Is the WISH Act the Answer to Concerns About the Cost of an Aging Population?

A new bill proposed in Congress seeks to address financial concerns due to an aging population through the Well-Being Insurance for Seniors to be at Home Act (“WISH Act”). The current population of the United States is aging rapidly, leading to an increasing percentage of the population aged 65 and over. In fact, it is estimated that by 2050 the number of people living over the age of 65 will almost double and the number of people living over the age of 85 will triple.

The WISH Act, introduced on July 1, 2021 by U.S. Representative Tom Suozzi (NY), cautions that “the typical U.S. senior could afford only about 12 months of nursing home care, assisted living care, or extensive home care using their financial wealth.” This is consistent with the idea that over “half of Americans entering old age today will have a long-term need for constant attendance by another person, averaging $298,000 costs per person for about 2 years of serious self care disability (as defined in HIPAA), and more than half will be out-of-pocket, according to the U.S. Department of Health and Human Services (HHS).”

The WISH Act is intended to address these very concerns by amending Title II of the Social Security Act (SSA) to include long-term care insurance benefits. The bill proposes that financial long-term care assistance be offered if an individual meets four criteria, which criteria include some of the typical triggers for privately-offered long-term care insurance:

  • Has attained retirement age as defined in the SSA,
  • Has filed an application for long-term care insurance benefits,
  • Is insured for long-term care insurance benefits (i.e., has met contribution requirements to the trust fund described below), and
  • Has a continual serious functional disability (i.e., meets the definition of a chronically ill individual, is expected to remain chronically ill for a least one year or until death, and satisfies the applicable waiting period).

This financial assistance is to be funded by the establishment of the “Federal Long-Term Care Insurance Trust Fund,” which the bill proposes to be funded through treasury funds not otherwise appropriated, including three separate appropriations of $12,000,000 for the initial establishment of the Long-Term Care Insurance program and payment of benefits during certain fiscal years; $50,000,000 appropriation for public education related to the Long-Term Care Insurance program; 100% of taxes imposed by certain sections of the Internal Revenue Code regarding wages and self-employment income; and a portion of taxes related to compensation. Additionally, to increase revenue to fund the Federal Long-Term Care Insurance Trust Fund, the WISH Act proposes a 0.3 percent tax each on all workers and employers after 2021, and a .06 percent tax on self-employed individuals.

A key section of the WISH Act is the Education and Outreach piece. This aspect of the bill would require a “10-year plan to educate the public about the likelihood of needing long-term care, the nature of the experience of long-term care in various situations, the costs of long-term care, the availability of long-term care insurance benefits, and the importance of planning and considering private insurance coverage alongside family support and savings.”

It remains to be seen whether the WISH Act is the answer to concerns about the aging population. However, what is certain is that a bill encouraging public education and planning ahead for future costs of aging has the potential to aid millions in avoiding or lessening the financial strains of aging.

The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.

About the Author: Christopher F. Petillo

Chris’s insurance litigation experience includes coverage and extra-contractual disputes in state and federal courts across the country, involving life, long-term care, annuity, and property and casualty policies. Substantively, Chris’s litigation focuses on life insurance pricing issues such as cost of insurance, fraud (including rescissions), broker misconduct, lapse and reinstatement, civil RICO, and claims disputes. Visit Christopher's full bio on the Faegre Drinker website.

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