Opinion: WA Cares harms low-income workers today for a maybe-benefit tomorrow

Elizabeth New (Hovde) of the Washington Policy Center critiques WA Cares, arguing it harms low-income workers today for an uncertain future benefit.

Elizabeth New (Hovde) of the Washington Policy Center believes solvency is not WA Cares’ main problem

Elizabeth New (Hovde)
Washington Policy Center

What do you do when it looks like an initiative might pass that allows workers a choice about paying wages into a program that they might never benefit from? If you work for the state agency promoting the program, it appears you focus on aspects of the misguided program that legislators tried to fix and ignore all the problem areas that remain.

You also say people concerned with the program are misinforming voters. All the while, you remind voters that a lack of appropriate personal savings justifies the need for another tax — another tax that allows individuals to save even less and that can be spent on only one of life’s many needs.

WA Cares is the program center stage, and Initiative 2124 is the ballot measure in question. Since WA Cares won’t benefit all workers paying into the program, a “yes” for I-2124 is attractive. WA Cares also takes money from low-income workers for workers with higher incomes. That makes the initiative even more attractive to many.

Ben Veghte, the director of WA Cares, is trying to get people on board with WA Cares before the election and despite its many shortcomings. He was in Vancouver Monday at the Area Agency on Aging and Disabilities of Southwest Washington.

The Columbian reported Veghte said workers need WA Cares, the new long-term-care program funded by a payroll tax on Washington state’s W2 workers. The payroll tax takes 58 cents of every $100 a worker earns. The tax rate could increase, as has the tax rate for another state-run program called Paid Family and Medical Leave (PFML). The payroll tax for that mandatory program doubled in its short lifetime. It also received a general fund bailout. (See how much you’re taxed for WA Cares and PFML here.)

These programs are not safety nets. PFML often benefits people who are not in need at the expense of workers who are in need. WA Cares will do the same, and taxpayers already provide a safety net to people in financial need of long-term care, should they need assistance with the activities of daily life.

The WA Cares’ director said a commission overseeing the new tax that brought in $1.3 billion from workers in its first year will continue to monitor and improve the program. It’s true that the Long-Term Services and Supports Trust Commission has been monitoring WA Cares and its income. It’s also true that commission members have talked about ways to keep the fund solvent with possible tax-rate increases and stricter eligibility.

Those sins of omission help fuel the contention that WA Cares does not have solvency concerns. Veghte said, “There has been misinformation from some people in the media saying we have solvency challenges — we don’t. We are solvent over a 75-year time frame and we worked really hard on that.”

There’s more to that story. Shortly after WA Cares’ creation, the state actuary said it had a $15 billion shortfall. The latest actuarial report about the program’s ability to pay its way said WA Cares was safe in its current form under some scenarios but not others. Read the full report here.

Solvency is not WA Cares’ main problem. The program might end up paying its way. Like PFML, it might not.

The bigger fish frying is that workers are getting false promises. They are told to rely on WA Cares when they can’t. To receive a benefit, a person not only has to need long-term care, he or she has to pay into WA Cares for 10 years without a break of five or more years. The lifetime benefit of $36,500 also is not typically enough to cover a person’s long-term-care costs, should they have them. See cost of care numbers from Genworth. And, again, the fund takes money from workers, including low-income workers, with a plan to give their money to other workers, regardless of income.

* Read more about WA Cares and Initiative 2124 in a policy paper here.

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.

Elizabeth New (Hovde) of the Washington Policy Center believes solvency is not WA Cares’ main problem

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