Create State Long-Term Care Fund

Section 2 amends the Public Health Law by adding a new Article 36-B establishing the New York Long Term Care Trust Program.

Article 36-B:

1. Defines relevant terms.

2. Establishes the New York Long Term Care Trust Program to provide long term care services and supports benefits to all eligible beneficiaries regardless of income or resources, to be administered primarily by the Department of Health, in coordination with the Office of Temporary Disa- bility Assistance, the Office of Mental Health, the state Office for the Aging, the Department of Taxation and Finance, and the Department of Labor.

Requires the Department of Health to:

a. Administer the application process and determine eligibility;

b. Monitor premium contributions and use of benefits;

c. Establish standards for providing long term care services and supports under the program to ensure that the program is administered in the best interests of beneficiaries;

d. Develop standards for payments and reimbursements to long term services and supports providers;

e. Coordinate benefits for those beneficiaries receiving support through Medicaid, Medicare, private long term care insurance, or other programs;

f. Develop processes and systems for program administration;

g. Develop and maintain a registry of qualified long term care services and supports providers and assist providers in navigating the program; and

h. Develop and provide educational materials to inform employers, employees, and the public about rights, obligations, and benefits under the program.

3. Creates the Long Term Care Trust Commission, to be composed of state officials and legislative and executive appointees with the duty of providing guidance to relevant agencies administering the program, ensuring the sustainability of the program, and ensuring adequacy of benefits.

The Commission will make recommendations on benefit eligibility stand- ards, qualifications for long term care services and supports providers, reimbursement rates for such providers which include ensuring wage protections for workers providing long term care services, any appropri- ate adjustments to the benefit amount and premium amount, and necessary rules and regulations. The Commission shall also report to the legisla- ture on a variety of relevant matters, including the fiscal health of the program.

4. Creates the Long Term Care Trust Advisory Panel which acts as a subcommittee of the Commission with authority to review the benefit unit amount in light of data pertaining to economic indicators, program costs, and sustainability, including, but not limited to the wages of long term care services and supports providers. Such review and adjust- ment to the benefit amount shall occur on an annual basis. To the extent that the Advisory Panel does not act by the required 60% majority to alter the benefit amount, the benefit amount shall be adjusted to reflect changes in the Consumer Price Index.

5. Requires that any qualified and eligible individual shall receive benefits to pay for long term care services and supports upon applying for such benefits, while providing for expedited eligibility determi- nations in case of immediate need, and requires that long term care services and supports providers shall be reimbursed to the extent of such benefits by the Department of Health.

6. Provides that the department shall establish standards and procedures for registration of qualifying long term care services and supports providers under the program and for suspending or revoking registration under certain circumstances.

7. Requires wage protections for workers providing long term care services.

8. Implements a program to collect premium contributions from all indi- viduals in the state in a manner similar to income tax withholding for employees, and income tax payments by self-employed individuals, and requires the commission to set the amount of premium contributions at the lowest amount necessary to maintain the program on a sound financial footing.

9. Provides for an exemption, upon request, from the obligation to pay premiums, coupled with a disqualification of the right to receive bene- fits, for the following: an individual who has maintained and continues to maintain private long term care insurance on an uninterrupted basis beginning no later than January first of the year in which the act takes effect; a U.S. military veteran with a service-connected disability of seventy percent or greater; a spouse or registered partner of an active duty service member; an employee holding a non-immigrant visa for tempo- rary workers; and an individual who maintains a permanent residence outside of the state of New York.

10. For New Yorkers who relocate out of state after having been assessed premiums for at least three years, provides an option to continue to participate in the program.

11. Institutes an appeal process for an applicant, recipient, or long term care services and supports provider to challenge a determination or failure to make a determination by the Department of Health with respect to the program.

12. Provides for any appropriate waivers necessary to to achieve the purposes of the program.

Section 3 amends the state finance law to add a new section 99-ss estab- lishing the Long Term Care Trust Fund, to hold the monies obtained through premiums and any interest or other proceeds from investments of such monies, such fund to be held in the joint' custody of the Comp- troller and the Commissioner of the Department of Taxation and Finance.

Section 4 amends the state finance law to add a new section 8-d setting forth additional duties of the Comptroller with respect to the program. These include:

1. Audits and actuarial services and valuations of the Long Term Care Trust Fund;

2. Conducting, no later than ten years after the effective date of this section, a comprehensive evaluation of the Long Term Care Trust Program and reporting on such evaluation to the legislature, with recommenda- tions for improvements to the program.

Section 5 amends section 171-a of the tax law by adding a new subdivi- sion 6-c requiring the commissioner of the Department of Taxation and Finance to enter into cooperative agreements with the Department of Health, and the Department of Labor, to allow for information sharing for purposes of verifying whether individuals are qualified individuals eligible for benefits, and for other purposes deemed appropriate.

Section 6 amends Section 171-h of the tax law to allow for information sharing between the Department of Taxation and Finance, the Office of Temporary and Disability Assistance, the Department of Health, and the Department of Labor for purposes of other aspects of administration of the program.

