At the start of a new legislative session, the payroll tax funding a new long-term care program is a top concern. Since its introduction in 2019, the WA Cares bill was far from perfect. Legislators on both sides of the aisle said much needed to be fixed before the program could be fully rolled out at the start of January 2022. And yet, nothing was done until the November 2021 deadline to opt out of the program whizzed by. Only then did it start dawning on legislators that the “few” wrinkles that still needed ironing out were in fact rips in need of immediate attention.
This long-term care legislation is an attempt to ease the strain on the overloaded Medicaid system — a first of its kind in the nation — and to prepare for the near doubling of the senior population in need of support services predicted for 2040.
This is an important issue to tackle, but there are several problems.
First, the state only created one opportunity for people to opt out of WA Cares. After Nov. 1, 2021, anyone not able to find a qualified long-term care insurance policy is now stuck paying a 0.58% portion of their wages to the fund starting July 2023 — the new start date after a general outcry pushed state lawmakers delayed the tax rollout.
Second, the legislation does not account for those who must pay but will never reap the benefits. Washingtonians close to retirement, for example, will pay into the fund but not long enough — one must pay in for up to 10 years — to be vested. And those who work in Washington but live elsewhere? Not being state residents, they are now stuck paying for future benefits they will never be able to access. As a melting pot of Washingtonians and Oregonians, the Walla Walla Valley is directly affected by this unfair taxing of out-of-state workers.
Third, the price of these policies denies lower-income populations a choice to opt out of the WA Cares Fund. KUOW reports that long-term care plans “can easily cost $1,000 a year or more.” And that’s if a person even qualifies for a plan. If an applicant has any pre-existing health conditions, they’re toast. Beyond that, paying for an expensive private policy on a retiree’s fixed income is not feasible.
Fourth, those stuck with paying the payroll premium, should they move out of state, lose access to the fund they had no option but to pay into. If there is any change we hope to see implemented, it’s that this access becomes portable. Those vested and eligible can collect up to $36,500, an amount significantly lower than what is and will be needed (inflation exists) to pay for long-term care. Though it’s not much, any little bit helps.
In the meantime, we’re glad to see legislators working to address some of the glaring issues at the start of this legislative session.
Accorded to the Seattle Times, “House Bill 1733 would allow some people not likely to receive benefits or who already have some coverage to opt out of the program and the payroll tax.” In addition, non-resident workers would have an opportunity to opt out should this bill pass.
This is sensible start. But there’s still a long way to go for this program to make sense.
Legislators, you have until 2023. Make it count.