Baby Boomers are growing gray, and the odds that they'll need some type of long-term care (LTC) are high. The bulk of that caregiving typically falls on the shoulders of family members — usually females — with the balance provided through home and community-based services (HCBS) and long-term services and supports (LTSS) institutions such as nursing facilities.

The financial cost of LTC can be devastating to families, both in terms of out-of-pocket expenses and time unpaid caregivers take off work. The emotional and physical toll on caregivers is high as well, with many reporting burnout, isolation, exhaustion and poor health.

We've created this resource page for companies and individuals who want to stay abreast of the ever-evolving search for solutions to long-term care.

The impact of long-term care on the government, employers and employees

This situation isn't temporary: The US Census Bureau estimates that by 2060, more than 23% of the US population will be 65 or older.1 The looming LTC crisis is concerning to the government, which funds Medicare and Medicaid. It's concerning to employers, whose employees are caring for family members and who will need to comply with future LTC regulations. And it's deeply concerning to people who need LTC and their families, who must piece together care services from multiple sources and figure out how to pay for them.

  • Medicare covers short-term care at home and in skilled nursing facilities under specific circumstances — such as following a hospitalization — but usually doesn't pay for LTC services.
  • The 2010 Community Living Assistance Services and Supports Act (CLASS Act) was intended to provide a voluntary plan for long-term care, but was repealed in 2013 before it was implemented, because of concerns that it wasn't financially viable.
  • Medicaid covers LTC at home and in skilled nursing facilities for people with low income. Federal requirements define basic services and eligibility, and states have the option to expand services and eligibility. As a result, Medicaid programs vary by state.
  • Cash values feature a permanent life plan that impacts an individual's Medicaid eligibility. Visit The American Council on Aging for more information on Medicaid's impact.

Employers feel the impact of unpaid caregiving in employee attendance and retention:

  • AARP's Caregiving in the U.S. 2020 Report2 found that 61% of caregivers work outside the home; more than half of that group reported that they had gone into work late, left early or taken time off to provide caregiving.
  • The AARP report noted that more employers are taking steps to assist their employees with caregiving responsibilities. More caregivers report workplace benefits such as paid family leave — 39 percent, up from 32 percent in 2015, when AARP did a similar report. Yet that statistic means that more than 60% are without paid family leave.
  • LongTermCare.gov3 reports that 80% of in-home care is provided by unpaid caregivers and that caregivers spend 20 hours a week providing care, on average — and more than half of that care is hands-on care such as feeding or bathing.
  • AARP's 2020 survey-based report on caregiving3 found that ten percent of unpaid caregivers quit their jobs or retired earlier than planned, which decreased household income. In addition, many caregivers reported health issues; the report concluded that caregiving-related stress could worsen age-related declines in health.

Washington State leads with legislation as other states make progress

Washington state has taken the lead on LTC legislation with the WA Cares Act. WA Cares addresses the LTC issue with a payroll tax of 0.58% on the gross income of workers who receive a W-2. This tax is specifically allocated to LTC services and supports, with no caps on timeline or contribution level. People who have private insurance were granted an exemption from the tax so long as the policy was acquired prior to November 1, 2022.

The tax, effective July 1, 2023, provides up to $36,500 to residents seeking LTC services, while also adding funds to the state's Medicaid budget. The reality is, with rising costs of care, the increasing pressure on the Medicaid budget and Americans' limited savings, the LTC crisis is something that can no longer be passively addressed. The timeline below shows that as Washington state made progress, other states began to follow suit.

Year-by-year graph of states considering LTC legislation.

While the WA Cares Act provides a first step toward addressing the LTC crisis, it has limitations. The cost of most LTC services far exceeds the $36,500 limit, and people who require LTC services need support for two to three years, on average. LTC costs, which are expected to outpace inflation, can easily exceed $100,000, especially if nursing home care is required.

State-by-state updates on long-term care legislation

Many other states are looking closely at their legislative options. New York and Pennsylvania have introduced — but not yet passed — similar legislation, and California continues a task force initiative that could lead to a new tax-based LTC program likely to be a model for other states.

US map showing states with active legislation or considering legislation.

Map is current as of October 2024.

A patchwork of state legislation is taking shape as more states explore ways to care for their aging populations. The information in this section is current as of October 2024. Check back often for the latest news.

States that aren't included have no reported LTC-related legislative activity to date.

Gallagher keeps you informed

Because Gallagher has long been committed to helping companies support their employees' wellbeing, we're focused on helping organizations understand and navigate the issues surrounding LTC. As you prepare your organization and employees for the future, you can rely on Gallagher to keep you up to date.

Thought leadership

Gallagher regional round tables

  • January 25, 2024. All employers LTC roundtable, sponsored by Gallagher's Voluntary Benefits Consulting practice.
  • May 9, 2024 at 10 a.m. CT: LTC roundtable, sponsored by Gallagher's Voluntary Benefits Consulting practice.

Request to join an LTC round table.

Considerations Guide: The Long-Term Care Market

The growth of the LTC services market exceeds the ability for Medicare and Medicaid to adequately provide services. In Gallagher's Considerations Guide: The Long-Term Care Market, you'll find in-depth answers to key considerations for today's employer.

Complete the form below to view Considerations Guide: The Long-Term Care Market.

Sources

1Vespa, Jonathan. "The Graying of America: More Older Adults Than Kids by 2035," United States Census Bureau, 13 Mar 2018.

2"Caregiving in the U.S. 2020 Report," AARP Family Caregiving and National Alliance for Caregiving, May 2020.

3"Who Will Provide Your Care?" LongTermCare.gov, revised 18 Feb 2020.

4How Much Care Will You Need? LongTermCare.gov, revised 18 Feb 2020.

5Lester, Margot. "What Are the Costs of Long-Term Care That I Should Know?" GoodRx Health, 14 Jan 2022.

6Chidambaram, Priya, and Alice Burns. "10 Things about Long-Term Services and Supports (LTSS)," KFF, 15 Sept 2022.

7"The Economic Impact of Caregiving," Blue Cross Blue Shield, 8 Nov 2021. PDF file.

Disclaimer

Consulting and insurance brokerage services to be provided by Gallagher Benefit Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc. Gallagher Benefit Services, Inc. is a licensed insurance agency that does business in California as "Gallagher Benefit Services of California Insurance Services" and in Massachusetts as "Gallagher Benefit Insurance Services." Neither Arthur J. Gallagher & Co., nor its affiliates provide accounting, legal or tax advice.