Initiative 2124 will ask voters if they want to make long-term care insurance optional, a move that could doom WA Cares Fund | Local News | Spokane | The Pacific Northwest Inlander

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ANDabout 70% of Washington residents According to research from the U.S. Department of Health and Human Services, most people will need long-term care at some point in their lives.

Long-term care may not involve a nursing home. It may involve helping with transportation and grocery deliveries for a middle-aged person recovering from an injury. It may involve home improvements to keep someone safe while they battle an illness. It may be a part-time caregiver who helps make sure someone showers and administers medication on time.

However, most state residents do not plan for the costs of long-term care.

“There’s a misconception that Medicare covers long-term care, but it only covers short-term stays in nursing facilities. Most long-term care is typically provided in patients’ homes with family caregivers,” says Lynn Kimball, executive director of Aging and Long Term Care of Eastern Washington (ALTCEW).

“The second largest public program is Medicaid. Medicaid will cover long-term care in the home, assisted living, adult family homes and nursing facilities, but it requires people to spend a portion of their income and assets to qualify,” Kimball explained.

Washington state lawmakers created another payment option called the WA Cares Fund in 2019. Through a payroll tax that went into effect in July 2023, workers in the state are required to pay 58 cents of every $100 they earn into the fund.

After 10 years of contributions, state residents of any age can access total benefits of up to $36,500 (an amount that is likely to increase over time with inflation) if they need long-term care. According to ALTCEW, that amount would currently be enough to pay for a part-time caregiver for one to two years, or cover the cost of a wheelchair and some modest home improvements.

The WA Cares fund is unpopular with many residents. In November 2019, about 63% of voters who voted for the advisory measure told state lawmakers to repeal the law that created the fund. The program’s original start date was then delayed for 18 months, during which workers had the opportunity to opt out. Nearly half a million Washingtonians chose not to participate.

In late 2023, the grassroots action group Let’s Go Washington (funded by hedge fund manager and part-time farmer Brian Heywood) collected more than 400,000 signatures to place an initiative on the upcoming November 5 ballot to change the rules of the WA Cares Fund.

Initiative 2124 will ask voters whether the WA Cares Fund should be made an optional, opt-out program, giving employees the ability to opt out at any time.

Ssupporters of the initiative, including Republican state Reps. Mary Dye of Pomeroy, Leonard Christian and Suzanne Schmidt of Spokane Valley, Mike Volz and Jenny Graham of Spokane, and Joe Schmick of Colfax, say the tax puts too much of a financial burden on someone living paycheck to paycheck.

Currently, a person earning $50,000 a year contributes about $24 a month to the fund, or $290 a year.

Critics of the WA Cares Fund also say the current lifetime maximum benefit of $36,500 per person is inadequate. According to AARP, the average annual cost of home care in 2021 was $42,000. In addition, the benefits are not portable, meaning people who work in Washington but live in another state or move to another state will not be able to use them.

Organizations opposed to I-2124, such as AARP and the Washington State Nurses Association, argue that making contributions voluntary would effectively eliminate the program.

According to an actuarial valuation carried out by Milliman, an independent risk management firm, a large number of contributors are necessary to keep the WA Cares Fund solvent and contributions low.

The more people who cancel, the higher the cost of participation will be, which will encourage even more people to cancel, Kimball says.

If the WA Cares Fund were eliminated, the only option would be private long-term care insurance, which fewer than 10% of adults can afford, according to the Washington Association of Area Agencies on Aging.

People who buy private long-term care insurance are typically between the ages of 50 and 79. A 65-year-old single man pays an average of $1,700 a year for $165,000 in benefits, while a 65-year-old single woman pays an average of $2,700, according to the American Association for Long-Term Care Insurance.

For those unable to pay for insurance or professional care, long-term caregiving often falls to friends or family members who bear the financial burden in other ways. Caregiving often falls to women, many of whom give up work to care for aging family members, says Ai-jen Poo, executive director of Caring Across Generations.

AARP Washington reports that there were nearly 820,000 unpaid caregivers in Washington in 2021. They worked nearly 770 million hours for free, worth $16.8 billion.

Cynthia Stewart of the League of Women Voters of Washington fears that eliminating the WA Cares Fund will not only reduce the number of women in the workforce and widen the gender gap, but will also “hurt the majority of voters” who, even if they are among the 30% who never need long-term care, will likely end up shouldering the burden for someone else. ♦