A caregiver and her client
getty
Nearly two years ago, social insurance advocates were celebrating the creation of a new long-term care program in the state of Washington. Here, for instance, is what The Nation wrote in May of 2019:
“The Long Term Care Trust Act, which passed the state legislature at the end of April and will be signed into law by Governor Jay Inslee on Monday, establishes the country’s first social-insurance program to pay for long-term care. All residents will pay 58 cents on every $100 of income into the state’s trust. After state residents have paid into the fund for ten years—three if they experience a catastrophic disabling event—they’ll be able to tap $100 a day up to a lifetime cap of $36,500 when they need help with daily activities such as eating, bathing, or dressing. . . .
“The architects of the legislation were trying to find ‘a number adequate enough to meet people’s needs and at the same time not be catastrophic if everybody [made claims] at the same time,’ [AARP vice president Elaine] Ryan explained. ‘To make it actuarially sound so people could be guaranteed a benefit.’
“The policy’s universal structure and funding is also significant. All working people will pay into the fund through a payroll tax and then be able to claim a benefit when they need it. The same structure has ‘stood the test of time’ with Social Security and Medicare, Ryan noted. Politically speaking, ‘it mattered a lot that it was set up as a social-insurance program,’ Caring Across Generations’ [Sarita] Gupta said.”
It sounded great — but too good to be true.
Now officials in Washington are recognizing there are problems with the plan.
In December, Gov. Jay Inslee announced a delay in the start of the payroll tax, so that the legislature could make changes when the new session convenes on January 10th, following a multitude of complaints about the program, in particular because workers who move out of state, or who were less than 10 years away from retirement, would be paying into the system without ever being able to benefit from it. The tax is now planned to begin in April, but if House Bill 1732 passes, the tax would be delayed until July 0f 2023. In addition, House Bill 1733 would allow people working in Washington but residing elsewhere, as well as temporary workers with nonimmigrant visas, and disabled veterans and spouses of active duty military members, to opt out. Neither of these bills, however, would deal with the issues posed by the eligibility requirements themselves.
But these eligibility requirements are in place for a reason, to reduce costs with lower numbers of recipients, and to build up reserves which are spent down as current workers ultimately retire. Here’s what the 2017 feasibility study itself reported:
“We estimate the Base Plan under Option 1 will require a 0.54% payroll surtax rate over the 75-year period 2020 through 2094. We estimate an ultimate tax rate of 0.94% to cover program costs after 2094 once the population receiving benefits has stabilized.” In other words, if all Washington residents were eligible regardless of age and contribution history, the cost of the program would double, because that’s what will ultimately happen when, 75 years into the future, all retirees have paid into the program. In practice, the actuaries consulted for this report anticipated that payroll taxes would be increased well before the 75 year period ends.
In addition, the $100 per day benefit is slated to increase by no more than the inflation rate, and possibly be reduced if it is deemed necessary for solvency purposes, according to the enabling legislation. And that $100 per day benefit is anticipated to be enough for the average individual receiving 96 hours of home care per month, based on Medicaid rates, for one year, according to the legislation’s findings.
One might argue that, however imperfect this legislation might be, its flaws can be remedied in the future. But the law is a mixture of characteristics of programs of social assistance and social insurance, to its detriment. A requirement to have paid into the system is characteristic of a social insurance program, and the 10 year contribution requirement is essentially the same as the eligibility requirement for Old Age benefits in Social Security. However, true social insurance programs pay out benefits to those eligible regardless of residence — again, once you’ve paid into Social Security long enough to have earned your benefit, you can collect regardless of where you live, even if you have moved abroad. In fact, even noncitizens who worked in the United States long enough to have accumulated sufficient Social Security credits, can receive benefits after having moved back to their home countries. What’s more, many social insurance systems provide some sort of refund mechanism for workers who do not accumulate enough contribution years to be eligible.
And this hybrid system will likely prove to be unsustainable politically. Even if ordinary Washingtonians are not well-versed in social insurance concepts and theories, it will not sit right with them that those who retire with 10 years of payroll taxes have “earned” their benefits but those with 9 years have not, and, likewise, that those who have “earned” benefits would lose those “earned” benefits merely by moving out of state. How precisely this will play out over the long term remains to be seen, but the new bills are not likely to be the end of the story.
In any case, these problems will not be easy to remedy.
