State Long-Term Care Programs
Washington began paying benefits on July 1, 2026. California has no program, no payroll tax, and no deadline. Here is what each of those facts means for a California family.
Washington State is the first and, so far, the only state paying long-term care benefits from a payroll tax. Its program has been widely reported, widely misunderstood, and widely used in insurance marketing — including marketing directed at Californians who are not subject to it.
This page answers two separate questions. What does a state program of this kind actually pay for? And where does California genuinely stand today? The answers matter in opposite directions: the first explains why private coverage still has a job to do even where a state program exists, and the second explains why no Californian should be buying anything today to avoid a tax that does not exist.
Washington has now been paying claims for a month, so the first question no longer has to be answered in projections. The benefit amount, the qualifying threshold, and the way the state itself describes what the money does are all on the record.
In California today there is no long-term care payroll tax, no enrollment, no exemption, and no deadline of any kind. Any communication telling you otherwise is inaccurate.
of gross wages, no cap — collected from workers only
lifetime maximum in 2026, indexed each January
activities of daily living, against two-of-six in most private contracts
of a California private nursing home room is what the full benefit buys
The WA Cares Fund was enacted in 2019 and, after two delays, began collecting in July 2023. A pilot opened in January 2026 in four counties — Lewis, Mason, Spokane and Thurston. Applications opened statewide on May 18, and the first benefits became payable on July 1, 2026. It is a modest, universal benefit funded entirely by workers; employers collect and remit but do not contribute.
The ceiling is indexed to the Seattle-area consumer price index and adjusted each January 1, so $36,500 is the 2026 figure and the first adjustment falls due in January 2027. It continues to grow after a worker retires and stops paying in. An actuarial review completed in 2024 projected the fund solvent through 2099 at the current rate, which the statute caps at 0.58 percent.
It is worth being accurate about this program’s strengths, because they are real and they are not the ones usually described. WA Cares money is released to the approved beneficiary rather than billed by a provider, and it can be spent on a professional home care aide, on a qualifying family member — including a spouse — who provides the care, on home modifications such as ramps and grab bars, on meal delivery, on transportation to appointments, and on assistive equipment. There is no medical underwriting and no pre-existing condition exclusion.
In flexibility that compares well with many private contracts. The constraint is not what the money may be spent on. It is how much of it there is.
The clearest way to judge a state benefit is to spend it. The figures below are 2025 California statewide medians published in March 2026.
| Setting | California median, monthly | Months the full $36,500 covers |
|---|---|---|
| Adult day services | $2,037 | About 18 months |
| Assisted living | $7,000 | About 5 months |
| In-home care (44 hrs/week) | $7,627 | About 5 months |
| Memory care | About $8,800 (estimated) | About 4 months |
| Nursing home, semi-private | $12,167 | About 3 months |
| Nursing home, private room | $15,178 | About 2 months |
Memory care is not separately surveyed at state level and is an estimate. Bay Area costs run above the California median. Over the three years to 2025 the California private room median rose about 20 percent and assisted living about 17 percent.
A benefit of this size is real and it is not nothing. It is also, on California numbers, a matter of months rather than years. That is the point worth taking from Washington: a state program is a floor, and it was designed as one.
WA Cares states on its own website that for about a third of people the benefit could cover all the care they need in a lifetime, and that for everyone else it offers immediate relief and time to plan. That is a careful and honest description. It is also the argument on this page, made by the program itself: for roughly two people in three, the state benefit is the beginning of the answer rather than the answer.
| A state program of the WA Cares type | A private long-term care policy | |
|---|---|---|
| Benefit ceiling | Fixed lifetime maximum | Chosen at purchase; lifetime benefit available on some designs |
| Benefit trigger | Typically a higher functional threshold | Commonly two of six ADLs, or cognitive impairment alone |
| Who qualifies | Workers meeting contribution and vesting rules | Anyone who qualifies medically at application |
| Residency | Tied to the state, with limited portability | Follows the insured, subject to policy terms |
| Inflation | Benefit ceiling indexed by statute | Inflation protection selected and paid for at issue |
| If care is never needed | Contributions are not returned | Some designs return a death benefit or premium; others do not |
| Cost | A payroll tax on wages, for as long as you work | A premium, on a schedule chosen at purchase |
This is not an argument that a public program is a poor idea. It is an observation about scale. The two instruments are designed to do different jobs, and owning one does not answer the question the other was built to answer.
