State is painting lipstick on long-term-care law

The more people hear about Washington’s coming long-term-care law and payroll tax, the less people like it — and for good reason. A class-action lawsuit has been filed against it, an initiative is being pursued, and Idaho sent the state a cease-and-desist order concerning the law that even impacts workers who live in other states.

Starting in January, the unpopular law imposes a stiff new tax of 58 cents per $100 earned for every W2 worker in the state, with no income cap. The money will go to a new state program, called the WA Cares Fund, providing limited long-term-care services, whether participants ever need them or not.

It’s true that Washingtonians need to plan for their long-term care needs, just like other aspects of life. When that doesn’t happen, Medicaid is often used, and more and more people in our graying population are tapping this limited safety net to avoid using their assets or kids’ inheritance on their long-term care. But Medicaid is a state program created to provide for people who are in need: It is not a health or long-term-care plan for the not  needy.

Many Washingtonians will need long-term care, but lawmakers failed in two significant ways: First, Washingtonians used to have access to private, long-term-care insurance (LTCI) before the state killed that market in Washington. Most people weren’t buying it. Many people plan for long-term care in a different way than buying long-term-care insurance. Also, state rules play a role in making it expensive.

For the many of us for whom long-term-care insurance is a smart bet, keeping regulation and government competition away from the private market will help it provide the kinds of insurance consumers seek. Offering workers an incentive for having such a plan and decreasing the state’s burden could also help.

The law says that “seniors must rely on family care and spend their life savings down to poverty levels in order to access long-term care through Medicaid.” Some state lawmakers want to make people more dependent on the government. But shouldn’t we try to rely on ourselves? Shouldn’t we use our life earnings, when possible, to pay for things we need? Suggesting otherwise is foolish and takes away funds for those who are in true need.

The state’s marketing tries to convince the public that this first-in-the nation program solves the long-term-care problem here and offers peace of mind to individuals. But it doesn’t. There’s a reason why this social program is the first in the nation of its kind. It’s not an attractive solution.

Cynically, the state is trying to appeal to generous Washingtonians by suggesting this program shows care for the elderly who are without other options for funding their long-term care. But does it? Is taking money from low-income wage earners today to give to a high-wealth retiree really compassionate? Absolutely not.

State lawmakers should repeal this unfair, misguided, one-size-fits-some law and discuss better solutions for Medicaid's budget woes.

– Elizabeth Hovde is the Director of the Center for Health Care and Center for Worker Rights. She can be contacted at ehovde@washingtonpolicy.org.