Section 7 amends the tax law to provide that the duties of the Depart- ment of Taxation and Finance with respect to income tax withholding shall apply to the premium collection requirements of the Long Term Care Trust Program.

Section 8 provides for severability.

Section 9 provides the effective date.

Justification

The New York State Department of Health estimates that by 2030, more than 5.3 million New Yorkers will be over the age of 60.1 Many will need long term care services at some point in their later years.(2)

Often it is not until a parent or other family member is suddenly faced with a need for care, whether in-home services and supports or nursing home care, that we come face to face with the failings of our long term care system. Contrary to what many believe, the federal Medicare program provides for time-limited rehabilitative care but does not pay for long term care.3 To qualify for long term care through the Medicaid program, many New Yorkers must deplete income or assets and may be left with very little to get by on. The alternative of purchasing a private long term care insurance policy has become increasingly unaffordable.(4)

The status quo is that many if not most New Yorkers have limited options for securing long term care if they do not have a family member who can help. It is long past time to change that.

Long term care insurance is a safety-net insurance policy that covers non-medical care for those who need assistance with activities of daily living, such as dressing, bathing, and eating. However, our current system of long term care insurance does not work for most New Yorkers because almost no one can afford it. The New York State Department of Financial Services has reported that as of December 2022, the number of New Yorkers with long term care insurance policies was only 386,686,5 well below the 50% of New Yorkers over 65 who are expected to need long term care services in the future.6

Even for those who can afford to purchase private long term care insur- ance policies, those policies are failing existing policyholders. Rate increases are frequent and, in many cases, staggeringly large. Many consumers purchased these plans with reasonable premiums years ago in hopes of relying on them to secure care later in life, only to see rates increase dramatically, forcing a difficult choice: reduce coverage to a level that may not adequately cover their needs, pay an ever larger share of income (and often fixed income) for premiums, or abandon the policy altogether despite having paid expensive premiums for years. What is more, the long term care insurance product has not been good for insurance companies either. According to the state Department of Finan- cial Services, the number of insurers offering long term care policies in New York has declined dramatically in the last twenty years. As of the end of 2022, only five insurance companies offered these policies in New York, down from eight in 2020, thus limiting consumer options.

The result is a dearth of help for those requiring financial assistance to meet their long term care needs. Too many are forced to spend down income and assets to become eligible for Medicaid, to pay out-of-pocket for caregivers for their loved ones, or to take on care responsibilities themselves. This plight hits not only the individuals needing care, but their families as well.

For those providing care to family members, the sacrifices (such as loss of income and career opportunities) are many.(7)

Private long term care insurance has failed to provide a solution to this problem and that failure has continued for many years. New York State has tried an array of strategies to help this market, including tax incentives, enhanced consumer protection, and establishing programs such as the New York State Partnership for Long Term Care (NYS Partner- ship for LTC) and the New York Public Employee and Retiree Long Term Care Insurance Plan (NYPERL).(8)

The NYS Partnership for LTC, which became operational in 1993, provided enrollees who purchased a long term care insurance policy with eventual access to Medicaid if needed, without having to spend down their assets. NYPERL, enacted through legislation in 1998, was a group policy for public employees which was administered by the Department of Civil Service, but with coverage provided by a private insurance company. The program offered several favorable long term care insurance options. Both initiatives eventually floundered, and while legacy policies remain in force, the programs are now essentially defunct, having ceased to offer new policies altogether.

The U.S. Treasury-led Federal Interagency Task Force on Long-Term Care Insurance reported that, of the approximately $217 billion spent on long term care in the United States in 2018, 70% ($159.1 billion) was paid by Medicaid, 25% ($55 billion) was out-of-pocket spending, and only 4.5% ($10.3 billion) was paid by private long term care insurance.9 Notably, those numbers do not account for care provided by loved ones which is unpaid. The same 2020 United States Treasury report referenced 2013 and 2015 studies which estimated the value of unpaid care during 2011 at $234 billion and $522 billion, respectively, depending on how the care was valued, with even the low estimate far exceeding all Medicaid, private long term care insurance, and out-of-pocket spending combined.(10)

Accordingly, private long term care insurance appears to address less than 2.5t of the need for long term care - private insurance simply cannot meet this challenge. Approaches that encourage new sales may help as an ancillary matter, but are sadly inadequate to address the magni- tude of the gap between what most New Yorkers need and what most New Yorkers can afford.

From 2000 to 2015, the cost of long term care grew from $30 billion to $225 billion in the United States, suggesting that the market for long term care insurance should have seen high demand. Instead, it was during this time that the bottom fell out of the industry and insurers stopped offering the product. Various reports, studies, and industry surveys have suggested that additional consumer financial education, new types of long term care insurance products, and additional tax incentives will spur increased consumer interest, but we can no longer wager the saving accounts of New Yorkers on ideas which have continually failed to resus- citate significant interest in private long term care insurance from either insurers or potential insureds. Along with other states like Washington and California, we must step up to help solve this problem.

