that we that we have been told we
need to use? In 2020 we’re really going to be starting that implementation and
then thinking about the policies the actuarial analysis and start thinking
about whether we have to write rules and what those rules would look like really
a lot of that let’s get this off the off the ground and get it going. In 2022
Washingtonians will start paying those premiums and so it’s surprising how many
people I talk to and they’ve never heard of it, or that the fact it’s going to
come out of their paychecks so I think part of what we’ll be doing is a big
outreach and public awareness campaign so folks are aware and are prepared for
when those deductions start coming out of those paychecks in 2022 and then as I
said in 2025 will be the first year that folks can start drawing out benefits
from under the trust. The Commission also has to report to the legislature in 2021
on these four topics basically the criteria for the beneficiaries and
providers and they have to provide the actuarial reports the recommendations to
remain solvent and recommendations on whether to amend the law to include
those individuals with developmental disabilities and so like I said that was one
of the things that people really had a lot of concern about with the way that
the language was written in the current law. So, some of the questions that we get
asked are probably questions that are on your mind and I’m sure you have many
more for me but I’ll just go over a couple of them here and so I’ll talk a
little bit about how the bill got developed and past like I said the 36,500
doesn’t seem like very much money but it’s a start and we can look at what
difference that will make at least looking at Washington state’s
costs and then what are our next steps towards implementation? What challenges
remain for Washington? As I’ve mentioned quite a few of them
there’s quite a few challenges that remain for Washington and so what are
the lessons learned for other states? Because I’m sure you guys will have lots
of questions about well what if we wanted to do something like that here in
Minnesota what what would we be looking what would we be looking at? So, it took
us three years to get this passed so I’m not going to say this was easy and it
was a done deal but it really was a lot of interest already. There was a
broad-based coalition formed to tackle long term care financing crisis and I
talked about some of the the work that had been done and then went going to
present to the legislature about some of our existing options and we also did
education and outreach we worked a lot we went and talked to legislators and
their staffers and we went and did you know forums around the state and
talked to a lot of folks to get a lot of input about what they would like and
what they would need in in a benefit like this and then the legislature between
2015 and 2016 they mandated a feasibility study and they think I’ll talk a little
bit about that but getting the results from that feasibility study really
helped us decide what was the path the right path to go. In 2017 the legislators
introduced the 2017 Long Term Care Trust Act and I think that was really just to
get people’s attention. It was to get it out there and get people to start
thinking about it of course it didn’t pass that first year so we went back to
the drawing board we worked with our actuarial folks in the analysis and so
we went back again and we tried in 2018 in 2018 we were this close. It got all the
way through and then it just timed out so at the very last minute there were
some concerns raised by AARP and it was really around the 75 hour training
requirement that Washington has for home care workers and what that impact would
on family caregivers who chose to provide care to their loved ones so what
the legislature did was they came back to us and they said they put a budget
proviso in it and they said please go away and do some more stakeholdering and
do some more studying and come back to us with some further recommendations
around that and then in 2019 it was passed of like I said last January was
very exciting had got through both committees hit the national media we got
an updated feasibility study and then we started developing our interim
stakeholder policy workgroup so lots of work to get that through. I think what
really helped us was we had a huge coalition of advocates that were working
with us. You can see folks up on here we had Leading Age we had AARP we had our
union for our workforce the SEIU Alzheimer’s Association Leading Age the
Elder Care Alliance whole bunch of folks that really got together and they
created like I said they created that budget proviso and they convened a
workgroup when they called it Washingtonians for a responsible future
and the workgroup met ten times and they did forms around the state and then they
met with legislators. Representative Jenkins who is the major sponsor of the
bill talked about the moral imperative to prepare for the future and help keep
people off of Medicaid and that was really a key theme in those forums as we
went around the state and started talking to folks is it’s not if it’s
when we need to do this and we need to do this now. We got a lot of voter
support and what was interesting it was across all age groups and so we did some
work obviously with our baby boomers on what they might need but there was also
a lot of work done with Millennials with younger folks 18 to 34
as you can see 83% voters in that age group supported this
bill that it was important and they could see the importance to them and to
you know to their families. AARP did a poll in the last year to gauge support for this kind of program
and then they testified in the hearing and shared this polling information and
I think it was that polling information that was really convincing to our
legislature that said you know this this is something that we can do and it
really kind of gave some authenticity to the premium amount and and what would be
tolerable by Washingtonians. I love this slide because it really shows that this
was a grassroots ground game the picture on the right the vote yes picture was
cookies that the workgroup the coalition baked and then they hand-delivered to
legislators on the first day of session last year and so they were up there
bombarding them with sugar which is a sure way this passed as quickly as it
did but we did have really strong coalition they did televise town halls
with Governor Inslee. They sent out 7500 emails plus they put full-page
ads in target legislators districts they had the hash tag prepare for care and
they sent six thousand petitions were delivered to the legislators with those
cookies so they were under no misrepresentation that
folks were and might not this was not something that they were not interested
in so I love these pictures that’s the Capitol building in Washington state
that the picture was taken in front of. So, that 36500 we said it didn’t seem like
very much but this is just some numbers that we came up with of what that might
look like and so you know for us in Washington that would pay for 25 hours
per week of in-home care for a year just quite a long time that would fill that
year gap. Pays for five to six months in a nursing home.
