An effort to repeal Washington State’s public long-term care insurance program failed to get enough signatures by the end-of-year deadline to make it on the November ballot. At the same time, Democrats, who control the state legislature, have introduced multiple bills aimed at delaying or revising the program.
The state was scheduled to start collecting a mandatory 0.58 percent payroll tax to finance the insurance program this week. But in the face of a lawsuit and to counter the aggressive push for the ballot initiative, Gov. Jay Inslee said in December the state would not begin to collect the tax until April.
Despite Inslee’s announcement, the law technically still requires employers to withhold the tax though they do not have to remit the levy to the state until April. For those that do collect, employees will see a small reduction in their after-tax pay. If the law is revised, the tax presumably would be rebated to any affected workers.
Inslee’s decision appears to have helped sidetrack the ballot initiative. Supporters of the effort, largely bankrolled by a small group of Republican donors, collected about 200,000 signatures, well short of the 325,000 they needed to get repeal on the ballot.
Still, the backlash against the public insurance program has had an impact on Democratic lawmakers.
Two state representatives proposed a bill to delay state collections of the payroll tax for 18 months, until July, 2023. They’d also make partial insurance benefits available to people age 55 and older who do not work long enough to contribute to the program for 10 years. Currently, most workers must contribute for that period before they can collect benefits.
Two other Democratic representatives introduced a separate bill to allow certain workers in the state to voluntarily opt-out of the insurance program. They include those who work but do not live in Washington, veterans with a 70 percent service-connected disability, spouses or domestic partners of active-duty military, and people with temporary nonimmigrant work visas.
The two bills appear to be direct responses to the lawsuit that challenged the state’s ability to impose a tax on out-of-state residents and older workers. Under the current law, both groups would be required to pay the premium tax even though they would be unable to collect benefits.
Both of the proposed legislative changes are do-able. However, without some offsets elsewhere in the program, they’d likely result in higher premiums, an outcome state officials are anxious to avoid.
The Washington State program provides a lifetime long-term care benefit up to $36,500 to those with personal care needs. The contribution tax initially was scheduled to be collected starting this month and benefits were due to begin in 2025.
The Washington State experiment is being closely watched by states such as California, Illinois, and Minnesota. All have been exploring programs of their own.
In Congress, Rep. Tom Suozzi (D-NY) introduced his own federal public long-term care insurance plan. Unlike Washington State’s front-end coverage, Suozzi’s would provide a public catastrophic benefit. It would pay up to $100-a-day for life, but only after beneficiaries pay their share of costs first. The amount would be based on each participant’s income—the higher their income, the more they’d be required to contribute to their care.
It seems increasingly clear that Washington State is going to revise its long-term care program over the next few months. The only question is: How?