Elizabeth New: Cost of care is increasing, but WA Cares’ benefit isn’t

By Elizabeth New

Ever since 1977’s “Star Wars,” kids have re-enacted the iconic “Jedi mind trick” scene in which a Jedi uses the Force to implant a suggestion into the minds of others, encouraging them to comply with the Jedi’s wishes.

Washington state officials seem to be trying to pull the marketing equivalent of a Jedi mind trick on us. They have a campaign that promotes participation in a long-term care program that is already mandatory, with a soothing promise that we don’t need to think about possible long-term care needs in the future. That new program, WA Cares, is accompanied by a significant payroll tax and should not give us peace of mind.

Even if you qualify for a WA Cares benefit (and you might not), the benefit is capped at $36,500. That won’t go far. And as costs rise with inflation, that lifetime benefit is getting smaller.

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% among various long-term care (LTC) services in its most recent Cost of Care Survey. That continues an upward trend seen over the past several years. The company estimates that on the low end for LTC services, a part-time (20 hours 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 maintains 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, since lawmakers aren’t considering updating the inadequate benefit. There has been discussion about increasing the payroll tax for WA Cares and making more workers ineligible for the program to ensure program solvency.

State marketing also has been assuring the benefit will grow with inflation, but pay attention to the fine print: It won’t necessarily rise with inflation. It will increase “up to” the rate of inflation.

In a December meeting of the Long-Term Services and Supports Commission, Sen. Curtis King, R-Yakima, asked if the $36,500 benefit will rise with inflation automatically or be subject to approval. 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. The amount is capped at the rate of inflation. 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.)

Stephen Forman, senior vice president of Long Term Care Associates, has been watching how WA Cares differs from private long-term care insurance. He says, “The law does not require an increase. Several failsafes in the law allow the benefit to decrease if needed.” Forman adds, “One of the most valuable features in private insurance is automatic inflation protection. As anyone who’s sold these policies knows, it’s also an expensive component of the policy – that’s why WA Cares left it out.” He says this provision leaves consumers in a lurch and negates the ability of the state program to coordinate benefits with the private market.

With the cost of care expected to continue climbing, WA Cares is becoming an even worse bet for workers. Already, they are forced to pay 58 cents of every $100 they earn to the state for a benefit they might never receive and some low-income workers will inevitably end up paying this tax so that high-income people with resources of their own can benefit.

The problem with officials’ Jedi-mind-trick marketing is that they’ve forgotten that such tricks work best on the weak-minded. Anyone with knowledge of WA Cares’ many limitations will not be easily deluded.

This November, voters will decide whether to put their own stamp in the fine print concerning WA Cares. Initiative 2124 would make participation in the program voluntary.

Elizabeth New is director of the Centers for Health Care and Worker Rights at the Washington Policy Center. Members of the Cowles family, owners of The Spokesman-Review, have previously hosted fundraisers for the Washington Policy Center and sit on the organization’s board.