Paid Family and Medical Leave, and Long-Term Care

The Problem

Many adults must take time out of employment to care for their children and/or their parents, friends and neighbors, and increased out-of-home services can provide only a partial solution. We all need time, money, and space to develop and strengthen relationships with those we are committed to caring for.

Past Failures

Despite much pro-family rhetoric, the U.S. does not offer either paid family and medical leave from employment, or adequate support for in-home services for persons experiencing disability or frailty. Most other affluent countries do a far better job of caring for their citizens. Recent cuts in federal social spending have exacerbated economic stress for those too young, too old, too disabled, or too sick to care for themselves, and for those struggling to care for them. New initiatives such as paid family and medical leave and expanded subsidies for home-and-community based care can be framed as valuable social investments.

Game Changers: Paid Family and Medical Leave, and Long-Term Care Services

We propose that the federal government require states to establish a paid family and medical leave program that follows models established by California and Massachusetts, while adding a “use it or lose it” component to encourage paternal take-up. Likewise, the federal government should increase support for home and community-based services and mandate state-level adoption of long-term care insurance based on the Washington state model. Single parents should be eligible for longer leaves than parents with a co-resident partner.

While the Family and Medical Leave Act of 1993 required large employers to provide job-protected unpaid leaves from employment, it left many employees uncovered, and many others unable to afford to take it. Many private employers now offer paid leaves but typically restrict eligibility to top employees (the college-educated enjoy far more coverage than others). Many Americans find it difficult to reconcile competitive job pressures with personal and family care needs.

In recent years, 14 states plus the District of Columbia have implemented policies that offer partial wage replacement for eligible workers needing time off for family or medical reasons, primarily financed through payroll taxes. These programs provide a basic model for the development of a federal paid leave policy.

As the average age of the U.S. population has increased, so too has the need for long-term care. More than 70% of adults turning 65 today are expected to eventually need sustained assistance, and the costs in both time and money can be prohibitive.

The federal Medicaid program provides means-tested assistance for long-term care only for those below a very low level of wealth and income. Many states have shifted their federal Medicaid funds for means-tested assistance away from nursing homes toward home-and-community-based care, often allowing beneficiaries to hire their own service providers, including family members. This strategy has proved both popular and cost-effective.

Here again, states have taken the initiative. Washington has recently established a mandatory state-run insurance program funded by a payroll tax. Starting in 2026, eligible workers can access up to $36,500 (adjusted for inflation) for services like home care. This program provides a basic model for development of federal long-term care insurance.

Rationale & Feasibility

Reluctance to expand investment in social insurance in the U.S. has been amplified by the claim it represents “unproductive” expenditures that threaten economic growth. However, “productivity” should be redefined to include measures of our success in caring for ourselves and our dependents — producing, developing and maintaining the human capabilities that our society depends on.

Most of us rely on an implicit family-based insurance system for the care of dependents, with women often taking on primary responsibility. Changes in family structure, including increased instability of parenting relationships, fertility decline, and increased geographic mobility, have weakened this system, and the resulting stresses are unevenly distributed, with the effect of discouraging family commitments.

While public insurance provision requires careful design and monitoring, it offers important advantages by pooling risks, providing reliable assistance, and keeping administrative costs low. Specific targeted payroll taxes, like those adopted by some states, provide a feasible financing mechanism. However, since taxes on labor far exceed taxes on investment gains, surtaxes on exceptionally high income and wealth should also be considered as a means of lowering the hidden costs of unmet needs and unpaid care.

Measurable payoffs to these policies will come in the form of improved physical and mental health for the U.S. population, stronger families and communities, and greater trust and confidence in our ability to translate economic growth into improved well-being.