One Year After New Payroll Tax Collection, WPC Releases Study Showing WA Cares Program Fails on Multiple Fronts » Publications » Washington Policy Center
Today, WPC released Health Care Center Director Elizabeth Hovde’s new in-depth study of the state’s long-term care program, WA Cares. It reveals a program that goes against the inspiration of its existence – the need for people to prepare for long-term care needs – with marketing that assures people that the new program will give financial freedom so that he won’t. Ironically, the state’s new program encourages people to ignore preparing for possible long-term care needs despite a benefit that is not only already grossly inadequate for long-term care, but will have to be reduced (or the payroll tax, which will have to be raised), in order for the program to remain solvent.
The study also shows that the cost savings to the state are small (and questionable) compared to what Washington workers will pay in taxes.
I’ve posted some takeaways I had from the study below. I invite you to review them and consider reading the full Policy Brief. Don’t keep the information to yourself! Share the points that strike you with everyone you know!
Key points to remember:
- The WA Cares program is insolvent before it begins, facing a $15 billion shortfall.
- Between 2022 and 2053, workers will pay more than $30 billion for the state to realize net savings of just over $1.2 billion, assuming administrative costs do not increase.
- The regressive tax provided by law means that some low-income workers will be forced to give up part of their income for the benefit of others with higher incomes.
- It is likely that the Department of Job Security will grant a monopoly to Service Employees International Union 775 (among the state’s largest campaign donors) to provide the required training to family caregivers who may be forced to pay them contributions.
- The $36,500 lifetime benefit is highly unlikely to meet the needs of most people, making the state’s promises of financial security and “peace of mind” both false and dangerous.
- There are already legislative discussions that the 58-cent tax will have to increase or the benefit amount of $36,500 decrease to maintain the viability of the program.
- At his starting tax rate (which is already expected to increase), a worker earning $25,000 will pay $145 each year, a worker earning $50,000 will pay $290, those earning $100,000 will pay $580, and so on.
- Private long-term care plans typically start paying when a senior needs help with two activities of daily living, while the state plan will require a person to need help with at least three.
READ THE FULL POLICY HERE