The clearest evidence that a state program is designed as a floor comes from Washington itself. The 2025 amendments directed the state’s Office of the Insurance Commissioner to establish a framework for supplemental private long-term care insurance — coverage sold specifically to sit on top of WA Cares. Those rules took effect on May 1, 2026, two months before the first benefit was paid.
The same legislation gave workers who had exempted themselves a one-time opportunity to rescind the exemption and join the program permanently, open from January 1, 2026 through June 30, 2028.
Washington is not treating public and private coverage as alternatives, and it is not treating its own program as sufficient.
Washington did allow workers to exempt themselves permanently by owning private long-term care insurance. That window required a policy purchased before November 1, 2021 and an exemption application filed by December 31, 2022. It has not reopened, and buying a private policy in Washington today exempts no one from the payroll deduction.
Roughly half a million Washington workers — about one in eight — exempted themselves during that window. The scale of that response is precisely why other states studying the model have been advised against offering a comparable window, which matters far more to a Californian than the exemption itself. Washington voters were separately asked in November 2024 whether participation should become voluntary; they declined, by roughly fifty-six percent to forty-four.
California studied a state program. It did not create one. The sequence is a matter of public record and it ends in 2024.
The Legislature may take the reports up at some point, or may not. If it does, it is free to adopt some, all, or none of what was recommended. Everything beyond that is speculation, and this page does not trade in it.
In August 2023 the California Department of Insurance issued a formal alert to agents and brokers about marketing that told Californians a payroll tax was imminent and that they should buy coverage before a stated date. The Department was explicit: any communication asserting that a public program will be enacted on a particular date is untrue, and is presumed to be a knowing violation carrying penalties of up to $25,000 per violation for a broker. If you have received a letter or an email urging you to act before a California long-term care deadline, you have my professional opinion on it in one sentence: there is no such deadline, and you should treat the source accordingly.
There is a real observation buried under the false urgency, and it runs the opposite way to how it is usually sold.
When the California Task Force considered whether to allow people with private coverage to opt out of a future program, it noted what had happened in Washington: a time-limited window produced a rush of applications in the months before the deadline. Its recommendation was that if any opt-out were permitted, the cut-off should be set at something like the date the Governor signs the legislation — which would make policies purchased after that date ineligible.
New York’s pending bill makes the same design choice visible. Its exemption would require private coverage to be effective no later than January 1 of the year the program takes effect: again, coverage already in force, not coverage bought in response to an announcement.
Read plainly, that means there would be no window to react at all. If California ever enacts a program with an opt-out, the only coverage likely to qualify is coverage already in force on the day it is signed. That is a reason to make the decision on its own merits and on your own schedule. It is not a reason to hurry, because there is nothing to hurry toward — and a policy bought for tax reasons that turn out not to apply is a poor policy twice over.
Roughly a dozen states have examined a Washington-style program. New York has advanced furthest: companion bills would create a Long Term Care Trust Program funded by a 0.58 percent payroll contribution, with benefits payable on a two-of-six ADL standard. Both were introduced in January 2025 and re-referred to committee in January 2026; neither has reached a floor vote. Pennsylvania has a comparable trust bill. Oregon directed its human services department to study long-term care financing and report by September 2026. Minnesota, Michigan, Illinois, Colorado, Hawaii, Utah, Alaska, Montana and North Carolina have all had discussions at some stage.
As of today, Washington remains the only state collecting a long-term care payroll tax and the only state paying benefits from one. Every other state, California included, is at the study or proposal stage.
The reason is visible in the payment data. Federal research following people from age 65 finds that private insurance pays about five percent of lifetime paid long-term care costs. Families pay a little over a third directly out of pocket, and public programs — overwhelmingly Medicaid — carry most of the rest. Fewer than eight percent of adults aged 60 and over owned a long-term care policy as of 2022.
