Ben Veghte Describes Two Models for Long-term Care: Washington and the Netherlands

Hope for the future if we can get our act together

My fascinating conversation with Ben Veghte, executive director of the Washington Cares Fund, covered both this innovative model for public financing of long-term care and a study he conducted of the Dutch approach to senior care.

The Washington Cares Fund

The Washington Cares Fund is a unique public long-term care financing mechanism that beginning on July 1, 2026, will provide all participating Washington State residents with up to $36,500 to use towards long-term care costs. This stipend is financed by a 0.58% payroll tax that began in July 2023.

To qualify for the benefit, residents must have contributed for 10 years, though there are special rules for those who become disabled before they’ve worked that long or who were already nearing retirement age when the Fund was established. Those residents who move out of state can opt to continue to participate in the plan.

I asked Veghte what to me was the obvious question or perhaps flaw in the plan, that $36,500 is not very much given the high cost of long-term care. His response was that the Washington plan is a stepping stone in two ways, for a change in social policy and for beneficiaries to plan for their care.

“It's a first step, a critical first step. This is establishing the architecture of universal coverage, which is the foundation for everything that's going come from now on. You're going to see more states do this. And, ultimately, I'm confident the federal government will do this sometime in the next 10 or 20 years because it's essential.”

He explained that the concept of universal coverage is a big change from the American point of view that everyone should take care of themselves and their families until they’re destitute, and only then will the state step in. “It's a big lift from a political cultural perspective to take this from being a private family problem to a shared social problem. That was a paradigm shift that we managed to achieve in our state. But that's a big lift. So we started with baby steps. WA Cares is a very modest premium for a modest benefit.”

Veghte suggested that even the modest benefit could have a big impact for families needing a respite for caregiving they provide. In addition, by covering the first tranche of the cost of care it can make long-term care insurance more affordable. In effect, it allows people to purchase private long-term care insurance with a large deductible amount covered by the Washington Cares Fund.

Washington is now working on a state-sanctioned version of the insurance. “For the first time since the 1990s, long-term care insurance can become affordable again for teachers, firefighters, average people who want to buy an extra $50,000 or $100,000 of coverage on top of their WA Cares benefit.”

The Dutch Model

We switched gears and Veghte described how the Netherlands provides high-quality long-term care at a relatively low cost. Some of this, he explained, had to do with the greater availability of comfortable senior housing and the custom that older adults move out of their homes to make way for younger families. As a result, the housing shortage in the Netherlands is not as severe as in the United States.

It’s also much less expensive to provide needed care in a congregate setting than to seniors scattered in single-family homes around a community. In addition, these communities create social bonds through which residents care for one another. (I discussed the benefit of this approach in two prior podcasts with Lizbeth Heyer of 2Life Communities in Massachusetts and Derenda Schubert, the founder of Bridge Meadows in Oregon.)

As Veghte further explains in the study he conducted for the National Academy of Social Insurance, Promising Policy Innovations to Make Aging in the Community Affordable for All: Lessons from the Netherlands, unlike the United States, the Netherlands has universal health insurance coverage that includes long-term care. But, Veghte explained, they were also seeing a great increase in need and costs, especially projected out over the next two or three decades. The Netherlands is also unlike the United States in that it has a single payer for all these costs and no for-profit companies are involved. As a result, they are able to engage in comprehensive, multi-sector planning to plan the care their seniors need.

In contrast, the United States has a segmented system of providing care with the involvement of many private, public, for-profit and non-profit entities. Yet Veghte is hopeful that the United States still can undertake multi-sector planning. He cites a strategic framework for such planning released by the Administration for Community Living before it was shut down by the Trump administration. “We need to invest in this sector, not extract value from it. And we really need to realign, restructure the entire long-term care system. That's where I think looking at other countries that have already cracked the code on this can be really edifying.”

Veghte also expressed optimism about other initiatives that can increase housing options and supports for older adults. Instead of the low-income housing tax credit, our main mechanism for supporting the construction of lower-income housing in the United States, he suggests that through social investing wealthy individuals might support housing cooperatives while still earning a somewhat lower rate of return than they would with traditional investing. This model has worked in the Netherlands and other places in Europe.

The village network, pioneered by the Beacon Hill Village in Boston, brings together seniors in communities to provide reciprocal care. That keeps costs down and prevents participants from requiring hospital and nursing facility care.

Universal Coverage

To my final question about what one initiative he would recommend to policy makers, Veghte returned to universal long-term care coverage. Medicaid, he explained, is a zero-sum game. The only way for the federal and state governments to save money is to limit eligibility or reimbursement rates. “The age wave is increasing our caseload count. Every state in the country is dealing with that right now. But with universal coverage, you have middle income people and upper income people who all have a stake in the quality of care, and they're not going put up with having the quaility of services financed by Medicaid rates for their care providers.”

And he believes most people would accept the necessary premiums. “Just like with Social Security, if we ask our parents ‘Do you regret having paid into Social Security and Medicare?’ you won't find a single older adult who says, ‘yeah, I really regret that.’”

Topics

00:58 Understanding the Washington Cares Fund

01:48 How the Washington Cares Fund Works

03:14 Challenges and Benefits of the Program

09:55 Personal Stories and Real-Life Applications

12:55 Eligibility and Participation

15:57 Accessing and Using Benefits

16:58 Out-of-State and International Care Solutions

17:48 Exploring Long-Term Care in the Netherlands

19:01 Universal Coverage and Equity in Care

21:23 Person-Centered Aging in the Netherlands

25:19 Lessons for the U.S. from the Netherlands

32:03 Recommendations for Policymakers and Baby Boomers