BILL NUMBER: S1179
SPONSOR: MAYER
 
TITLE OF BILL:
An act to amend the public health law, the state finance law and the tax
law, in relation to enacting the "New York long term care trust act" and
establishing the New York long term care trust program
 
PURPOSE OR GENERAL IDEA OF BILL:
To implement a new way of supporting the costs of long term care by
creating a public benefit available to all New York workers for long
term care services and supports, financed by a modest payroll withhold-
ing tax.
 
SUMMARY OF PROVISIONS:
Section 1 provides that the act shall be known as the "New York long
term care trust act."
Section 2 amends the Public Health Law by adding a new Article 36-B
establishing the New York Long Term Care Trust Program.
Article 36-B:
1. Defines relevant terms.
2. Establishes the New York Long Term Care Trust Program to provide long
term care services and supports benefits to all eligible beneficiaries
regardless of income or resources, to be administered primarily by the
Department of Health, in coordination with the Office of Temporary Disa-
bility Assistance, the Office of Mental Health, the state Office for the
Aging, the Department of Taxation and Finance, and the Department of
Labor.
Requires the Department of Health to:
a. Administer the application process and determine eligibility;
b. Monitor premium contributions and use of benefits;
c. Establish standards for providing long term care services and
supports under the program to ensure that the program is administered in
the best interests of beneficiaries;
d. Develop standards for payments and reimbursements to long term
services and supports providers;
e. Coordinate benefits for those beneficiaries receiving support through
Medicaid, Medicare, private long term care insurance, or other programs;
f. Develop processes and systems for program administration;
g. Develop and maintain a registry of qualified long term care services
and supports providers and assist providers in navigating the program;
and
h. Develop and provide educational materials to inform employers,
employees, and the public about rights, obligations, and benefits under
the program.
3. Creates the Long Term Care Trust Commission, to be composed of state
officials and legislative and executive appointees with the duty of
providing guidance to relevant agencies administering the program,
ensuring the sustainability of the program, and ensuring adequacy of
benefits.
The Commission will make recommendations on benefit eligibility stand-
ards, qualifications for long term care services and supports providers,
reimbursement rates for such providers which include ensuring wage
protections for workers providing long term care services, any appropri-
ate adjustments to the benefit amount and premium amount, and necessary
rules and regulations. The Commission shall also report to the legisla-
ture on a variety of relevant matters, including the fiscal health of
the program.
4. Creates the Long Term Care Trust Advisory Panel which acts as a
subcommittee of the Commission with authority to review the benefit unit
amount in light of data pertaining to economic indicators, program
costs, and sustainability, including, but not limited to the wages of
long term care services and supports providers. Such review and adjust-
ment to the benefit amount shall occur on an annual basis. To the
extent that the Advisory Panel does not act by the required 60% majority
to alter the benefit amount, the benefit amount shall be adjusted to
reflect changes in the Consumer Price Index.
5. Requires that any qualified and eligible individual shall receive
benefits to pay for long term care services and supports upon applying
for such benefits, while providing for expedited eligibility determi-
nations in case of immediate need, and requires that long term care
services and supports providers shall be reimbursed to the extent of
such benefits by the Department of Health.
6. Provides that the department shall establish standards and procedures
for registration of qualifying long term care services and supports
providers under the program and for suspending or revoking registration
under certain circumstances.
7. Requires wage protections for workers providing long term care
services.
8. Implements a program to collect premium contributions from all indi-
viduals in the state in a manner similar to income tax withholding for
employees, and income tax payments by self-employed individuals, and
requires the commission to set the amount of premium contributions at
the lowest amount necessary to maintain the program on a sound financial
footing.
9. Provides for an exemption, upon request, from the obligation to pay
premiums, coupled with a disqualification of the right to receive bene-
fits, for the following: an individual who has maintained and continues
to maintain private long term care insurance on an uninterrupted basis
beginning no later than January first of the year in which the act takes
effect; a U.S. military veteran with a service-connected disability of
seventy percent or greater; a spouse or registered partner of an active
duty service member; an employee holding a non-immigrant visa for tempo-
rary workers; and an individual who maintains a permanent residence
outside of the state of New York.
10. For New Yorkers who relocate out of state after having been assessed
premiums for at least three years, provides an option to continue to
participate in the program.
11. Institutes an appeal process for an applicant, recipient, or long
term care services and supports provider to challenge a determination or
failure to make a determination by the Department of Health with respect
to the program.
12. Provides for any appropriate waivers necessary to to achieve the
purposes of the program.
Section 3 amends the state finance law to add a new section 99-ss estab-
lishing the Long Term Care Trust Fund, to hold the monies obtained
through premiums and any interest or other proceeds from investments of
such monies, such fund to be held in the joint' custody of the Comp-
troller and the Commissioner of the Department of Taxation and Finance.
Section 4 amends the state finance law to add a new section 8-d setting
forth additional duties of the Comptroller with respect to the program.
These include:
1. Audits and actuarial services and valuations of the Long Term Care
Trust Fund;
2. Conducting, no later than ten years after the effective date of this
section, a comprehensive evaluation of the Long Term Care Trust Program
and reporting on such evaluation to the legislature, with recommenda-
tions for improvements to the program.
Section 5 amends section 171-a of the tax law by adding a new subdivi-
sion 6-c requiring the commissioner of the Department of Taxation and
Finance to enter into cooperative agreements with the Department of
Health, and the Department of Labor, to allow for information sharing
for purposes of verifying whether individuals are qualified individuals
eligible for benefits, and for other purposes deemed appropriate.
Section 6 amends Section 171-h of the tax law to allow for information
sharing between the Department of Taxation and Finance, the Office of
Temporary and Disability Assistance, the Department of Health, and the
Department of Labor for purposes of other aspects of administration of
the program.
Section 7 amends the tax law to provide that the duties of the Depart-
ment of Taxation and Finance with respect to income tax withholding
shall apply to the premium collection requirements of the Long Term Care
Trust Program.
Section 8 provides for severability.
Section 9 provides the effective date.
 
