Making WA’s long-term care program optional will create costs for state

(Courtesy of Pixabay)

If voters pass Initiative 2124 to make Washington’s long-term care benefit voluntary, it could cost the state millions of dollars to deal with a large-scale exodus of people from the program.

How many millions depends on how many workers abandon WA Cares and how quickly they go, according to a fiscal impact statement that will appear in the voter’s guide for the Nov. 5 election.

Estimates range from $12,623,250 to $31,215,960 in the course of the first three state fiscal years following passage, according to the analysis prepared by the Office of Financial Management. Those costs, mostly for adding staff at two state agencies to handle increased workload, would be covered from the program’s coffers

Most workers in Washington are now required to participate in the program, supporting it with a tax on their wages. The statement draws no conclusions on the financial viability of WA Cares, or whether it will survive if a large share of residents drop out.

WA Cares applies a 0.58% tax on Washington workers’ paychecks. Beginning in July 2026, those who qualify can access a $36,500 lifetime benefit, adjusted over time for inflation, to use on expenses like caretaking, equipment or meals.

The tax went into effect last year. Premiums collected are deposited in a state account to cover benefit payments and administrative costs. Workers who opt out will stop paying the tax and will not receive benefits. They do not get back the money they’ve paid in.

Opponents say too many people are required to pay the tax who may never use the full benefit or even qualify for it.

Last year, Let’s Go Washington, a conservative political committee, led the signature-gathering drive to get Initiative 2124, along with measures to scrap the state cap-and-trade program and to repeal the state’s capital gains tax, on the ballot.

OFM will prepare a statement of fiscal impacts for each measure, and this is the first of those to be released.

Gearing up

The Employment Security Department faces a stiff challenge if the measure passes.

There’s a short timeline. The election is Nov. 5 and the provisions would take effect Dec. 5. Initiative backers think there are throngs of people who will immediately ditch WA Cares.

There are 4.1 million workers in the state with 3.9 million paying into the program, according to the analysis. Because it is not known what will occur, the analysis identified a range of costs for each fiscal year based on 25%, 50% and 75% of workers opting out.

The Employment Security Department will incur the largest hit, with costs that include technology upgrades and hiring communications staff to develop informational materials to let employers and employees know about the changes. There also will be a need for more staff to field phone calls from workers.

The report estimates in the first fiscal year, which runs through June 30, 2025, the range of expenses for the department is $1.9 million to $6.7 million. That only covers about seven months. The potential sums are higher in each of the next two fiscal years.

The Department of Social and Health Services, which fields questions and complaints about WA Cares, will need more staff too. OFM estimates that if 10% of workers who opt out call the agency and are on the phone for at least five minutes, the costs will range from $577,000 to $1,409,000 in the first fiscal year.

At its May 1 meeting, members of the Long-Term Services and Supports Trust Commission peppered Employment Security Department Commissioner Cami Feek with questions on what workers can expect if the measure passed.

She had few specific answers at that time but stressed that they were prepping to assure a “positive customer experience” for those wanting to exit.

“We have to be prepared … for a wave of exemptions in a very narrow window,” she said.

Can WA Cares survive?

Supporters of WA Cares fear the program cannot survive if it is completely voluntary. A study released earlier this year concluded that those with anticipated long-term care needs will be more likely to participate, but other workers, especially those earning higher wages, will likely opt out.

In this scenario, the program would become more expensive for everyone left in it – a smaller pool of participants with the greatest needs. Raising the premium to cover promised benefits would likely only drive away more people, worsening the decline, according to the analysis.

“If the cycle repeats without intervention, the program could become financially unstable and unsustainable with an inability to collect premiums that are high enough per person to cover benefits,” State Actuary Matthew Smith told the Long-Term Services and Supports Trust Commission in May.

In its report, OFM assumed a decrease in state revenues as workers opt out and their paycheck deductions into the program stop.

It says revenue is now projected to reach $952 million this fiscal year. When added with previous collections, it would be enough to cover benefit payments beginning July 1, 2026.

That could change if the initiative passes and there is a wave of departures, per the report.

If 25% less in premiums were collected, revenue would be $714 million in this fiscal year, according to the report. If there’s a 75% decline, revenue would be $238 million.

“Any impacts this initiative may have on future benefit payouts or associated administrative expenses are indeterminate at this time since the demographic makeup of those who would choose to remain in the program is unknown,” reads the report.

by Jerry Cornfield, Washington State Standard

Washington State Standard is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Washington State Standard maintains editorial independence. Contact Editor Bill Lucia for questions: info@washingtonstatestandard.com. Follow Washington State Standard on Facebook and X.

  1. I would rather have the money in my pocket plus I feel there are to many different government programs this is one nobody is going to miss. Government is to big it has its fingers in to many things we need small government that focuses on the basics.

    1. My recommendation to anyone who is deciding whether it’s worthwhile contributing to this type of program is to volunteer in a facility that currently provides this type of care and explore the extremely high costs associated with it.

  2. “Beginning in July 2026, those who qualify can access a $36,500 lifetime benefit, adjusted over time for inflation, to use on expenses like caretaking, equipment or meals.” Medicaid covers durable medical equipment. This is a one-time lifetime benefit. Most that the article calls Higher wage earners do not qualify for any of the many state programs. Most who do qualify already without this tax on pay checks don’t need a duplicate. Most have access to food, utility reduction charges durable medical goods. All people look forward to the cost of getting old. 36,000. Is nothing in the big scheme of things. Most in the Middle class (who also don’t qualify for much at all) will be able to afford a wheelchair. I do not support this tax it sounds to me like just another tax grab that funds? More gov jobs at a tune of “The report estimates in the first fiscal year, which runs through June 30, 2025, the range of expenses for the department is $1.9 million to $6.7 million. That only covers about seven months. The potential sums are higher in each of the next two fiscal years. The Employment Security Department will incur the largest hit, with costs that include technology upgrades and hiring communications staff to develop informational materials to let employers and employees know ” Voluntary or nothing. Cont.

