The Well-Being Insurance for Seniors to be at Home, or WISH, Act “substantially improved retirement-income adequacy,” particularly for unmarried individuals and households with higher projected costs for long-term services and supports, in a new simulation by Chicago-based insights provider Morningstar.
The WISH Act, re-introduced earlier this year by Rep. Tom Suozzi (D-NY) after it failed to advance in 2021, would establish a federal catastrophic insurance program for LTSS, splitting some of the expenses between beneficiaries, private insurance and the federal government. LeadingAge previously said that it supports the legislation, and Argentum and the American Seniors Housing Association previously said that they support creating a public catastrophic long-term care benefit that includes all settings, especially assisted living.
“We’ve got all these people turning old who are not going to be able to do their two activities of daily living, and they’re going to have a big problem if they don’t have long-term care insurance,” Suozzi said earlier this year at the LeadingAge Leadership Summit. “If we try to send all the aging seniors into nursing homes, there won’t be enough beds, there won’t be enough employees, and the Medicaid system will completely go bunk. There’s no question about it.”
The bill does not specify a fixed benefit amount, tying the monthly benefit to the “median cost of six hours per day of paid personal assistance in the United States, indexed to wages in the long-term-care sector,” according to the report. The authors, however, noted that “[s]taff working on the bill estimate that the benefit payment would be approximately $4,000 per month in today’s dollars.”
As the bill is written, to qualify for the benefit, individuals would have to have made at least six quarters of payroll tax contributions during a base period that begins with the first quarter of 2026. People would receive a proportionally reduced benefit until they individually accrued 40 quarters of coverage during the base period.
Overall, the report found that among members of Generation Z, millennials and members of Gen X projected to qualify for WISH benefits, 19% would have a retirement shortfall with the program, but 42% would have a shortfall without it.
Also:
- 16% of couples would have a retirement shortfall with the WISH Act, versus 34% without it.
- 19% of single men would have a retirement shortfall with the program, versus 48% without it.
- 28% of single women would have a retirement shortfall with the program, versus 58% without it.
Members of Gen Z and millennials saw larger gains in the simulation than did Gen X households.
- For members of Gen Z, 24% would have a retirement shortfall with the WISH Act but 49% would have one without it.
- For millennials, 19% would have a retirement shortfall with the program, versus 45% without it.
- For members of Gen X, 20% would have a retirement shortfall with the program, versus 37% without it.
Additionally, middle-income households experienced the largest reductions in the shortfall rate, according to the authors.
“If enacted, the WISH Act could be one of the most significant shifts in retirement risk management in decades, as our analysis shows that the proposal could meaningfully improve retirement outcomes for those with catastrophic LTSS needs,” according to Morningstar.
The researchers said they plan to investigate the impact of private long-term care insurance on retirement income adequacy in the future.
Read more about the WISH Act and the Morningstar analysis in the report.