WISH Act Creates New Federal Insurance to Cover Long-Term Care Costs Exceeding $298,000

The newly proposed Well-Being Insurance for Seniors to be at Home Act (WISH Act) is a major attempt to solve one of the biggest financial time bombs facing middle-class Americans: the cost of long-term care. Simply put, this bill creates a brand new federal Long-Term Care Insurance Benefit under the Social Security Act. The goal is to provide a financial safety net for people who need extensive long-term services and supports (LTSS) for many years, helping them stay in their homes and avoiding the need to drain their savings until they qualify for Medicaid.

The Long-Term Care Safety Net

Congress is pretty clear on the problem: over half of us will need LTSS as we age, and the average cost for a serious disability lasting two years is nearly $300,000. Since private long-term care insurance is expensive and rare, most families are forced to spend down everything they own until they hit poverty levels. The WISH Act creates a new benefit to cover the risk of very long care periods. To qualify, you must be old enough for Social Security retirement benefits, be “insured” by earning at least six quarters of coverage since 2026, and have a “continual serious functional disability” that has lasted for a “substantial period of time.”

How the Payouts Work (And Why It Gets Complicated)

If you qualify, your monthly benefit isn’t a fixed number. It’s calculated based on a national estimate of what it costs to pay for six hours of personal assistance care per day, adjusted by your personal work history. That work history is translated into a ratio based on how many quarters of coverage you have compared to 40. This system directly links the benefit to the actual cost of care and your contributions.

However, there’s a tricky part: the amount of time you must be disabled before benefits kick in—the “substantial period of time”—varies. If your past earnings were low (at or below the 40th percentile), you only need 12 months of disability. But if your earnings were higher, that waiting period increases by one month for every 1.25 percentile interval above the 40th mark. This complex, sliding scale is meant to ensure those with higher lifetime earnings carry more of the initial risk, but it makes the rules significantly harder to explain to a busy person trying to plan their future.

Protecting Your Nest Egg and Hiring Help

One of the most important features is that any money you receive from this new Long-Term Care Insurance Benefit will not count as income or resources when determining eligibility for other federal, state, or local assistance programs, including Medicaid. This is huge—it means the benefit truly protects your life savings without jeopardizing other safety nets.

On the flip side, the bill places a new responsibility on recipients. If you use your benefit to hire a non-family member for personal care, you become the employer and must follow all minimum wage and payroll tax laws. You have to annually affirm to the Social Security Administration (SSA) that you are complying with these laws. For someone already struggling with a serious disability, managing payroll taxes for a caregiver could be a significant administrative burden, even if it ensures workers are paid legally.

Planning for the Future: Personalized Notices and Education

The WISH Act mandates a massive, 10-year public education campaign to teach people about the high costs of long-term care and the importance of planning. Even better, the SSA must start sending personalized notices to workers showing them exactly where they stand. These notices will detail your estimated long-term care earnings, your coverage status (how many quarters you’ve earned), and your projected benefit percentile. The SSA must send these notices when you turn 45, 55, 65, and again at retirement age, ensuring that this critical information hits your mailbox at key life planning stages.

To get the program started, the bill creates the Federal Long-Term Care Insurance Trust Fund, initially funded by $12 million annually for three years for setup costs, plus $50 million dedicated just for the public education campaign. The money in this fund can be invested in “conservative market securities,” similar to the existing Social Security Trust Funds.

The Check-Up: Oversight and Unmet Needs

Because this is a brand new program, the bill builds in significant oversight. The Government Accountability Office (GAO) will conduct mandatory check-ups every three years starting five years after the law passes. They specifically have to look for two major risks: eligibility manipulation (people trying to cheat the system) and financial exploitation of beneficiaries by caregivers or representatives. This shows Congress knows the potential for abuse exists and is trying to get ahead of it.

Finally, the bill acknowledges that not everyone will be covered. People who became disabled early in life or before they earned enough work credits won't qualify for this specific benefit. The Department of Health and Human Services (HHS) must regularly report on these unmet needs and propose strategies to help those overlooked populations, ensuring the conversation about long-term care doesn't stop with the WISH Act.