Washington State Lawmakers Look At LTCi Program As Frustrations Mount

The bill that ultimately became the WA Cares program was an ambitious idea to tackle a problem many Washingtonians will face: it created a social-insurance program to help people pay for care for themselves in old age or sickness.

"If I could just for a moment say that how very proud I am that Washington will become the first state in the nation to provide long-term care insurance for every worker in the state," said Jinkins from the House floor the day it passed its final vote.

Starting in January, the program imposes a 0.58% payroll deduction on workers in Washington. For someone making $50,000 a year, that's $290 per year. Beginning in 2025, beneficiaries could start claiming up to $36,500 to help them pay for home care.

That could include, among other things, delivered meals and in-home care, transportation, assisted living and nursing home services, and respite for family members giving care.

The idea is to give people the resources they'll need for care and prevent people from spending themselves into poverty.

But the fledgling program is off to a rocky start.

The only way for working residents to not be included in the program is to take advantage of a one-time opt-out offered this year. To qualify, those people must apply with the Employment Security Department and have purchased a long-term private insurance plan by Monday. On Oct. 1, the first day for residents to apply, the opt-out website crashed.

By that point, private insurance companies were already pulling their long-term care policies over concerns that people would purchase them — and then perhaps quickly drop them — to avoid the payroll tax.

WA Cares has also encountered increasing resistance over who receives a benefit.

Critics — and even some supporters of the program — point to people who will pay into WA Cares but never earn a benefit, such as older people right now who won't have time to get vested under the current law's timeline.

Others point to workers who could pay in for decades and never receive a dime if they leave Washington to retire elsewhere. A similar problem exists for people who work in Washington but live in Oregon or Idaho, or military families rotating in and out of the region.

Meanwhile, scores of businesses, unions and groups — including Microsoft, Amazon, Alaska Airlines and more than 40 local of chambers of commerce — penned a letter in September asking Gov. Jay Inslee to delay the program.

In earlier proposed legislation for the program, Jinkins, who has since become speaker of the House, had two Republican co-sponsors.

In 2019, another Republican, Rep. Drew MacEwen, of Union, Mason County, co-sponsored the bill and spoke in favor of it early on before renouncing his support and ultimately voting against the policy.

Now, "I think the best thing the Legislature can do is ideally get rid of it, or delay it and do some serious fixes," said MacEwen.

In interviews, Democrats acknowledged the rollout has been troubled. But even as they examine changes to improve the policy, Democrats have vowed to move forward without delaying the start of the payroll tax.

A bipartisan commission is set next month to vote on recommendations for lawmakers to consider when they gather for the legislative session that begins in January.

Rep. Nicole Macri, D-Seattle — who along with MacEwen is a member of that group — said Democrats are focused on finding fixes like making sure adults who are older right now can get vested for benefits.

But, added Macri, "We will not see proposals from Democrats that would increase payroll deductions."

Problems and questions

As of Friday, nearly 280,000 residents have applied to opt-out of the program through the Employment Security Department (ESD). More than 93,000 of those applications have so far been approved, according to the agency.

State Sen. Mark Mullet, a moderate Democrat from Issaquah who voted against the program in 2019, said he's still waiting for his exemption to be approved.

He described the multistep process through ESD as: "Misery, it was like going to a dentist without Novocain."

For the 187,000 Washingtonians awaiting confirmation, a delay on processing applications could be problematic, said Mullet. That's because people authorized to opt-out must show the approved papers to their employer by Jan. 1 to be taken off the payroll tax.

"If you fail to present your ESD approval letter, employers will withhold non-refundable WA Cares premiums," according to ESD's website.

Meanwhile, the Long-Term Services and Supports Trust Commission is expected to vote on recommendations on Nov. 10 on recommended changes for lawmakers to consider, Macri said. The commission is composed of lawmakers, officials in government and labor, and other stakeholders.

One focus will be addressing older adults, to make sure they can get benefits when the program starts in 2025.

Right now, an individual must have been contributing to the WA Cares fund for at least 10 years at any point in their lives without a break of five years or more within those 10 years.

For older adults, who don't have many working years left, a fix in the program might allow them to qualify for benefits by paying in for few years.

So a fix might be aimed, for example, at somebody who "paid for eight total years and didn't vest," said Jinkins.

But, "I'm less inclined to say we should delay it, because I'm not sure what advantage that gives to delay it," she said.

'Either fix it or scrap it'

Conservative activists have begun collecting signatures for an initiative that, if it qualified, could deal a hefty blow to the program.

Proposed Initiative 1436, if approved by the Legislature, or later, by voters, would allow state residents to opt-out from the program at any time.

"We're working hard to get it qualified," said Cary Condotta, co-founder of the group Restore Washington. "We think this is the way to get in front of the Legislature and say, 'Hey, either fix it or scrap it.'"

"It's not that it's a horrible idea, it's just executed poorly," added Condotta, a former longtime Republican state lawmaker from Wenatchee.

As an initiative to the Legislature, advocates would have to gather about 325,000 valid signatures by Dec. 30. If it qualifies — by collecting enough signatures — the measure would go first to lawmakers, where they could approve I-1436, or deny it. If they deny it, the initiative would go to the 2022 ballot.

If legislators amended I-1436, both the amended and original version would go before voters in November 2022.

WA Cares has already taken one blow at the ballot box. Last November, Washington voters rejected a proposed constitutional amendment to allow the trust funds to be invested in stocks — a key move for making the program solvent for several generations.

Supporters of the program and that amendment pointed out that the vote came amid the economic uncertainty of the earlier half of the COVID-19 pandemic.

Jinkins said she isn't aware of any serious effort to stop or change the program.

In a regularly-scheduled news conference Thursday, Inslee said he wasn't concerned about the program's troubles being a liability for Democrats in next year's elections.

That is "because it's a good plan and it helps people get care, and we have a lot of people who don't have care," said Inslee. "And they don't want to live in poverty and they don't want to become wards of the state."

Backers of the program have already kicked into gear with messaging to explain WA Cares for voters and build support. Democratic state lawmakers have been holding virtual town halls to explain why the measure is needed.

A group, Washingtonians for A Responsible Future, has been sponsoring content explaining the new program and how it could help people. That group is funded partly by Service Employees International Union Local 775, which represents home health-care workers.

SEIU 775 funded most of the campaign last year on the constitutional amendment to invest long-term care trust moneys into stocks and bonds.

Adam Glickman, secretary-treasurer of SEIU 775, said the union — which also backed the original legislation — is open to changes, particularly around getting older Washingtonians benefits.

Labor, meanwhile, will fight to preserve the program.

"Whether it's in the legislature or at the ballot, it's safe to say SEIU will do everything to preserve this program and strengthen it for future generations," said Glickman. "We will wholeheartedly oppose any efforts to eliminate it."

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