Opinion: Expensive marketing continues for state’s long-term-care fund, while the number of workers seeking exemption continues to rise

Elizabeth Hovde of the Washington Policy Center shines the light on the marketing of the long-term-care fund (payroll tax).

Elizabeth Hovde of the Washington Policy Center shines the light on the marketing of the long-term-care fund (payroll tax)

Elizabeth Hovde
Washington Policy Center

All the marketing in the world can’t make a coming payroll tax attached to an inadequate long-term-care fund attractive. Giving away more of your income — 58 cents per $100, for a benefit you aren’t guaranteed — is not appealing, especially if your budget is already tight. In this time of inflation, that will include a greater percentage of workers than usual. 

Elizabeth Hovde
Elizabeth Hovde

Even still, the state has sent out another request for proposal and will pay up to $1.6 million more trying to get people to like its WA Cares Fund. The RFP says the state seeks a “qualified contractor(s) to plan and implement a strategic marketing campaign, conduct qualitative and quantitative audience research, design marketing assets, buy ads, conduct proactive media relations, and support launch of program social media accounts.” 

Buying ads and setting up “proactive” media interviews to promote an unpopular, flawed, state-imposed social program is more than annoying, it’s deceptive. The state should be giving out accurate and thorough information concerning this fund so people can prepare for their decreased family budgets, something it has yet to do. Largely absent from state talk has been how low-income workers will be forced to hand over part of their paychecks to benefit state budget writers and wealthier individuals with this regressive tax, how many people won’t be eligible for fund benefits — even after paying in for many years, or how the fund has solvency concerns before it even begins.  

This fund the state’s legislative majority created will lower Medicaid bills for long-term care, but it won’t offer the “peace of mind” the state’s current marketing has been promising state workers. Even if you remain in the state after paying into this fund for 10 of your working years (which is required to receive a $ 36,500-lifetime benefit for most people), and even if the fund stays solvent (it’s not expected to in the long run), the benefit achieved won’t be enough to offer peace of mind. Anyone who has helped a family member with long-term care knows $36,500 is insufficient. Nursing-home care can cost more than $10,000 a month. In-home care is shown to exceed $6,500 a month. (See Genworth’s Cost of Care Survey for more.) 

Three-five months of service is not sufficient for most people’s long-term care. Taxing workers today for an inadequate benefit they might not ever receive and telling them they can have peace of mind about their possible long-term-care reality is dangerous. 

When Washingtonians look at this long-term-care mess deeper than the state’s polished marketing, they can see this. And a lot of us made a run from the WA Cares’ borders while we could. 

As of April 14, here are the number of exemption applications that have piled up from people who had or obtained their own private long-term-care insurance plans by Nov. 1. The number will only grow higher next year when new categories of people can apply to opt out of WA Cares, as legislation this year allowed:

  • Total exemption applications received: 477,455
  • Total applications processed: 477,382
  • Total number of applications approved: 473,752
  • Applications processed as a percentage of total: 99.98%
  • Approved applications as a percentage of total processed: 99.24

In January, legislation passed to allow near-retirees to earn partial benefits. Also allowed were “optional exemptions for workers who live out of state, military spouses, workers on non-immigrant visas, and veterans with a 70% or higher service-connected disability.” These groups can apply for exemption starting on  Jan. 1, 2023. Because of a recent legislative delay to this long-term-care law, workers stuck with the tax will start seeing decreases in paychecks in July of 2023, instead of this year — the original plan.

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.

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