The Washington Cares Fund

Many of you have written to me recently asking about the “Washington Cares Fund.” This is a trust fund created by a 2019 law to implement the state’s new long-term care program. The Legislature that year approved and Governor Inslee signed House Bill 1087 concerning long-term services and supports. In accordance with the law, Washington state will be requiring all workers to pay into its long-term care program regardless of whether they will receive benefits from it. This mandatory long-term care program has a maximum lifetime benefit of $36,500. It is funded by a .58% payroll tax, which amounts to $5.80 for every $1,000 of earnings.

What is funded by the program?

I suspect that the program will be adjusted multiple times over the next several years and beyond. However, as initially authorized, the program is available to any Washington state resident over the age of 18 who has paid the payroll tax premium for at least three of the last six years or for a total of 10 years, with at least five years paid without interruption. The program has a maximum lifetime benefit of $36,500 and people qualify if they need assistance with at least three of the following daily activities: medication management, personal hygiene, eating, toileting, cognitive functioning, transfer assistance, body care, bathing, ambulation/mobility, and dressing. The Washington State Employment Security Department will help implement the tax collection. People can apply for an exemption through the department if they have purchased long-term care insurance through a private provider by November 1, 2021.

Why I voted against the long-term care tax

Ensuring that our population has access to quality long-term care is a very important issue. As many of you know from friends and relatives, long-term care service is very costly. While this new program is intended to help people and may benefit some, creating a government program to tax everyone’s paychecks for years and years – including younger workers struggling to repay student loans and save for a home – seems very burdensome. This is especially true for a limited benefit that workers may never receive, either because they end up not needing long-term care or they have moved away. This benefit is also, at least currently, not “portable” across state lines. Many private or employer-based long-term care insurance programs are portable. Since the state program is currently not portable, workers who someday move to another state are no longer eligible to receive benefits despite paying into the system throughout their working careers in our state. Lastly, the cost of long-term care can far exceed the program’s maximum lifetime benefit of $36,500, so this program will likely significantly underperform in its efforts to fund people’s long-term care needs. For all these reasons, I voted against House Bill 1087 in 2019. The bill, however, passed the House of Representatives (63-33) and the Senate (26-22). I have joined many of my colleagues to call upon Governor Inslee to intervene related to the new long-term care tax.