States lead effort to fix America’s long-term care crisis

States are stepping up to respond to the need for long-term care services and supports in innovative ways. A panel looked at some of those strategies during the 2025 Harkin Institute Retirement Security Symposium.

“What we are witnessing is the effects of an underfunded system,” said Marc Cohen, professor of gerontology at the LeadingAge LTSS Center, University of Massachusetts Boston.

“The challenges we have with our caregiving workforce, our family caregivers, and so on all derive from the issue that we do not have a stable source of funding going into the LTSS (long-term services and support) system.”

Cohen said that as the population ages, more people are living long enough to reach the point at which they need LTSS. But he pointed out that about 40% of people who have LTSS are under age 65.

The caregiving workforce is stretched thin, while there is little support available for family caregivers, who perform the bulk of long-term care. “At the center of it all is the financing issue, which is fragmented,” he said. “It’s Medicaid heavy and leaves middle-income people stuck in the middle.”

“Because the way the LTSS system is financed, the states are often left holding the bag,” Cohen said.

“They must deal with Medicaid budgets that are crowding out other policy priorities. Many of them passed legislation to support the private insurance market, which has underperformed. There is gridlock at the federal level. The states have come to understand that the cost of doing nothing will now exceed the cost of trying to do something.”

Cohen said states are testing solutions for funding long-term services and support in four major areas.

1. Strengthening the workforce. At least 41 states are taking a series of actions to support the LTSS workforce. States are raising wages, tying Medicaid rates to direct care pay, standardizing training, and recruitment bonuses and tuition help. “States know we can’t fix this problem without addressing the workforce issues,” he said.
2. Supporting family caregivers. “They are the backbone of the system,” Cohen said. He said eight states have established caregiver tax credits, 13 states and the District of Columbia have enacted paid family leave and a number of states are extending respite services for caregivers. “I think there’s an understanding at the state level that if the family support system collapses, the whole system collapses,” he said.
3. Expanding affordability and access. States are using waivers and state plan amendments to expand home and community-based services. States are raising provider rates to expand capacity and improve wages.
4. Supporting the private insurance market. Cohen said he is seeing some activity on the state level to support private long-term care insurance.

“The need is growing, the workforce is strained and stretched, but there’s a lot going on at the state level and our challenge is to connect those dots, take the lessons learned and think seriously how they might be applied to federal policy,” he said.

WA Cares

Washington Cares is a state-run long-term care insurance program for working Washingtonians. Funded by a 0.58% payroll deduction, the program will offer benefits starting July 1, 2026, to cover a portion of the costs associated with long-term care, such as assistance with daily living, home modifications, and caregiving support. To access benefits, individuals must meet contribution requirements and have a care need, which means needing help with at least three activities of daily living.

Ben Veghte, director of the WA Cares Fund, said the program addresses three problems in the existing system.

1. Inequity in access to care.
2. Inequity among family caregivers.
3. Inequity in the care workforce.

“WA Cares is not designed to fully solve the long-term care problem,” he said.  “But we want everyone to have more dignity and independence in old age. That’s how we pitched this to voters. We don’t pitch this as, 'We need more money for long-term care, give us money.' We say every family faces this problem. It’s not rich versus poor, it’s not an income redistribution program; it’s a family support program.”

California looks at LTSS

With one-fifth of California’s population expected to be age 65 or older by 2030, the state’s leaders realized the issue of LTSS in that state must be addressed, said Brandi Wolf, policy and research director of Service Employees International Union Local 2015.

In 2021, California developed a LTCi task force to look at the feasibility of developing an LTCi model in CA. Wolf said that while the task force made a series of recommendations, “the question is, how do you fund a program? Is it a tax on employers? Is it a payroll tax on employees? Is it through state contributions?”

She said that the task force had to address what is most politically feasible and can cover the most people. The task force has recommended several options for establishing a statewide long-term care insurance program, although no further action has been taken.

“Aging is not the big sexy issue of the day,” she said. “So it’s our responsibility to raise this issue to our elected leaders at the state and national level.”

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.