Need a Reason to Start the LTC Conversation with Clients? Here’s a Big One

In recent years, financial advisors have struggled with introducing the issue of long-term care to their clients. Citing rising premiums and a general unwillingness among their clients to broach the subject, many advisors have grown reluctant to pursue the matter. This is despite the increasing threat of rising long-term care costs and the growing odds their aging clients will someday require some form of nursing care.

A Rare Window of Opportunity to Start the LTC Conversation

Every now and then, a rare window of opportunity opens for financial advisors to reach out to clients with a real solution to a financial problem most of them face—a chance to swoop in and help them avoid an inevitable assault on their finances. Most often, such opportunities result from a government policy threatening to raise taxes or impose costly regulations.

This time, it’s a state-level program that will force most people to relinquish more of their wages for mandatory participation in a state-run long-term care insurance program. While the program’s intent may be worthy—to ensure state residents have at least some protections against the rising costs of long-term care—its design and implementation are fraught with inadequacies typical of a government-imposed bureaucracy.

Seattle, Washington space needle

Washington State Starts it Off

A case in point is the state of Washington’s WA Cares Act, which is due to become active in July 2023. WA Cares will require employers to withhold a payroll tax equal to .58 percent of employee wages to provide Washington residents with up to $36,500 of lifetime benefits to cover the costs of long-term services and supports (LTSS). That’s a lifetime benefit in a state in which the average cost of long-term care ranges between $3,800 and $6,750 per month!

By the way, the .58 percent payroll tax is uncapped, meaning that the higher a resident’s income, the more they will pay into the program for the same limited benefit. This tax rate is not guaranteed to stay level.  It could easily be raised in the future.  

Washington States’ Cares Act may be the Model for Other States

While the window of opportunity for Washington advisors has closed, the concept is on the table in 17 other states that have introduced or are considering similar legislation, including:


New York

South Dakota







North Dakota


North Carolina






two people talking at a table

Now is the Time to Start Conversations 

Although there is no active timeline for a program to be implemented in any of these states (California, New York, and Pennsylvania are likely to be next), advisors don’t want to get caught flatfooted as they did in Washington, which offered a brief window of opportunity to purchase individual coverage that could qualify for the exemption. You can expect that the exemption for private coverage will have little or no window in other states. So, now is the time to start conversations with your clients.

With the opening of this window of opportunity, you’ll have plenty of resources and support from FAIU to help you start the LTC conversation with your clients. This report from NAIFA’s LTC center provides vital background information on the efforts by states and the federal government to launch government-run long-term care programs.