JUSTIFICATION:
The New York State Department of Health estimates that by 2030, more
than 5.3 million New Yorkers will be over the age of 60.1 Many will need
long term care services at some point in their later years.2
Often it is not until a parent or other family member is suddenly faced
with a need for care, whether in-home services and supports or nursing
home care, that we come face to face with the failings of our long term
care system. Contrary to what many believe, the federal Medicare program
provides for time-limited rehabilitative care but does not pay for long
term care.3 To qualify for long term care through the Medicaid program,
many New Yorkers must deplete income or assets and may be left with very
little to get by on. The alternative of purchasing a private long term
care insurance policy has become increasingly unaffordable.4
The status quo is that many if not most New Yorkers have limited options
for securing long term care if they do not have a family member who can
help. It is long past time to change that.
Long term care insurance is a safety-net insurance policy that covers
non-medical care for those who need assistance with activities of daily
living, such as dressing, bathing, and eating. However, our current
system of long term care insurance does not work for most New Yorkers
because almost no one can afford it. The New York State Department of
Financial Services has reported that as of December 2022, the number of
New Yorkers with long term care insurance policies was only 386,686,5
well below the 50% of New Yorkers over 65 who are expected to need long
term care services in the future.6
Even for those who can afford to purchase private long term care insur-
ance policies, those policies are failing existing policyholders. Rate
increases are frequent and, in many cases, staggeringly large. Many
consumers purchased these plans with reasonable premiums years ago in
hopes of relying on them to secure care later in life, only to see rates
increase dramatically, forcing a difficult choice: reduce coverage to a
level that may not adequately cover their needs, pay an ever larger
share of income (and often fixed income) for premiums, or abandon the
policy altogether despite having paid expensive premiums for years. What
is more, the long term care insurance product has not been good for
insurance companies either. According to the state Department of Finan-
cial Services, the number of insurers offering long term care policies
in New York has declined dramatically in the last twenty years. As of
the end of 2022, only five insurance companies offered these policies in
New York, down from eight in 2020, thus limiting consumer options.
The result is a dearth of help for those requiring financial assistance
to meet their long term care needs. Too many are forced to spend down
income and assets to become eligible for Medicaid, to pay out-of-pocket
for caregivers for their loved ones, or to take on care responsibilities
themselves. This plight hits not only the individuals needing care, but
their families as well.
For those providing care to family members, the sacrifices (such as loss
of income and career opportunities) are many. 7
Private long term care insurance has failed to provide a solution to
this problem and that failure has continued for many years. New York
State has tried an array of strategies to help this market, including
tax incentives, enhanced consumer protection, and establishing programs
such as the New York State Partnership for Long Term Care (NYS Partner-
ship for LTC) and the New York Public Employee and Retiree Long Term
Care Insurance Plan (NYPERL). 9
The NYS Partnership for LTC, which became operational in 1993, provided
enrollees who purchased a long term care insurance policy with eventual
access to Medicaid if needed, without having to spend down their assets.
NYPERL, enacted through legislation in 1998, was a group policy for
public employees which was administered by the Department of Civil
Service, but with coverage provided by a private insurance company. The
program offered several favorable long term care insurance options. Both
initiatives eventually floundered, and while legacy policies remain in
force, the programs are now essentially defunct, having ceased to offer
new policies altogether.
The U.S. Treasury-led Federal Interagency Task Force on Long-Term Care
Insurance reported that, of the approximately $217 billion spent on long
term care in the United States in 2018, 70% ($159.1 billion) was paid by
Medicaid, 25% ($55 billion) was out-of-pocket spending, and only 4.5%
($10.3 billion) was paid by private long term care insurance.9 Notably,
those numbers do not account for care provided by loved ones which is
unpaid. The same 2020 United States Treasury report referenced 2013 and
2015 studies which estimated the value of unpaid care during 2011 at
$234 billion and $522 billion, respectively, depending on how the care
was valued, with even the low estimate far exceeding all Medicaid,
private long term care insurance, and out-of-pocket spending combined.
10
Accordingly, private long term care insurance appears to address less
than 2.5t of the need for long term care - private insurance simply
cannot meet this challenge. Approaches that encourage new sales may help
as an ancillary matter, but are sadly inadequate to address the magni-
tude of the gap between what most New Yorkers need and what most New
Yorkers can afford.
From 2000 to 2015, the cost of long term care grew from $30 billion to
$225 billion in the United States, suggesting that the market for long
term care insurance should have seen high demand. Instead, it was during
this time that the bottom fell out of the industry and insurers stopped
offering the product. Various reports, studies, and industry surveys
have suggested that additional consumer financial education, new types
of long term care insurance products, and additional tax incentives will
spur increased consumer interest, but we can no longer wager the saving
accounts of New Yorkers on ideas which have continually failed to resus-
citate significant interest in private long term care insurance from
either insurers or potential insureds. Along with other states like
Washington and California, we must step up to help solve this problem.
We must change our approach if we are to ensure that New Yorkers get the
care they need and are not forced to impoverish themselves in order to
receive it.
The New York Long Term Care Trust Program as created by this bill will
provide universal long term care benefits at an initial rate of $200 per
day for a lifetime limit of 365 days worth of benefits, funded by a
modest payroll tax. The benefit is meaningful: eligible uses for these
benefits are broad enough to cover the panoply of long term care needs,
and the amount is enough to make a difference - it can absorb a signif-
icant share of the financial burden of in-home care for someone who
needs eight hours of support each day. The meaningfulness of the benefit
is balanced by a thoughtful fiscal approach: (1) the premium is expected
to be very small (in Washington State where a similar program has been
enacted, it amounted to 58 cents out of every 100 dollars in wages), (2)
an individual must "earn" the benefit by working at least ten years
during their lifetime, and (3) the individual then must prove that they
need assistance with at least two activities of daily living (such as
bathing, eating, dressing, and toileting) in order to be eligible. Such
an approach delivers a significant benefit when it is needed, without
imposing an unreasonable burden on working New Yorkers; leaves room for
private long term care insurance to offer policies
that can supplement this benefit for those who choose to purchase extra
protection; and will result in savings to the state through reduced
spending on Medicaid.
Furthermore, the bill contains provisions establishing wage protections
for long term care workers, a majority of whom are women of color, and
who serve as the backbone of the long term care industry, yet who often
do not receive a living wage.
To administer the program, the bill draws on the expertise of a wide
variety of state agencies and experts and holds the Long Term Care Trust
Commission responsible for ensuring the long term financial viability of
the long term care trust fund.
The struggle to pay for long term care is an issue that touches almost
every family in New York State - 50% of us will need long term care at
some point in our lives, and yet we do not have a system in place to
mitigate the high costs of such care. This bill recognizes the gravity
of this problem by taking a meaningful, fiscally responsible, and
compassionate approach to addressing one of the most significant finan-
cial burdens that many families will ever face.
 
