By The Herald Editorial Board
It probably shouldn’t be surprising that a first-of-its-kind benefits program such as the WA Cares Fund — if not built while already flying — has needed some modifications while it taxied the runway and took off.
WA Cares charges workers in the state a payroll fee of 0.58 percent of gross pay, 58 cents for every $100 in your paycheck. In exchange, after 10 years of vesting, those enrolled are eligible for a life-time benefit of $36,500 — in effect, $100 a day for a year — a sum that will be adjusted for inflation over time.
Here’s why that $36,500 could come in handy down the road: About 7 in 10 Americans, 65 and older, will need long-term care services during their lives, according to a 2019 report by the U.S. Department of Health and Human Services. The median retirement savings for seniors is about $136,000, but those over the age of 65 can expect average costs of $260,000 over the course of their lives for care services, including short-term stays in care facilities, in-home care or home modifications.
Very few people carry insurance to provide that care, and Medicare doesn’t pay for most care services; and Medicaid only comes into effect after a person’s savings have been depleted to the poverty level.
While that $36,500 benefit won’t cover the entirety of the care needs of most people, it provides a basic level of support and can help families provide care for a longer period than they could have without it.
And Washington residents might have soon gone without it had voters last November not rejected an initiative that threatened to make participation voluntary, likely jeopardizing the Long Term Services and Supports program’s financial stability. Voters rejected Initiative 2124 with 55.5 percent recognizing the importance of keeping WA Cares sustainable.
Not that WA Cares hasn’t needed some changes since it was adopted by the Legislature in 2019 and began collecting the payroll tax as of July 1, 2023.
The state Legislature has previously made changes that allowed exemptions from the program for veterans, out-of-state residents who work in the state, military members and their families and others; making benefits portable if a participant moves out of state; and expanding coverage for those who are under the age of 18 and disabled.
That work has continued this legislative session with recommendations by the state’s Long-Term Services and Supports Trust Commission, a panel of lawmakers, state agency representatives and other stakeholders. Policy changes have been rolled into two pieces of legislation, both with bipartisan support and both of which have passed the Senate and now are being considered in the House:
Senate Bill 5291 would make it possible for workers in Washington to opt into the program after they opted out earlier; would allow, if someone stopped working for more than five years, to continue their 10-year vesting period where they left off, rather than starting over; and would offer a pathway for insurance companies to offer affordable policies — with consumer protections — to supplement the WA Cares benefit.
About a half-million workers in the state — out of about 3.6 million — opted out of the program after showing they had secured private long-term care insurance. Some of those who opted out, now that there’s more familiarity and certainty in the program, want the opportunity to step back in.
Changing the vesting period recognizes the needs of those — among them parents caring for children or those caring for senior adults — to continue in WA Cares without losing their place in the 10-year vesting period when they return to work.
As well, standards and requirements for supplemental insurance also are necessary and would encourage companies to offer the coverage and for state residents to consider it.
Meanwhile, Senate Joint Resolution 8201 would place a measure on the November ballot for a constitutional amendment that would allow the WA Cares trust fund to likely earn a higher rate of return on its investments.
Currently, the fund’s investments are restricted to government bonds and U.S. Treasury bills. Those investments are considered safer, but offer returns on investment of 2 percent to 4 percent. The constitutional amendment would place the fund’s investments with the state’s Investment Board, which has responsibility for state pension and other funds, and most recently posted a 8.5 percent fiscal-year return.
A state analysis concluded that WA Cares’ current investments are expected to return a 3.5 percent surplus over a 75-year projection, while a rate of 1 percent more would increase the actuarial balance to about 10.8 percent over the same period.
The resolution passed the Senate with more than a two-thirds majority, as is required of amendments to the state constitution, and would have to be passed by two-thirds of the House to be placed on the ballot, where a simple majority of voters is necessary for approval.
It’s worth noting that WA Cares has the attention of other states — among them California, Illinois, Minnesota and Massachusetts — that are looking for a sustainable solution to concerns for the long-term care needs of their residents.
At a time when inflation and other economic concerns have Washington residents counting every penny, the confidence that voters showed in the necessity of WA Care’s continuation should have lawmakers’ attention and their commitment to continued improvements to it to make WA Cares more equitable to workers and families, more accessible and more financially stable.
WA Cares is indeed in the air and gaining the altitude it needs to serve Washington’s families. Common sense changes can keep it flying.
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