For a higher-income California household the relevant figure is a different one. Among people in the top income quintile at 65, only about six percent will ever receive Medicaid long-term care, and their average lifetime out-of-pocket cost is the highest of any income group. The public floor, where it exists at all, is not built for them.
Whether or not a program is ever enacted, the median California private nursing home room runs $15,178 a month — $182,135 a year, and roughly $910,000 over five years. Legislation does not change that arithmetic.
Even on the most generous design California studied, a public benefit would cover a fraction of an extended claim. The planning question is the gap above the floor, and that question is unchanged by whether the floor is ever built.
The deadline that actually exists is a medical one. Declines run about 17 percent of applicants in their fifties, 24 percent in their sixties and 45 percent in their seventies. That is the clock worth watching.
My CPA Perspective
Clients bring me this question in tax terms, and it is worth being clear that it is not a tax question yet. There is nothing in the California tax code to plan around. I will not build a recommendation on a statute that has not been written, and I would be cautious of anyone who offers to.
What Washington does provide is a reference point. It tells us what a legislature considers a reasonable public contribution to this risk: a lifetime ceiling of about $36,500, funded by a tax on wages, payable at a higher functional threshold than a private contract uses. Set that against a Bay Area cost of care and the size of the remaining exposure is not a matter of opinion.
The benefit is indexed, and I will not claim it is being outrun this year — the most recent survey recorded an average increase under two percent across several settings, after nine percent the year before. Over a longer run the direction has been one way, with a California private room up about a fifth in three years. That is a reason to plan for costs rising faster than general inflation, not to publish a fixed multiple.
So the analysis I run is the same one I would run if Washington had never passed anything: what the care is likely to cost, what your own capital can absorb, and what a private contract would cost to cover the difference. If California legislates one day, that work will still be the work. My compensation does not vary by which carrier you choose, and it does not vary by whether you buy at all.
If a state program is a floor, the next question is how far above it you need to be. How Much Long-Term Care Insurance Is Enough? works that figure out from California costs. The Long-Term Care Risk Most Families Leave Uninsured sets out who actually pays for care in this country and why so little of it is insured. Four Ways to Secure Long-Term Care Coverage compares the categories of private coverage side by side.
Complimentary · No Obligation
A review starts with your own numbers — the cost of care where you expect to receive it, what your capital can absorb, and what the difference would cost to insure. No state program changes that starting point.
Request a Complimentary ReviewPrefer to speak first? Call Bert directly at (925) 708-6501. Already own a policy? The same review applies to coverage you have held for years.
Washington State Employment Security Department and the WA Cares Fund (program design, contribution rate, vesting and transition pathways, benefit maximum and indexation, covered services, 2024 solvency review, and the 2025 amendments effective January 1, 2026); Washington Office of the Insurance Commissioner (supplemental private long-term care insurance rules effective May 1, 2026); Washington Secretary of State (November 2024 general election results, Initiative 2124); California Department of Insurance, Long Term Care Insurance Task Force (AB 567 feasibility report, December 2022; actuarial report, December 2023; statutory sunset July 1, 2024) and the Department’s Agent and Broker Alert of August 23, 2023; New York State Assembly and Senate (Long Term Care Trust Act bills, 2025–2026 session); U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation (lifetime long-term services and supports risk, cost and payer briefs, 2022 and 2025); American Association for Long-Term Care Insurance (declination rates by age band); CareScout 2025 Cost of Care Survey, published March 2026, California statewide medians. Cost figures are medians and are not quotations. Bay Area costs generally run above the California median.
This page is for informational purposes only and does not constitute personalized insurance, legal, or tax advice. Withbert W. Payne is a California-licensed insurance professional (CA License No. 0E90257). Descriptions of state programs and proposed legislation are general summaries of publicly available information as of August 2, 2026 and are subject to change; nothing here should be read as a prediction that any legislation will or will not be enacted. Insurance products, availability, and provisions vary by state and by carrier, and all coverage is subject to underwriting and to the terms of the issued policy. Long-term care benefit payments reduce the policy’s death benefit and cash surrender value. Long-term care benefits are generally income-tax-free; insurance decisions should be coordinated with your tax, legal, and financial advisers. All consultations are complimentary. This is a solicitation for insurance.
