Hopeful messages on long-term-care fall short; exemptions continue

Administrators of Washington state’s long-term-care law are hitting news outlets and providing health care writers with messages of hope about a social program they say will provide “peace of mind,” even though it does nothing of the sort.

The government website selling the WA Cares program says, “By contributing a small amount from each paycheck while we’re working, we can all pay for long-term care when we need it.” But that’s far from the case. Washingtonians who move out of state after retirement and have long-term-care needs won’t benefit from the program, regardless of how much of their money has gone toward the WA Cares Fund. Neither will workers who didn’t pay into the fund 10 or more years without a five-year break. Failing to need enough assisted care — help with three or more activities of daily living — also rules you out.

A payroll tax of 58 cents for every $100 a worker makes begins in July of 2023 to fund the program.

If the WA Cares Fund stays solvent (it’s not expected to) and you do meet all the qualifications required to reap up to $36,500 in benefits that a new payroll tax is supposed to provide, the money won’t last long. Nursing-home care can cost more than $10,000 a month in our state. In-home care is shown to exceed $6,500 a month. (See Genworth’s Cost of Care Survey for more.)

What was that about WA Cares offering peace of mind?

If people haven’t planned for this potential life need and lack resources, they’re still likely to seek out a taxpayer-provided safety net that exists in Medicaid. We could be overloading that safety net even more by telling people that the WA Cares Fund will be there to take care of them.

Even the plan’s primary spokesman and director, the Department of Social and Health Services’ Ben Veghte, admits in a recent article, “It doesn’t solve all the problems, but with a modest premium and a modest benefit it eases the problem for families,” Veghte said. “Maybe they can develop a plan” for long-term care needs after their benefits expire, he added.

So workers, with low and high incomes, many in need of their current income to meet individual or family budgets, will pay 58 cents of every $100 earned — and they’ll still need a plan. That doesn’t feel like peace of mind. It feels like a poor investment. No wonder many Washingtonians would rather use their earnings in ways they see fit to meet a list of possible life needs. (Long-term care won’t be the only one.)

I’ve seen recent stories and opinion pieces (The Seattle Times, The Spokesman Review and The Oregonian) promoting WA Cares with the theme that it will monetarily help caregivers of people with long-term-care needs (often family members). But having created a jobs program of sorts doesn’t make taking 58 cents of every $100 a worker earns any more likable or promising. It makes me question some of the motives behind the social program.

Lawmakers should repeal this law and its harmful, regressive payroll tax. We have a safety net for people in need, and we need to strengthen that safety net by reducing its abuse. Cutting taxes and regulations that make private long-term-care insurance more expensive is also something the state can do. But workers should be allowed to keep more of the money they earn so they can invest in or save for possible long-term care in ways that offer them more peace of mind than can this inadequate social program.

While state marketing persists to make the WA Cares Fund look like a good deal, exemption applications that were available to people with long-term-care plans of their own continue to trickle in. I expect the numbers to rise mildly each month until the end of the year and then get a big boost in January 2023 when new exemption categories are allowed to apply for exemption and keep more of their income.

– Elizabeth Hovde is a policy analyst and director of the Centers for Health Care and Worker Rights at the Washington Policy Center. She is a Clark County resident.