9 to 18 months in residential care such as an adult family home or assisted
living and up to 5 years a family caregiver support that includes respite
caregiver counseling and education home modification or adaptive equipment and I
don’t know if you’re familiar with Washington’s benefit but we do have a
current 1115 demonstration waiver and under that waiver which was very broad
based waiver but there were three major initiatives and the second initiative
was around long term services and support and using those federal dollars
we implemented a family caregiver support program and so we have two
benefits we have tailored supports for older adults which provides a benefit to
family caregivers who have family members who are not yet eligible for
Medicaid so they’re spending down for Medicaid so it was really kind of a
first for us and being able to provide federally funded paid services to folks
who are not Medicaid eligible and then we also have a benefit called Medicaid
alternative care which provides a similar benefit to folks who choose to
have their family caregiver and provide services rather than take a state option
that they would be eligible for and so those are two programs that we
implemented. This is year three of that and so we just enrolled our six
thousandth person into that program so it is growing incrementally as we talk so
that’s a really great option as well but family caregivers and is such a huge
support and so needed and so these these programs really wrap around that family
caregiver and help them. So, what are some of those lessons learned for other
states? I think number one is don’t be in denial on the need for and the cost of
long-term care we all know it’s expensive and accept that long-term care
costs are going to keep pressing on state budgets via Medicaid. You have to
realize it’s a not it’s not public or private or family or individual
responsibility it’s all of those together and I think professor Cohen made that really that point earlier that is you
can’t just pick one thing and you can’t just say is this one thing and it has to
fix everything it’s a piece of the puzzle and we have to keep pushing those
pieces of the puzzle together to make the big picture and then you really have
to do a political 101 think about looking at your starting point is your
state already leading on long-term care reforms? Which Minnesota is, and do you
have or can you develop those strong legislative champions and leadership and
I can see we have that in the room today from the questions and the
conversations that have already happened and can you build a broad strong
coalition? Can you bring others in and have them help you and take some of that
pressure off it doesn’t have to be the state that’s doing this have that
coalition and get that support wrapped around the benefit and I think the key
one like everything it’s all about the data. Arm yourself with sound actuarial data When they did that first
feasibility study they had two options that they were tasked to look at and one
was the social insurance model paid for by a tax and the other one was to try
and shore up the long-term care insurance in the private market. What the
actuarial study showed was this was just too expensive it was uncertain there was
no guarantee it would work and it would end up being a high-risk pool because
purchasing insurance is voluntary and it was using that actuarial data that the
legislature came to the opinion that we needed to look at the social model paid
for by the premiums. For Washington the hard work is just beginning we have a
short runway to implement but we’re ready we’re gonna roll up our sleeves
dig in and continue to share lessons learned along the way with other states
I hope we’ll be coming back here to Minnesota to present to you in another
couple years and let you know where we’re at and what’s
happening and what it took to get there I really hope you’ll invite us back and
thank you so much for inviting me to Minnesota. [Applause].

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