(The Center Square) – WA Cares, Washington’s nascent long-term care program, the first in the nation, is insolvent, unfair, unnecessary, and should be abandoned according to a report from Washington Policy Center.
The program, enacted by the Legislature in 2019, creates a payroll tax of 0.58% to create a mandatory long-term-care plan for Washington taxpayers.Taxation will begin in July 2023 after lawmakers approved an 18-month delay in January.
Also approved in the recent legislative session were partial benefits for some near-retirees and additional exemptions from the program, including for workers who live out of state, military spouses, workers on non-immigrant visas and veterans with a service connected disability rating of 70% or more.
The WA Cares tax of 58 cents per $100 of income is mandatory for people who don't opt out with qualifying long-term care coverage and has no income cap. Even so, some believe the program is starting on unsound financial footing and will inevitably become insolvent.
“Put another way, in today’s dollars, the program is expected to require an additional $15 billion of revenue to cover the next 75 years of benefits and expenses,” State Actuary Matt Smith wrote, according to a KUOW report.
The only options, according to Elizabeth Hovde, WPC’s director of Centers for Health Care and Worker Rights, will be to either increase taxes or reduce benefits to program recipients.
“A review of the average monthly dollar amounts for quality long-term care shows that the state program is clearly inadequate to meet the needs of Washingtonians,” Hovde wrote in the report.
The WA Cares Fund will provide up to $36,500 per year for $36,500 to cover services like personal care, assisted living and adaptive equipment for participants who qualify. The median cost of assisted living in Washington is $76,000 per year according to a 2021 survey conducted by Genworth.
The WPC report also criticized the program as unfair because it requires mandatory contributions but has a high threshold for eligibility compared with market-based plans, meaning that some would contribute to the program but not be eligible to receive benefits.
“Instead of imposing new taxes and forcing participation in a socialized state program, state lawmakers should repeal the unpopular long-term-care law and adopt messaging that encourages people to prioritize planning for end-of-life needs,” Hovde concluded.
The Center Square requested comment from a representative for Gov. Inslee and two policy experts broadly favoring WA Cares but was unable to reach them by press time.
