Opinion: Is 355 a typo? Number of people opting into WA Cares far lower than estimated

Elizabeth Hovde believes Instead of imposing this program on workers, lawmakers should help make insurance products more affordable and protect taxpayer-funded safety nets that already exist to help people in need

Elizabeth Hovde
Washington Policy Center

Interesting things happened at the Sept. 19 meeting of the state commission making recommendations to the Legislature about what to do with WA Cares, the state’s new long-term-care program that comes with a payroll tax of 58 cents for every $100 workers make.

Tweaks continue to be discussed, since WA Cares solvency walks a fine line of “maybe,” groups eligible for exemption keep seeking a way out of the required payroll tax that’s tied to a someday-benefit they aren’t likely to ever see and as Washingtonians demand portability of a benefit they’re told they can count on someday even though they can’t if x, y or z.

The long-term-care (LTC) mess lawmakers imposed on Washington workers in 2019 is a penalty that will keep on giving, unless lawmakers see fit to repeal the first-in-the-nation, long-term-care law. (It’s first in the nation for a reason.)

One of the interesting things was the Employment Security Department (ESD) explaining that 24,495 non-immigrant visa holders who are eligible for exemption had sought to get out of the payroll tax, while a low number of self-employed workers (355) were voluntarily choosing to opt into the program.

After I included that bit of information in an article I wrote covering the meeting, a long-term-care industry source wrote me and asked if “355” was a typo. “We knew this would be a disaster,” he said, “but this would be legendary.”

Create a program that people will only maybe benefit from and assign a burdensome tax to that lack of a guarantee, and watch legends be made.

According to a report and analysis from actuarial research firm Milliman, the state’s hired consultant, there were 362,000 self-employed individuals in Washington state as of 2020 (about 10 percent of Washington’s civilian employed population at the time). An ESD state fiscal note that estimates the time and personnel required to accommodate the number of opt-in applications coming from self-employed workers in the program’s first year says this: “Using the low end of the actuary models performed this summer, we are using 40,000 applications as our estimate for the first year.”

We have a long way to go before we’ll get to 40,000 in WA Cares’ first year if right now we’re in the 300s. I asked ESD if the agency was concerned about the low number of opt-ins, given the size of the self-employed worker population and the estimates. I was told the department was “only positioned to speak to the number of elective coverage applications we’ve received.”

ESD reported the following updated exemption numbers for eligible groups, as well as the number of opt-in applications from self-employed workers, as of Sept. 27.

Wanting to opt out:

Non-immigrant visa holders: 28,523
Washington workers who live out of state: 19,191
Veterans with with a 70% service-connected disability rating or higher: 3,554
Active-duty mlitary spouses: 1,378

Wanting to opt in:

Self-employed workers: 386

These numbers add to the nearly half a million people who opted out of WA Cares when an option to purchase private insurance existed. Workers who must keep paying into WA Cares throughout their careers — instead of saving for or investing in many individual life needs they’ll have — need to continue hoping for repeal. That’s an option lawmakers should be clamoring for now that they have seen how broken WA Cares is, how many people won’t receive a long-term-care benefit and how this extra bill from the state is hurting low-income workers.

Instead of imposing this program on workers, lawmakers should help make insurance products more affordable and protect taxpayer-funded safety nets that already exist to help people in need.

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