PRIOR LEGISLATIVE HISTORY:
2023-2024: S8462/A10143, referred to Health Committee
2021-2022: 59082, referred to Health Committee
 
FISCAL IMPLICATIONS:
The Long Term Care Trust Program is designed to be revenue neutral and
self-sustaining in perpetuity. Specific fiscal mechanics are still being
determined. Significant savings to the state are expected in the form of
reduced Medicaid expenditures. Increased economic activity is likely in
the form of a reduction in lost employment output as family caregivers
will increasingly have the option to continue to work rather than being
forced to leave or reduce employment in order to provide care to loved
ones.
 
EFFECTIVE DATE:
The act shall take effect immediately.
1 NYS Department of Health, Long Term Care Planning Project, available
at https://www.health.ny.gov/facilities/long_term_care/planning_project/
2 Richard Johnson, What Is the Lifetime Risk of Needing and Receiving
Long-Term Services and Supports?, U.S. Department of Health and Human
Services (April 3, 2019), available at
https://aspe.hhs.gov/reports/what-lifetime-risk-neediflg-receiviflg
long-term- services- supports -0
3 Priya Chidambaram and Alice Burns, 10 Things About Long-Term Services
and Supports, available at https://www.kff.org/medicaid/issuebrief/
10-things-about-long-term-services-and-supports-ltss/
4 Jordan Rau & Reed Abelson, Financial Ruin is Baked into the System, NY
Times (Dec. 15, 2023), available at
https://www.nytimes.com/2023/12/15/health/readers-long-term-care.html
5 Acrienne A. Harris, Superintendent, NYS Department of Taxation and
Finance, Report to the Governor and Legislature on Long Term Care