By Judd Matsunaga, Esq.
“There are really only three types of people: (1) those who make things happen; (2) those who watch things happen; and (3) those who say, What happened?” ― Ann Landers (aka Dear Abby)
This Rafu Shimpo article is to help get more Rafu readers into the middle group: observing events as they unfold, potentially learning and gaining insights and information so that they can be better prepared for the future. So here’s what’s happening when it comes to healthcare for seniors:
On July 1, Gov. Gavin Newsom signed the state budget for the fiscal year starting July 1, 2025. This budget addresses a projected $12 billion deficit through a combination of fiscal responsibility strategies, including Medi-Cal. Bottom line — it’s going to get much harder to qualify for Medi-Cal and IHSS.
Effective Jan. 1, 2026, the asset limit of $130,000 for individuals and $195,000 for couples will be reinstated. Also, Newsom plans to freeze full-scope Medi-Cal enrollment for undocumented adults starting Jan. 1, 2026.
On July 4, at the federal level, President Trump signed into law the massive tax and spending bill called the “Big Beautiful Bill.” The mega-bill cuts more than $1 trillion in Medicaid (California’s Medi-Cal) 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, “House Passes Trump’s Megabill, Securing a Big Win for the GOP Agenda,” July 3, 2025).
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.” (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.”
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, Medi-Cal and long-term care is gaining attention as a serious health issue. Long-term care (LTC) 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.
According to the U.S. Department of Health & Human Services’ Administration on Aging, 70% of Americans age 65+ will need long-term care during their lifetime. If you’re over 60, DON’T BE MISINFORMED. Medicare and private health insurance will not pay for long-term care. So, if you’re one of the 70% 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.
Will Medicaid or Medi-Cal be there when you may need it? Maybe, but probably not.
After three decades as an elder law attorney (very familiar with Medi-Cal) and a degree in economics from UCLA, 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. How? 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 and Medi-Cal. It’s already started. In 2022, the state of 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 until news headlines revealed how companies and individuals were scrambling to find private policies that would allow them to opt out of the state plan by the deadline and thereby avoid the payroll tax of $0.58 per $100 on income. The tax is for employees only, and there is no income cap.
Unless workers have private long-term care insurance, they were forced to pay for the state plan, which isn’t very good. The long-term care benefit of $36,500 over the policy’s lifetime and a maximum of $100 per day. 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. The state of California 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% 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 shopping for LTC insurance to secure your future and protecting your loved ones. That way 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 are 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 advisor, 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 says to focus on what is safely achievable: Better to buy a policy that will cover 25 to 50% of future costs than no policy at all.
David Ramsey, financial advisor 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 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.
If you live in or around Los Angeles County, I personally recommend calling Jeffrey Parmer, with New York Life in Glendale. “Whether you’re looking to stay out of a nursing home, to avoid turning loved ones into caregivers, or to protect your nest egg, we have ways to help. Helping clients understand their options and achieve their goals are what make my job so rewarding. Every client is unique, so together we can develop a personalized approach that meets today’s needs and tomorrow’s as well,” says Parmer.
The major argument against buying LTC insurance is that if you don’t need it, you lose it, i.e, you got nothing is return for your years of paying costly premiums (except peace of mind). “At New York Life, we have a solution to guard against that,” says Parmer. To overcome the “use it or lose it” argument, ask about bundling LTC insurance with life insurance.
“Say what?” you say. Life insurance with a LTC rider means that if you never use it for LTC, it’s paid as life insurance.
“You get a dual benefit,” says Parmer. If you need LTC, the rider allows you to access a portion of the death benefit to pay for those costs. If you die without needing long-term care, the policy still pays out a death benefit to your beneficiaries. Of course, the LTC rider will require additional premiums to be paid in addition to the base premiums of the underlying life insurance policy. These premiums can vary depending on your age, health and other factors.
In conclusion, the best time to buy life insurance is while you’re still alive. The best time to buy LTC insurance is while you’re still healthy.
We’re all getting older and the government may soon stop paying for LTC. Like in Washington, California workers could soon be forced into buying LTC insurance. Since California is a much larger state than Washington, the California LTC insurance market could easily be flooded if the law changes, leaving thousands of seniors with state-sponsored LTC insurance that is not any good.
Judd Matsunaga, Esq., is the founding partner of the Law Offices of Matsunaga & Associates, specializing in estate/Medi-Cal planning, probate, personal injury and real estate law. With offices in Torrance, Hollywood, Sherman Oaks, Pasadena and Fountain Valley, he can be reached at (800) 411-0546. Opinions expressed in this column are not necessarily those of The Rafu Shimpo.