Guest Opinion: State’s long-term care program needs more than short-term delay
When the Legislative Assembly convened the 2022 session last month, lawmakers made long-term care their top agenda. It’s probably not something you thought about much until recently, but the news that every state employee (except some who may have opted out – more on that in a moment) would start to pay a new tax on January 1. Warning.
Amid an outcry from employees and employers calling for an overhaul or repeal of the program, lawmakers quickly passed and Governor Inslee signed a bill that would delay implementation of the tax until July 2023, and another bill that would allow more people to opt out of the program.
It’s a good start, but it’s not enough. Lawmakers must fix all the flaws of the long-term care fund, known as WA Cares, rather than just delaying the start of the payroll tax and allowing a few more groups of people to opt out .
The Legislature established the Long-Term Services and Supports Trust in 2019 to address a real problem: Not enough people have long-term care insurance. When they end up needing care, the state too often has to pay for the services out of the general fund.
The original intent of the legislation was to allow employees to opt out of the state program when they purchased their own long-term care insurance from other places, including the private sector. The state program would provide support for a short time until people become eligible for other programs such as Medicaid, and it would stimulate the private long-term care insurance market.
But changes to the legislation since its passage — including a bill lawmakers passed in 2021 — have created a program that’s unclear, insolvent, and doesn’t meet the real care needs of Washingtonians. long term.
The payroll tax to fund the new program is 0.58% of salary, or about $435 a year for someone earning $75,000, with no cap. That’s a lot of money coming out of people’s paychecks, especially if some of them will never get any benefit from it.
Among those who were forced to contribute to the program without seeing a future benefit were workers nearing retirement who could not vest, and employees who work their entire careers in Washington and then retire in another state. .
One of the bills the legislature addressed at the start of the session partially solves the problem by allowing a few more classes of people to opt out, but there are many more problems that need to be solved, including the basic financial backing on which it now rests. Last year, more than 450,000 people withdrew during a brief period when they were allowed out, meaning fewer people are contributing to the scheme. There are also systemic issues regarding labor and the definition of long-term care, as well as insurance regulatory issues that affect the health of a private sector insurance market.
Lawmakers are right to pause the long-term care program this year. But it’s essential that they use the extra time to work with private sector employers, regulators and insurers to find real solutions to the real problems surrounding long-term care.
With an aging population, it is clear that the way we plan for long-term care is something that is not going away. Simply putting it off for 18 months is not a solution.
Kris Johnson is president of the Washington Business Association, the state chamber of commerce and manufacturers association.