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Vermont treasurer urges careful design of long-term care trust fund, agrees to join study
Summary
State Treasurer Mike Pieciak told a legislative committee that a long-term care trust fund merits study but warned the state must design it to avoid creating an unfunded liability; Pieciak said his office would participate in a feasibility study.
State Treasurer Mike Pieciak told a legislative committee that studying a proposed long-term care trust fund is worthwhile but cautioned the state to design any program so it can remain fully funded and not create an unfunded liability.
Pieciak, a former commissioner at the Department of Financial Regulation, said the commercial long-term care insurance market serves only a small share of Vermonters, that the cost of care has risen well above inflation and that actuaries have repeatedly been surprised by rising liabilities. “I think everything you said is 100% true and rings true to me. Like this is a big challenge for us. We’re an older state,” Pieciak said. He added, “we’d be happy to be on the study committee and happy to provide our perspective and background and expertise as it may be.”
Why this matters: Vermont’s aging population, limits in the private long-term care insurance market and the large role of Medicaid in paying for long-term care mean policy choices about coverage, eligibility and funding could affect the state budget and access to care for residents.
During roughly an hour of discussion, lawmakers and Pieciak identified several design questions for a study. Representative Doug Bishop noted language in draft legislation that would begin collecting funds in 2026 and require at least three years of collections before benefits could be paid; the draft also included an eligibility provision tied to two years of contributions. Bishop raised those timing and solvency concerns to underscore the need for actuarial analysis and scenario modeling.
Pieciak recommended that the study evaluate both how to pay for benefits and ways to lower overall long-term care costs in Vermont. He pointed to a blended assisted-living model in Vergennes that accepts both Medicaid and private-paying residents as an example of a facility type that can expand access while moderating costs. He also likened risks to past pension funding shortfalls, saying the state should guard against promising future benefits it cannot afford.
Lawmakers discussed a range of policy options mentioned in the hearing, including voluntary payroll deductions, a defined-benefit versus a defined-contribution structure, and the so-called Medicaid long-term care partnership program used in other states. Pieciak observed that many of the factors that affect long-term care costs are difficult for actuaries to foresee and recommended Monte Carlo–style scenario work to show ranges of likely outcomes rather than a single estimate.
No formal vote or directive was taken at the session. Committee members said they want more information before crafting legislation; Pieciak agreed to participate on a feasibility study committee and to provide the treasurer’s office perspective and technical assistance if asked. The committee indicated it will continue work on the legislation at future meetings.
