Judd Matsunaga
On July 4, 2025, President Donald Trump signed the “Big Beautiful Bill” into law. The massive tax and spending bill cuts more than $1 trillion in Medicaid (California’s Medi-Cal) and other federally funded health care programs over the next 10 years. The Big Beautiful Bill is going to hurt millions of older Americans who have paid into the system their entire lives (source: www.usatoday.com, July 3, 2025).
“Cutting Medicaid, Medicare, the Affordable Care Act 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,” said Justice in Aging Executive Director Kevin Prindiville (source: www.justiceinaging.org).
Prindiville continued, “These cuts are so much more than the shocking numbers; they tear the very fabric of our communities and break the promise that people in America can depend on this assistance as they age.
For decades, lawmakers and advocates have worked together to strengthen Medicaid, Medicare and SNAP and help ensure people who cannot afford health care and food can access it.
This bill rolls back that progress, endangering the lives of today’s older adults and ripping away the foundation for the next generations to be able to age with dignity.”
According to the U.S. Department of Health & Human Services, 70 percent of Americans age 65-plus will need long-term care during their lifetime.
Long-term care refers to the assistance people receive with activities of daily living (ADLs) due to illness, injury or cognitive impairment.
These include bathing, dressing, eating, transferring and toileting. So, if you’re one of the 70 percent that need LTC (and you don’t have long-term insurance, you can expect to pay $100,000-$250,000 per year (out of pocket!!!) for private room care.
DON’T BE MISINFORMED. Medicare and private health insurance will not pay for long-term care. Will Medicaid or Medi-Cal be there when you may need it? Maybe, but probably not.
Here’s my understanding of what is happening behind the scenes.
The government, already running a $1.8 trillion deficit in fiscal year 2024, knows it can’t afford to pay LTC for the 76.4 million baby boomers in America.
So, the government is gradually shifting the financial burden of long-term care off the public sector, i.e., the government, and onto the private sector.
In other words, the government wants to “privatize” the cost of long-term care by gradually eliminating Medicaid and Medi-Cal. In the not-too-distant future, workers will be forced to buy long-term care insurance — and it has already started.
In 2022, Washington was the first state to legislate long-term care insurance, called the WA Cares Fund. Most Washington residents weren’t aware of the legislation.
Many were left scrambling to find private long-term care policies that would allow them to opt out of the state plan.
Unless workers have private long-term care insurance, they were forced to pay the payroll tax of $0.58 per $100 on income for the state plan that isn’t very good.
The lifetime maximum benefit is $36,500 (adjusted annually for inflation). Benefit recipients must need assistance with three or more activities of daily living (ADLs), while private individual LTC insurance typically requires only two.
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.
In California, the task force appears to be recommending a more flexible program than the WA Cares Fund. For example, assistance required with two ADLs needed for qualification (not three as with the WA Cares Fund plan), possibility of both employer and employee contributions and payroll tax up to 2 percent with no income cap. Legislative action would need to be taken before any program could be established.
One day (perhaps soon), the government will no longer pay for LTC. So, now is the time to shop for LTC insurance to secure your future and protect your loved ones so that you don’t have to “scramble around” looking into LTC insurance when the time comes.
Also, if you are already in poor health when you apply for long-term care insurance, the costs will be higher, and you may not be able to get coverage at all. So, it makes sense to start shopping for LTC insurance now while you are still healthy.
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 care insurance. For example, it might only cover facilities that are understaffed, provide minimal care and dark, dingy and smell bad, e.g., a LTC dungeon where people are sent to die.
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.
“It makes no sense to buy a policy today that you will have to abandon in a few years because it is too expensive; you will get no benefit if that happens,” she said. She says to focus on what is safely achievable: Better to buy a policy that will cover 25 percent-50 percent of future costs than no policy at all.
David Ramsey, financial adviser and radio personality, says LTC insurance is a vital tool for protecting your savings and ensuring you can afford necessary care without burdening your family.
He says “self-insuring” is worth considering for people with a very high net worth. But he acknowledges that most people cannot afford to pay for long-term care out of pocket without significant financial strain.
Ramsey suggests considering LTC insurance around age 60, but he acknowledges that the need for it may arise earlier or later depending on individual circumstances.
He also recommends a benefit period of three to five years, which aligns with the average length of time people need long-term care.
When purchasing LTC insurance, Ramsey stresses the importance of working with an experienced agent who can help you find the right policy and navigate the complexities of the insurance.
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.
