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Message from Tobe:

Washington was the first state to institute a mandatory payroll tax to fund LTC. The program had a bumpy start, and some say that it is still in need of further refinements, but it has been up and running since July 1, 2023. Other states are looking into what a program might look like for their state. These states may not follow the same model as Washington, but all of them are looking into ways to make LTC accessible in an affordable way. We don’t have a lot of specific information at this time as to what each state is considering, but the states that are considering some kind of an LTC public policy initiative are: California, Connecticut, Illinois, Maine, Massachusetts, Michigan, Minnesota, New Hampshire, New Mexico, New York, North Dakota, Oregon, Pennsylvania, Utah, and Vermont. California is far ahead of the other states. They already had a task force appointed, a consulting firm engaged, and a formal report that is already with the California legislature.

With the Washington program, a legitimate way to “opt out” of the payroll tax was to have a LTCi policy in force. Unfortunately, this “opt out” wreaked havoc with the LTCi market in Washington. Residents flooded in droves to submit applications to secure LTCi before the required deadline. One LTCi company told us that they had more applications in one day than what they usually received in one month! This surge of new business overloaded the LTCi companies, with many of them shutting down the writing of any new business in Washington. This is still very recent history, but the lesson to be learned would be to have a conversation with your clients about consider purchasing LTCi sooner rather than later.

“Q & A” of the Month:

Q: I bought a LTCi policy back in 2004 when I was 51. I have been splitting my time between MA and Spain for the last 10 years. I am now planning to retire to Spain where my wife is from. If I need long term care while I am living in Spain full time, will my LTCI policy pay out benefits?

A: The answer is generally “Yes”, that your LTCi policy will provide some amount of international coverage, but the range from what one company provides to what another company provides is huge. Some companies pay benefits for as little as 30 days, while others pay the same benefits internationally as in the U.S. Another thing to know is that some companies limit their benefits internationally to facility coverage only. The Table of Contents of many LTCi policies includes a listing for International benefits. I would review the information in the policy first and then reach out to your agent with this question so that you can better understand what will be available to you.

Yours in success,
— Tobe Gerard