Workers' pay to fund care program

There was some good news recently coming out of a meeting concerning a 2019 law creating a state-run, long-term-care program to be funded through workers’ paychecks starting in January.

In case you’re not in the loop, a payroll tax of 58 cents per $100, with no income cap, begins Jan. 1 to fund the Washington Cares Fund.

Statutory employees earning $50,000 a year will pay $290 annually, those who make $100,000 will contribute $580 each year, and so on. Some workers who pay in for a set number of years will one day be eligible for a lifetime long-term-care benefit of $36,500, should they need long-term care and regardless of how much money they put in during their working years.

Long-term care refers to non-medical care for patients needing assistance with basic daily activities. The state will require that a person needs assistance with three daily-life activities to be eligible for benefits, while private long-term-care plans usually require needing help with just two.

The commission working on this new entitlement program admits that the Washigton Cares Fund creates “a long-term benefit for all eligible employees that will cover some of the cost of long-term services and supports.”

Many people know $36,500 will not cover the costs usually associated with long-term care. Many do not.

Meanwhile, the state's new website – built in part to create “affinity” for the fund – erroneously states that the Washington Cares Fund addresses the need and gives Washingtonians peace of mind. “By contributing a small amount from each paycheck while we’re working," the site says, "we can all pay for long-term care when we need it.” That’s not so. But it is good marketing.

What the fund should help do is save the state Medicaid dollars by having workers for more of the safety-net program that some people do use for their long-term-care needs. Even low-income workers don’t win with this tax, as their paychecks are lowered during their working years for a benefit they might never use. And the inadequate lifetime benefit will put Washingtonians without long-term-care plans right back on Medicaid reliance when the $36,500 is gone.

But back to the good news: The Long-Term Services and Supports Trust Commission, which consists of legislators, administering agencies and stakeholder representatives, established an eligibility work group to deal with some of the glaringly unfair provisions in the law.

We’re glad the commission is hearing and acknowledging the numerous complaints.

Eligibility problems written into the law include vestment periods that mean money is taken from some soon-to-be retirees who will never qualify for benefits. People who pay in for years, but then retire to sunny Arizona, will forfeit their benefit, as it is not portable. And workers who live out of the state, but work for a Washington employer, will be taxed but not eligible as long as they live out of state.

There is opt-out language in this law: People with their own, private long-term-care insurance policies will be able to avoid the tax.

Even a newly formed eligibility work group and possible eligibility changes can’t make this law likeable. Taking away people’s choices about how they spend and save their money isn't popular.

Washington Policy Center is suggesting lawmakers repeal the law, given its many practical and philosophical problems.

They should do what they should have done in the first place: use their bully pulpits to sound the alarm that some of us need to prepare better for long-term care. It is something a lot of us will need at some point in our lives.

– Elizabeth Hovde is a former journalist who writes for the Washington Policy Center. Email her at ehovde@washingtonpolicy.org.