Opinion: WA Cares’ benefit isn’t keeping up with the cost of care

Elizabeth New believes it’s becoming painfully clear that the lifetime benefit attached to the state’s mandatory long-term-care program will not be adequate even for Washingtonians who someday qualify for WA Cares' dollars.

Instead of a payroll tax that harms workers, lawmakers should increase people’s awareness about long-term care and enact reforms that create a healthy, price-competitive insurance market

Elizabeth New (Hovde)
Washington Policy Center

It’s becoming painfully clear that the lifetime benefit attached to the state’s mandatory long-term-care program will not be adequate even for Washingtonians who someday qualify for WA Cares’ dollars.

New data from the Bureau of Labor Statistics show the cost of home care rose 14.2% in the last year alone. Industry leader Genworth Financial found increases between 1% and 10% across various long-term care (LTC) facility types in its most recent Cost of Care Survey, continuing an upward trend seen the past several years. “The most substantial cost increases occurred in home health aide and homemaker services costs,” a March 12 press release said.

The company estimates that on the low end for LTC services, a part-time (20-hour-per-week) home health aide in Washington state this year will cost $42,848. A private room in a nursing home could run $169,178. Meanwhile, WA Cares’ website says its benefit of $36,500 “could cover around 20 hours per week of home care for about a year.”

It’s time for the state to update its website, even if it doesn’t update the inadequate benefit amount it promises workers who might one day qualify for WA Cares. Not doing so allows for more false hope.

The state has already been erroneously messaging that people can have “peace of mind” about long-term care because WA Cares exists. They can’t. Many workers won’t qualify for WA Cares, no matter how much money they pay into WA Cares during their working years or even their need for LTC.

Benefit stagnates

While LTC costs have kept growing since lawmakers passed the law that created WA Cares in 2019, what has the lifetime benefit for WA Cares been doing? Staying the same.

Stephen Forman, senior vice president of Long Term Care Associates, says of the situation, “To keep up with the cost of living, the $36,500 benefit passed in 2019 should have already grown to $44,800. As it is, WA Cares is not expected to hold debate on its first cost-of-living adjustment for another three years — July of 2027. By then, WA Cares will have easily fallen $10,000 behind the cost of care, which beneficiaries will have to make up out of their own pockets.”

Even when the benefit is allowed to increase and come closer to paying for actual costs associated with long-term care, it might not rise with inflation. While the state says “the benefit amount will be adjusted annually up to the rate of inflation,” the key words to pay attention to are “up to.”

In a December meeting of the WA Cares oversight and advisory group, the Long-Term Services and Supports Commission (LTSS), Sen. Curtis King, R-Yakima, asked if the $36,500 benefit will rise with inflation automatically or be subject to approval of some kind. Approval is needed.

Commission members were told the state’s Office of Financial Management will have a benefits council making decisions based on actuarial modeling about “how far up” the benefit can go. Also, the amount is capped at the rate of inflation. It is not required to go up to it. Another senator in the meeting then expressed concern that LTSS members wouldn’t have a say about an increase. He worried the amount might rise too high to keep the fund solvent. (Solvency of WA Cares has been a concern.)

With the cost of care expected to continue climbing, WA Cares is becoming an even worse bet for workers forced to pay 58 cents of every $100 they earn to the state for a benefit they might never receive.

Without WA Cares, some workers could save or invest money in better ways to help with potential long-term care. Lower-income workers could use the money for life needs they have today, instead of a possible life need in the future. Sometimes, these workers will be financing LTC for workers with higher incomes and more resources. Ouch.

The state should repeal its LTC law as soon as possible. It should have done away with WA Cares before voters have an opportunity to make WA Cares optional in November with Initiative 2124.

Instead of a payroll tax that harms workers, lawmakers should increase people’s awareness about long-term care and enact reforms that create a healthy, price-competitive insurance market. Most of all, lawmakers should protect Medicaid. That’s a safety net taxpayers already provide people in need of help with LTC financing.

Elizabeth New (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.