Jun 24, 2024
Status of the Potential California Long Term Care Insurance Tax
Background
In 2019, California enacted Assembly Bill 567 that established a Long Term Care Insurance Task Force. Since that time, the Task Force created and finalized a Feasibility Report in 2022.
This report recommended and outlined the following considerations of such a State program.
- Administrative
- Financial
- Political Feasibility
The Latest
In December 2023, the Task Force presented an Actuarial Report to the Legislature and the Governor. Lawmakers will now use the Feasibility Report and the Actuarial Report to help determine if legislation should be passed to create a public LTC program.
California Health Advocates provided the following potential options for a State Plan for Long Term Care.
| Design | Description | Overview | Estimated Contribution Rate |
|---|---|---|---|
| 1. | Supportive LTC benefits | $36,000 over two years in supportive LTC benefits for California's adult population (ages 18+) | 0.60% - Percentage of a single level payroll tax rate yet to be determined |
| 2. | Home care and residential care facilities (RCF) benefits for older adults | $110,400 over two years in targeted benefits for California's older adult population (ages 65+) | 1.15% - Percentage of a single level payroll tax rate yet to be determined |
| 3. | Lower-range comprehensive LTSS (Long Term Services and Supports) benefits | $36,000 over one year in comprehensive benefits for California's adult population (ages 18+) | 0.65% - Percentage of a single level payroll tax rate yet to be determined |
| 4. | Mid-range comprehensive LTSS benefits | $81,000 over 18 months in comprehensive benefits for California's adult population (ages 18+) | 1.60% - Percentage of a single level payroll tax rate yet to be determined |
| 5. | Higher-range comprehensive LTSS benefits | $144,000 over two years in comprehensive benefits for California's adult population (ages 18+) | 3.00% - Percentage of a single level payroll tax rate yet to be determined |
Resources
California’s Department of Insurance website about the LTC Insurance Task Force
DHCS Long Term Services and Supports Feasibility Report
Agent and Broker Alert August 23, 2023
While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice or services. Readers should always seek professional advice before entering into any commitments.
