WA Cares Fund began paying long-term care benefits on July 1, 2026, giving the actuarial profession its first real-world experience data for a mandatory public LTC insurance program. Milliman's 2024 solvency study projected 25,000 to 35,000 qualifying beneficiaries in year one and found the fund solvent through 2099 at the legislated 0.58% premium rate.

Every input behind that projection was estimated from proxy data, because no comparable American program had ever paid a claim.

Key Takeaways

  • 0.57% required against 0.58% legislated. The margin for 75-year solvency is one basis point, which the study treats as thin rather than comfortable.
  • 475,000 private-insurance exemptions, about 12% of the covered workforce, against roughly 35,000 Washingtonians who typically buy new private LTC coverage in a year. The exempted pool was drawn from existing policyholders.
  • A three-ADL bright line creates a documentation incentive at the boundary that national prevalence surveys, which measure functional limitation on a continuum, cannot predict.
  • $36,500 against $152,570. The lifetime benefit covers roughly 3.5 months of a private nursing home stay in Washington, or about 811 hours of in-home assistance at the program's reimbursement ceiling.
  • No insurer has filed a supplemental policy. The wraparound private product the legislature designed does not exist, and claimants exhausting the benefit this year have nothing state-approved to move to.

What the Solvency Case Assumed

Milliman's 2024 valuation, prepared for the Washington Office of the State Actuary, modeled a lifetime benefit of $36,500 in 2026 dollars, adjusted annually for inflation, drawn against the full working-age premium base at 0.58% of covered wages with no cap on the taxable wage floor above Social Security's maximum.

It found the fund's actuarial balance at 3.5% of the present value of projected claims, equivalent to a $4.4 billion surplus as of June 30, 2024, and solvent through the full 75-year projection window under most tested scenarios. A separate calculation put the rate actually required for 75-year solvency at 0.57%, one basis point below the legislated 0.58%.

Utilization assumptions came from national long-term care survey data rather than Washington claims experience, because no such experience existed. That is the structural weakness in pricing any new social insurance program: the model extrapolates from a national population that does not face the same eligibility mechanics, benefit cap or opt-out dynamics the state statute created.

Metric to watchWhat the 2024 Milliman baseline assumedWhat would signal a deviation
Year-one qualifying beneficiaries25,000 to 35,000 (Milliman, 2024)Materially above range, consistent with boundary-seeking ADL claims
Required vs. legislated premium margin0.57% required vs. 0.58% legislated (Center for Retirement Research, 2024)A widening realized gap as exempted-pool morbidity effects surface
Actuarial balance3.5% of present value of claims, $4.4B (OSA/Milliman, June 2024)Faster-than-projected erosion in the next valuation cycle
Medicaid offset credit~10% of program cost (Center for Retirement Research, 2024)Lower realized offset if claimants defer filing past the point of Medicaid relevance

"Washington is the first state to institute this program, or anything like it," Norma Coe of the University of Pennsylvania's Leonard Davis Institute said of the launch.

Three Design Choices That Move Utilization Off the Baseline

Each of Washington's specific statutory choices can push realized utilization away from the national baseline the model started from, and they push in different directions.

The exemption window is the first. The 2021 law let workers holding qualifying private LTC insurance before November 1, 2021 apply for permanent exemption from the payroll premium, and the Employment Security Department approved roughly 475,000 private-insurance exemptions, about 12% of the covered workforce, with narrower categories bringing the total above 480,000 by 2023. Only around 35,000 Washingtonians typically purchase new private LTC coverage in a year, so the exempted pool came overwhelmingly from workers who already held a policy rather than from a wave of opt-out-triggered purchases.

Qualifying for a private LTC exemption required the income and underwriting profile to buy an individual policy, which skews the exempted group toward higher earners with historically lower LTC utilization. Removing them does not change how many Washingtonians will need care. It shifts the mix of who is left paying toward a population carrying somewhat higher expected morbidity. Milliman's 2022 study built adverse-selection effects from the exemption structure into the 0.57% required rate, so this is a modeled risk whose magnitude is only now observable.

The eligibility threshold is the second. A claimant must demonstrate need for hands-on or standby assistance with at least three activities of daily living, verified through the state's assessment process. A bright line is administratively clean, and it also creates an incentive at the boundary: claimants and families working with care coordinators who understand the criteria have reason to see a marginal case documented at three deficits rather than two, particularly after years of premiums with no benefit. National prevalence surveys measure self-reported functional limitation on a continuum, not against a state assessment rubric, so a model built from them cannot anticipate the clustering.

The benefit cap is the third, and it works the other way. A semi-private nursing home room in Washington runs an estimated $152,570 a year in 2026 and a private room closer to $166,075, against national medians near $111,325 and $127,750. The $36,500 benefit is roughly 3.5 months of a private stay, or about 811 hours of paid in-home assistance at the program's reimbursement ceiling near $45 an hour. A capped benefit gives claimants reason to defer filing until needs are more severe, which front-loads claim duration and per-claim severity into the early benefit period in a pattern a tiered private policy manages differently.

That gap was deliberate. WA Cares was built to supplement family caregiving and delay Medicaid spend-down rather than replace comprehensive private coverage, and the solvency case credits it with Medicaid savings equal to roughly 10% of program costs for exactly that reason. Deferred filing is the mechanism that would erode the credit while leaving the headline claims-to-premium ratio looking benign.

The Wraparound Market Does Not Exist

The legislature designed a private product to sit on the other side of the benefit cap, and it has not been built.

Engrossed Substitute Senate Bill 5291, signed in May 2025, created a supplemental LTC insurance product carriers can sell to cover costs after a WA Cares claimant exhausts the public benefit. The Office of the Insurance Commissioner finalized implementing rules effective March 7, 2026, requiring supplemental policies to provide at least 12 months of coverage once WA Cares benefits run out, allow continuity of care providers across the transition, and offer flexible premium structures.

No insurer has filed a supplemental policy for approval. Claimants exhausting the $36,500 benefit this year have no state-approved product to move to, whatever they could afford to pay for one.

That absence changes what the first year of claims data measures. The valuation's deferred-filing and Medicaid-offset assumptions were built for a world where a claimant approaching the cap has somewhere to go. Without the wraparound, exhaustion routes to family caregiving or Medicaid directly, which is the outcome the 10% offset credit was meant to postpone. The benefit itself rises toward a projected $59,810 by 2046 at a 2.5% assumed annual increase, against care costs already running six figures, so the distance the supplemental market was created to close is widening rather than narrowing while the market stays empty.

Further Reading

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