We must change our approach if we are to ensure that New Yorkers get the care they need and are not forced to impoverish themselves in order to receive it.

The New York Long Term Care Trust Program as created by this bill will provide universal long term care benefits at an initial rate of $200 per day for a lifetime limit of 365 days worth of benefits, funded by a modest payroll tax. The benefit is meaningful: eligible uses for these benefits are broad enough to cover the panoply of long term care needs, and the amount is enough to make a difference - it can absorb a signif- icant share of the financial burden of in-home care for someone who needs eight hours of support each day. The meaningfulness of the benefit is balanced by a thoughtful fiscal approach: (1) the premium is expected to be very small (in Washington State where a similar program has been enacted, it amounted to 58 cents out of every 100 dollars in wages), (2) an individual must "earn" the benefit by working at least ten years during their lifetime, and (3) the individual then must prove that they need assistance with at least two activities of daily living (such as bathing, eating, dressing, and toileting) in order to be eligible. Such an approach delivers a significant benefit when it is needed, without imposing an unreasonable burden on working New Yorkers; leaves room for private long term care insurance to offer policies that can supplement this benefit for those who choose to purchase extra protection; and will result in savings to the state through reduced spending on Medicaid.

Furthermore, the bill contains provisions establishing wage protections for long term care workers, a majority of whom are women of color, and who serve as the backbone of the long term care industry, yet who often do not receive a living wage.

To administer the program, the bill draws on the expertise of a wide variety of state agencies and experts and holds the Long Term Care Trust Commission responsible for ensuring the long term financial viability of the long term care trust fund.

The struggle to pay for long term care is an issue that touches almost every family in New York State - 50% of us will need long term care at some point in our lives, and yet we do not have a system in place to mitigate the high costs of such care. This bill recognizes the gravity of this problem by taking a meaningful, fiscally responsible, and compassionate approach to addressing one of the most significant finan- cial burdens that many families will ever face.

Prior legislative history

2023-2024: S8462/A10143, referred to Health Committee

2021-2022: S9082, referred to Health Committee

Fiscal implications

The Long Term Care Trust Program is designed to be revenue neutral and self-sustaining in perpetuity. Specific fiscal mechanics are still being determined. Significant savings to the state are expected in the form of reduced Medicaid expenditures. Increased economic activity is likely in the form of a reduction in lost employment output as family caregivers will increasingly have the option to continue to work rather than being forced to leave or reduce employment in order to provide care to loved ones.

Effective date

The act shall take effect immediately. 1 NYS Department of Health, Long Term Care Planning Project, available at https://www.health.ny.gov/facilities/long_term_care/planning_project/ 2 Richard Johnson, What Is the Lifetime Risk of Needing and Receiving Long-Term Services and Supports?, U.S. Department of Health and Human Services (April 3, 2019), available at https://aspe.hhs.gov/reports/what-lifetime-risk-neediflg-receiviflg long-term- services- supports -0 3 Priya Chidambaram and Alice Burns, 10 Things About Long-Term Services and Supports, available at https://www.kff.org/medicaid/issuebrief/ 10-things-about-long-term-services-and-supports-ltss/ 4 Jordan Rau & Reed Abelson, Financial Ruin is Baked into the System, NY Times (Dec. 15, 2023), available at https://www.nytimes.com/2023/12/15/health/readers-long-term-care.html 5 Acrienne A. Harris, Superintendent, NYS Department of Taxation and Finance, Report to the Governor and Legislature on Long Term Care Health Insurance Plans (Dec. 2022), available at https://www.dfs.ny.gov/system/files/documents/2023/12/2023_1tc_biennia 1_report_20231222.pdf; NYS Department of Taxation and Finance, Long Term Care Insurance: Looking Back and Thinking Ahead (June 7, 2023), at 1, available at https://www.dfs.ny.gov/system/files/documents/2023/06/dfs_ltc_report_2 0230607.pdf 6 NYS Senate Committees on Aging, Health, and Labor, Addressing the Crisis in the Long-term Care Workforce (July 27, 2021) at 4, available at https://www.nysenate.gov/sites/default/files/article/attachment/long. term_care_workforce_hearing_report_2021.pdf 7 Id at 8 (As many as 10% of family caregivers leave the workforce in order to provide care at some point in their careers. An AARP report estimated that in 2017 there were 2.5 million unpaid caregivers in the state.) 8 Adrienne A. Harris, Superintendent, NYS Department of Taxation and Finance, Report to the Governor and Legislature on Long Term Care Health Insurance Plans (Dec. 2022), available at https://www.dfs.ny.gov/system/files/documents/2023/12/2023_1tc_biennia l_report_20231222.pdf 9 Federal Interagency Task Force on Long-Term Care Insurance, Long-Term Care Insurance: Recommendations for Improvement of Regulation, U.S. Dep't of the Treasury (August 2020), at 3, 14, available at https://home.treasury.gov/system/files/136/Report-Federal-InteragencyTas k-Force-Long-Term-Care-Insurance.pdf 10 1d at 15.