Judd Matsunaga
Sixty years ago, President Lyndon Johnson signed Medicare and Medicaid into law. He said, “There is another tradition that we share today. It calls upon us never to be indifferent toward despair. It commands us never to turn away from helplessness. It directs us never to ignore or to spurn those who suffer untended in a land that is bursting with abundance.” Recently, however, Congress broke that tradition.
Despite his campaign slogan to “Make America Great Again,” on July 4, President Donald Trump signed into law the massive tax and spending bill called the “Big Beautiful Bill.” The new bill cuts more than $1 trillion in Medicaid and federally funded health-care programs over the next 10 years, meaning states and recipients could start seeing real changes or funding cuts as soon as next year (source: www.usatoday.com, Trump Megabill, July 3, 2025).
The bill also adds a “work requirement” to receive Medicaid benefits for able-bodied, childless adults between the ages of 18 and 64 to work at least 80 hours a month to be eligible for Medicaid.
Republican senators are praising the requirement, saying, “We’ve got to get back to work.”
Unfortunately, that’s all “fake news.” The Big Beautiful Bill is going to also hurt millions of older Americans who have paid into the system their entire lives. Justice in Aging’s Executive Director Kevin Prindiville said, “Cutting Medicaid, Medicare, the Affordable Care Act (ACA) and SNAP is morally indefensible under any circumstance, but this bill is particularly cruel, cutting these programs by well over $1 trillion and taking health coverage from 17 million people. These cuts rob older adults and other people struggling to make ends meet to make the billionaires even richer, setting a dangerous precedent that Congress will use these basic needs programs as a piggy bank.”
With the number of Americans over age 65 set to exceed the number of Americans under age 18 by the end of this decade, Medicaid and long-term care is gaining attention as a serious health issue. Long-term care refers to the assistance people receive with activities of daily living (ADLs) due to illness, injury or cognitive impairment.
According to the U.S. Department of Health and Human Services’ Administration on Aging, 70 percent of Americans age 65-plus will need long-term care during their lifetime. Since Medicare and private health insurance plans do not pay benefits for long-term care, individuals can expect to pay more than six figures (i.e., $100,000+) per year for private room care. Will Medicaid or Medi-Cal be there when you may need it? Maybe, but probably not.
As an elder law attorney who has been following Medi-Cal for decades, I want to explain what I think is happening. The government, already running a $1.8 trillion deficit in fiscal year 2024, knows it can’t afford to pay for baby boomers’ long-term care. So, the government is trying to “shift” the financial burden of long-term care off the public sector, i.e., the government, to the private sector by forcing workers to buy long-term care insurance. In other words, the government wants to “privatize” the cost of long-term care by gradually eliminating Medicaid.
In 2022, the state of Washington was the first state to legislate long-term care insurance called the WA Cares Fund. Unless workers have private long-term care insurance, a payroll tax of $0.58 per $100 on income to fund a long-term care benefit of $36,500 over the policy’s lifetime and a maximum of $100 per day would be in effect.
Several state legislatures are already considering mandating long-term care insurance. Those states are Alaska, California, Colorado, Hawaii, Illinois, Michigan, Minnesota, Missouri, North Carolina, New York, Oregon, Pennsylvania and Utah. California has proposed a similar but more flexible insurance program and has created a task force to recommend options for establishing its own state long-term care insurance program.
One day, the government won’t pay for long-term care (LTC). So, looking into LTC insurance now can help you take thoughtful steps in securing your future and protecting your loved ones.
If you can’t get private long-term care insurance, you could end up with the state-sponsored long-term care insurance. That state-sponsored insurance will not be as good as private long-term insurance. However, with private LTC insurance, the policyholder can receive care in various places, including their home, a nursing home, an assisted living facility or an adult daycare center.
Suze Orman, a financial adviser, author and podcast host, suggests long-term care insurance as a crucial part of a comprehensive financial plan, particularly for those over 60.
However, she warns to buy only what is affordable. Orman says to focus on what is safely achievable: Better to buy a policy that will cover 25 percent to 50 percent of future costs than no policy at all.
The traditional argument against long-term care insurance is that if you don’t need long-term care, your years of costly premiums will be spent for no benefit except peace of mind.
To overcome the “use it or lose it” argument, financial adviser and radio personality David Ramsey recommends bundling LTC insurance with life insurance so that upon your death, the unpaid portion of the death benefit — that was not used to pay long-term care benefits — will be paid to your beneficiaries on a tax-favored basis.
Judd Matsunaga is the founding attorney of Elder Law Services of California, a law firm that specializes in Medi-Cal Planning, Estate Planning and Probate. He can be contacted at (310) 348-2995 or. The opinions expressed in this article are the author’s own and do not necessarily reflect the view of the Pacific Citizen or constitute legal or tax advice and should not be treated as such.
