The Journal’s View: WA Cares Act should be repealed or revamped
Staff ReportFebruary 2nd, 2023
Washington state legislators should make a priority of repealing the WA Cares Act during the current Legislative session.
Short of abolishment, legislators should put the long-term care program on a statewide ballot and let voters determine its fate.
If the program’s staunchest supporters won’t take either of those reasonable actions, they should fix the flaws that persist before the state starts charging taxpayers to support the flawed program later this year.
Separate bills are in play for two such options. House Bill 1011 would repeal the WA Cares Act. Senate Bill 5479 would delay its implementation until July 1, 2024, and put the program on a referendum for a statewide vote. Both ideas have merit, though observers are dubious about whether the Legislature will give either idea a serious look.
Without legislative action, WA Cares goes into effect July 1, and the Washington state Employment Security Department will begin collecting an initial premium, via payroll tax, of 0.58% on wages. Eventually, people who have put money into the program for 10 years or more will be eligible for a maximum benefit of $36,500 upon needing long-term care, while anybody born before 1968 can get a partial benefit for fewer than 10 years worked.
Even if one sets aside the fact that the benefit is woefully inadequate to meet most people’s long-term care needs late in life, the program has plenty of other flaws that are cause for concern.
WA Cares had a one-time opt-out period from Oct. 1, 2021, to Dec. 31, 2022. During that time, people could become exempt from paying into the state program if they could prove they had private long-term care insurance in effect by Nov. 1, 2021. As the act is written, that opt-out option no longer is available. People who have private long-term care insurance policies still will have to pay into a system for benefits they are unlikely to use.
Rolling opt-in, opt-out periods would be more fair for people who want to pursue more robust benefits in the private-insurance market, as well as to those who move to Washington and have benefits in place already. The workforce is as transient as ever, and WA Cares needs to be adaptive to that reality.
Also, the program still doesn’t address the flaw in which people who work in Washington but live in another state pay for a benefit they’ll never receive, unless they ask for a special exemption. That issue is especially problematic in border communities like Spokane, where a portion of the workforce lives in Kootenai County and commutes across the state line daily.
Similarly, people who work in Washington, pay into the system throughout their careers, and retire out of state wouldn’t have access to the benefit they accrued.
None of those inadequacies broach the elephant in the room, which is the debate over whether the program would be sustainable at its current rate. One actuarial study cited by the state shows that the program would be solvent through 2098, but critics say that study fails to factor in the decrease in revenue from people who have received lifetime opt-outs. That leaves open the strong possibility that the payroll tax will need to be increased in the near future, and some of that burden likely will have to be shouldered by employers.
Like the rest of the U.S., Washington state has a real issue with long-term care, but systemic problems need to be addressed, such as bolstering the workforce in that industry. WA Cares doesn’t address systemic problems—and might create a new set of burdens on top of the issues that already persist.
The poorly thought-out program hasn’t been refined to the degree it should be before being launched. Legislators should recognize that and take action now.