State-Based Social Insurance Programs for Early Child Care and Education, Paid Family and Medical Leave, and Long-Term Services and Supports

Executive Summary

The dynamics of work and family life have shifted over the past several decades, but public policy has not kept pace with working families’ changing needs. As households increasingly rely on the income of all working-age adults to make ends meet, many families now lack a stay-at-home caregiver. Moreover, our disparate programs are not well-designed or integrated to address the reality that family caregiving needs—including those related to early child care and education (ECCE), paid family and medical leave (PFML), and long-term services and supports (LTSS)—overlap and change over the life course.  

A patchwork of federal programs exists to help poor and low-income families pay the costs of early child care and education. These programs are chronically underfunded, however, and fail to serve a significant share of even the fraction of families with sufficiently low income to qualify.

In the absence of a national PFML policy, four states—California, New Jersey, New York, and Rhode Island—have implemented PFML social insurance programs, and four more jurisdictions—the District of Columbia, Washington, Massachusetts, and Connecticut—have recently enacted bills that currently await implementation. In the vast majority of states, however, most workers—when they need time away from work to care for a loved one and/or cope with a health problem of their own—lack access to paid leave. If they take leave to recover from an illness or care for a loved one, they risk significant wage or even job loss.

Long-term services and supports (LTSS) needs are growing, and for a variety of reasons families are becoming less able to meet them. One in two of those turning 65 today will need LTSS. Around 40 percent of those needing LTSS today are under 65; many will require lifelong services and supports. LTSS can be costly for both those needing care and family caregivers.

Each chapter in this report analyzes these care policy challenges and presents policy options for states to consider in addressing them. All options are based on an underlying presumption of universality, that is, care supports that are not means-tested. Thus, the report is focused on state-based, social insurance approaches. The first chapter presents three approaches states could take to provide universal access to early child care and education: (1) comprehensive universal ECCE, which would place ECCE more on par with primary and secondary school education by entitling all children to publicly funded ECCE; (2) employment-based, contributory ECCE, which would entitle all children to ECCE if their parent(s)/guardian(s) are sufficiently attached to the labor force; and (3) a universal ECCE subsidy, which would entitle all families to a subsidy to cover a portion of the cost of ECCE for their children.

The second chapter presents three policy options for states interested in developing a PFML program: (1) The first is a universal, contributory social insurance program with an exclusive state fund; where, all workers would contribute to a state social insurance fund out of which all benefits would be paid; (2) a contributory social insurance program with regulated opt-outs, where employers would be required to offer a certain level and type of coverage and to comply with specified anti-discrimination and other consumer protections, but would be free to choose between utilizing the state fund, self-insuring, or purchasing a private plan for coverage; and (3) an employer mandate, where employers would be obligated to provide paid leave benefits directly to their workers, either by self-insuring or by purchasing private coverage.

The third chapter analyzes four key decision points for states considering introducing an LTSS social insurance program, such as the one Washington State introduced in 2019. A primary consideration relates to program structure, i.e., who will be eligible for the program’s benefits, how will generational transition issues be addressed, and will front-end, back-end (catastrophic), or temporally unlimited coverage be offered? The second design choice is the financing approach: Will the program be funded through payroll contributions, an income tax, or some other dedicated revenue source? And will it be financed on a pay-as-you-go or prefunded basis? The third decision point concerns program integration. How will the new program mesh with Medicaid LTSS and private long-term care insurance? Finally, what implementation challenges must be navigated? How will the program be administered, revenues collected and managed, eligibility determined, and program integrity ensured?

The concluding chapter of the report explores what an integrated approach to supporting families in meeting their care needs might look like. We refer to this approach as Universal Family Care (UFC), and present several options for how this might be structured, should a state decide to move in this direction. In this approach, all workers would contribute to a care insurance fund which would pay out ECCE, PFML, and LTSS benefits when these needs arise. The fund would provide these benefits through a single, integrated access point for families. In crafting a UFC program, states would need to make design choices about a variety of issues including who is covered and for what, the sources of funding, eligibility requirements, benefit adequacy, and qualifying events. To understand tradeoffs in design choices, we present four illustrative UFC designs, each expressed as packages of ECCE, PFML, and LTSS benefits. The choices vary primarily by their benefit generosity and by whether the program is funded solely by contributions or also by additional revenues to achieve universal coverage. Once a state has decided upon a structural design approach, choices would remain concerning the degree of internal UFC integration across its ECCE, PFML, and LTSS components, as well as the relationship of UFC benefits to existing ECCE programs and Medicaid LTSS.