California Moving Forward to Require Long-Term Care (LTC) Coverage

California, amongst several other states, is considering long-term care legislation. As a result of the passage of AB 567, the California Department of Insurance established the Long Term Care Insurance Task Force. The Task Force consisting of 15 members will assess the viability of implementing a statewide Long Term Care (LTC) insurance program. So far, the Task Force has recommended five program design options to the Insurance Commissioner, Governor, and Legislature, ranging from $36,000 in supportive LTC benefits to $144,000 in comprehensive Long-Term Services and Supports (LTSS) benefits. The program designs will be analyzed financially in 2023 to determine their cost and feasibility. 

The design of these programs includes benefit portability and the availability of substitutive private insurance. The Task Force recommended a tiered private insurance exemption provision. Individuals with eligible private long-term care insurance could qualify for a full exemption or reduced contributions to the program. 

No matter which design is chosen, the Task Force recommended that the program be funded through a progressive payroll tax (likely shared between employers and employees) and an income-based tax for self-employed individuals.

By January 1, 2024, the Task Force will issue its Actuarial Report to the California Legislature; however, the LTC program could still be years away from being implemented.

Ref: Moench, Stephanie 2023 CLTCDigest “Public LTC Financing”