  3. cont. I wanted to add that Medicare Part B will pay for any age for all sorts of DME…If one doesn’t qualify for Medicare or can’t afford the % deductible they would likely qualify for Medicaid. I wanted to add this because it is important for all to have access to DME.
    How does it work if a person has a disability issue and works and receives a paycheck and SSI or ? Are they required to pay this amount too? I am curious about the question there at the end?
    I feel it would be nice for our state to stop taxing everyone and therefore leave a little for them to donate as they choose. I certainly support anyone being able to have what they need as far as DME or food, clothing etc. I just think this one is a double dipper and it is actually the just below pov level and maybe even some of pov level who will suffer with this new idea for revenue for this state. It is probably all of these little ideas that became realities that are fueling all of the initiatives now. I hope this doesn’t offend anyone as it is not meant to at all. I did work for a Medical supply and I did the RX from Docs and I know.

  4. Our state has itself in a pickle. By passing or trying to pass so many things that just are not necessary and are more political in nature where is the money for housing it’s not there that’s where. What there was well a lot of it was wasted. We need housing. How about anyone who needs a wheelchair gets a ramp for their homes if they are lucky enough to have one? To me this would include all SSDI, Medicaid and Medicare part D recipients I think trying to be so giving and political in voting has actually hurt the most underserved. I assume cities take on the cost for sidewalk ramps and access to gov buildings? Maybe if we didn’t spend as a state so much on silly town and small cities could get state help for that too. It would hurry up the process? I think so. Most people with diagnosed physical or mental disability issues are covered with a Drs RX. Most Drs will give this report and Rx faxed directly to a medical supply store. I know ha. So unless it is someone who isn’t really physically or mentally disabled it shouldn’t be a problem. I suspect most who do try to seek these programs and services are truly legitimate.

  5. Our state needs. More manufacturing plants and jobs. It needs an expansion on the requirements of density to all of the state every town every size. This spreads out the people and allows them to work and to have a home and then get on with it. What it doesn’t need is more GOV jobs. The Gov jobs we have now some can me put to use in another segment of needs like mental health facilities with dorm housing for workers out from the cities. It need TX centers for actually try to help and cure addiction. Same criteria Dorm housing paid college for all who work in these facilities from Drs Nurses, Psychologists, NAs, LAB.At the end of a 5 year contract they may move on into private practice with no college debt at all. They would be paid a small salary while working in these facilities as well as the dorm free living and food. Just like in college. At least where I went and lived in the Dorm. I knew 2 Drs who did this in the early 1980’s in St Louis. We need housing for everyone but if we spread it out it opens up. Everyone shouldn’t need to live in a city where they will never have total independence or peace of mind.

  6. The coverage offered by this plan is basically a joke. My mother passed in 2022, and after she came home from the hospital, I paid $25 an hour for 24 X 7 care. In her case, she had resources and wanted to remain in her own home. But if she went into a care facility, this amount would only cover about 3 months. For around-the-clock care she got, this would only cover about 2 months. This policy might make some people feel that they have coverage, when in reality it is extremely limited. It should end.

  7. This long term care legislation was a terrible idea from the start. From the initial large number of citizens who opted out when they could the legislature was given a very clear message that a large majority of citizens were not in favor of this additional payroll tax. The problem is the legislature didn’t listen, they should have repealed the bill and ended their failed experiment. To quote famous song, “know when to fold ’em”. Since they didn’t the citizens need to do it for them and support initiative 2124.

  8. Agree with James and Jeff, this program provides basically no meaningful benefits to the claimant. $100 a day barely covers food and the benefit is only for 1 year. To qualify the claimant must lose 3 of 10 Activities of Daily Living, not 2 of 6 which is on all LTC policies issued by insurers. This is purely a selfish tax grab by greedy politicians. Again the voters of our state will weigh in and decide.

  9. This is a ridiculous program that no one wanted and few will benefit from. This program as stated offers an insignificant benefit and the expense to manage over time will balloon out of control. It’s better that the Employment Security Department feel the pain now because if it remains in place the voters will definitely feel the pain later. It’ll be broke within 10 years and they will be back at the trough begging for more. Over time politicians will increase payouts to buy votes and the program will become the Mini-me of social security. This is truly a stupid idea. If there is only one initiative you are able to support it should be this one.

    That being said – you should vote YES for ALL of INITIATIVES. It would be like a breath of fresh air for Washington State.

  10. Medicaid is a huge expense for states. it’s out tax dollars at work. Washington is trying to figure a way to cover the cost. The plan has problems but it’s a start, one way or another we have to pay for our care.
    The ways to avoid spending down to qualify for Medicaid is either an irrevocable trust set up by an elder-law attorney 5 years before applying for Medicaid, gift or donate the asset (again 5 years) or a Partnership long term care insurance policy, which the state plan is not. see partnershipforlongtermcare

Leave a Reply

Your email address will not be published. Required fields are marked *

Real first and last names — as well as city of residence — are required for all commenters.
This is so we can verify your identity before approving your comment.

By commenting here you agree to abide by our Code of Conduct. Please read our code at the bottom of this page before commenting.