Guest Opinion Post by Sen. Brad Hawkins
I have received considerable correspondence in recent weeks concerning the upcoming implementation of the “Washington Cares Fund.” This 2019 law created a trust to implement a new statewide long-term care program following the approval of House Bill 1087.
Many of us who voted against the bill argued at the time that it was flawed and would lead to a multitude of problems. Due to many implementation issues and public frustration, Governor Inslee, in 2021, temporarily ordered the state Employment Security Department not to collect tax premiums for the program, which effectively paused its implementation. The Legislature in 2022 officially delayed the program.
Delayed program to take effect.
What is funded by the program?
After much delay, Washington’s long-term care program – and its payroll tax – is scheduled to go into effect in July. All workers are required to pay into the program regardless of whether they will receive benefits from it. This mandatory program has a maximum lifetime benefit of $36,500. It is funded by a .58 percent payroll tax, which amounts to $5.80 for every $1,000 of earnings. Several bills have been introduced to repeal or replace the law but did not advance. Requests have also been made to the governor by many legislators, including me, to terminate it. The program, however, proceeds forward.
The long-term care program is available to any state resident over the age of 18 who has paid the payroll tax premium for at least three of the last six years or for a total of 10 years with at least five years paid without interruption. The program has a maximum lifetime benefit of $36,500, and people qualify if they need assistance with certain daily activities: medication management, personal hygiene, eating, toileting, cognitive functioning, transfer assistance, body care, bathing, ambulation/mobility, and dressing. People may be granted an exemption if they purchased long-term care insurance through a private provider and applied by December 31, 2022.
Why I voted against the long-term care tax
While this new program is intended to help people and may benefit some, creating a government program to tax everyone’s paychecks for years and years – including younger workers struggling to repay student loans and save for a first home – seems heavy-handed and burdensome. This is especially true for a limited benefit that workers may never receive, either because they do not need long-term care or have moved away.
This Washington benefit is not “portable” across state lines. Many private long-term care insurance programs are portable. Workers who someday move to another state in our program are no longer eligible to receive benefits despite paying into the system throughout their working careers in Washington. Lastly, the cost of long-term care – sometimes over $10,000 per month – can far exceed the program’s maximum lifetime benefit of $36,500. This strongly suggests that the program will likely significantly underperform in its efforts to fund people’s long-term care needs. I voted against House Bill 1087 in 2019, but it passed the House (63-33) and Senate (26-22).
What to expect going forward
Payroll tax deductions are expected to begin on July 1. Some limited exemption opportunities still remain for people who live outside of Washington state but work in-state, are the spouse or domestic partners of active service members, hold non-immigrant work visas, and or are qualifying as disabled veterans.
Unless terminated by the state in a future legislative session, the payroll tax will remain in effect to generate revenues for the program. If the program remains in effect, I anticipate that it will need to be adjusted over time, which could mean that the benefits (but most likely the payroll taxes) will increase. While my position on this program is clear, we should acknowledge that long-term care is an important issue affecting many people and families.
Ensuring that our population has access to quality long-term care is very important. As many of you know from friends and relatives, long-term care service is very costly and can vary greatly depending on one’s needs. Private insurance providers have long offered a variety of options for people’s consideration. Forcing all workers to pay for the entirety of their working careers into a Washington plan that offers a very limited in-state only benefit has been and will continue to be the wrong approach.
–Brad Hawkins serves as State Senator for the 12th Legislative District.
Comments
The WA CARES program is a step in the right direction since it will satisfy your stated goal of “ensuring…access to quality long term care” for any WA resident who needs it. And it will ease the burden for family caregivers, many of whom are also juggling work and childcare. Having a “one-year” public plan will make the purchase of supplemental private insurance more affordable for those who want it. And provide relief to the state’s Medicaid budget. A better approach would be a federal universal catastrophic long term care plan – like every developed nation in the world has – except the US and the UK. That ‘s what our legislators should be supporting. It would be great for lawmakers to be in favor of solutions and not just voting against “less than perfect, but step in the right direction” solutions.