As always, you’re invited to comment at JaneTheActuary.com!
order generic levaquin 250mg order levofloxacin 500mg without prescription
avodart ca buy flomax 0.4mg generic order ondansetron pills
order aldactone pills purchase propecia order fluconazole 200mg pill
buy ampicillin 500mg sale bactrim 960mg us buy erythromycin 500mg generic
fildena 50mg over the counter nolvadex 10mg uk order methocarbamol 500mg online
suhagra buy online aurogra online purchase estradiol sale
buy lamotrigine 50mg order mebendazole without prescription oral tretinoin cream
tadalafil 10mg for sale avanafil 200mg for sale diclofenac brand
isotretinoin price azithromycin oral cost zithromax 250mg
indocin 50mg canada terbinafine 250mg over the counter order trimox 250mg pill
tadalafil dosage cialis 20mg price pfizer viagra
buy anastrozole 1 mg online cheap viagra professional review viagra 100mg pills for men
tadalafil 40mg generique pas cher viagra generique sildenafil 25mg pour homme
order prednisone 10mg generic sildenafil over the counter price viagra
tadalafil 5mg generika rezeptfrei kaufen viagra 200mg kaufen für männer sildenafil bestellen
accutane 40mg ca buy stromectol 3mg online stromectol coronavirus
buy doxycycline pills furosemide 40mg over the counter lasix 100mg cheap
buy altace 5mg online cheap buy astelin generic buy astelin online
catapres 0.1mg cheap buy minocin without prescription order spiriva generic
buspar 5mg without prescription dilantin cost cheap ditropan
order hytrin 1mg online buy actos 30mg pills azulfidine pills
fosamax 35mg price order fosamax without prescription famotidine drug
benicar 20mg over the counter buy diamox 250mg acetazolamide 250 mg canada
tacrolimus 5mg over the counter brand labetalol 100 mg ursodiol 300mg over the counter
bupropion 150 mg ca bupropion price purchase quetiapine sale
order molnunat pills buy cefdinir 300mg online prevacid generic
buy zoloft 100mg generic Brand viagra over the net sildenafil 100mg us
imuran 100 mcg oral guaranteed viagra overnight delivery usa sildenafil otc
tadalafil usa symmetrel 100mg pill buy symmetrel 100 mg for sale
naltrexone over the counter order albendazole online order aripiprazole 30mg online cheap
buy avlosulfon 100 mg online order avlosulfon generic aceon 4mg pill
order medroxyprogesterone 10mg without prescription order medroxyprogesterone 5mg sale cyproheptadine 4mg tablet
modafinil 100mg uk safest canadian online pharmacy ivermectin 6 mg without prescription
order luvox 100mg pills order nizoral generic glucotrol 10mg for sale
buy isotretinoin 10mg online purchase isotretinoin without prescription order prednisone 10mg generic
brand nootropil 800 mg sildenafil 100mg oral sildenafil pills 150mg
zithromax 250mg pill gabapentin pills neurontin price
us cialis sales tadalafil pill order sildenafil 100mg online
furosemide for sale online buy doxycycline 200mg online order hydroxychloroquine 400mg generic
buy cialis buy anafranil for sale clomipramine online order
brand chloroquine 250mg cenforce canada cost baricitinib
itraconazole 100mg ca sporanox 100 mg us tinidazole 500mg pills
glycomet 500mg for sale glucophage 500mg generic cialis overnight delivery
brand olanzapine purchase bystolic without prescription buy valsartan 160mg
norvasc online order tadalafil 5mg generic tadalafil 10mg us
clozapine 100mg generic clozaril over the counter order decadron 0,5 mg for sale
viagra 100mg england lisinopril 5mg brand lisinopril us
zyvox sale casino online blackjack bonus casino
prilosec 10mg usa help with writing a research paper real money spins
order lopressor 50mg buy metoprolol 50mg online buy generic levitra 20mg
help writing papers for college online casino games real money casino blackjack
order levitra 20mg online cheap lyrica 75mg oral methylprednisolone without a doctor prescription
where can i buy an essay research paper assistance viagra 50mg cheap
purchase clomid generic generic clomid online roulette real money
order tadalafil 5mg online viagra 50mg usa sildenafil 100mg sale
order aristocort 10mg pills buy claritin 10mg pill desloratadine canada
order dapoxetine 30mg online order levothyroxine generic purchase synthroid pills
buy cialis 20mg for sale viagra 100mg without prescription sildenafil on line
brand xenical 60mg buy diltiazem generic buy zovirax 800mg online cheap
tadalafil 20mg ca order cialis 10mg online cheap order plavix without prescription
buy cozaar 50mg pill order topamax online cheap oral topiramate 100mg
order ozobax for sale brand zanaflex buy toradol online cheap
sumatriptan 50mg us oral avodart purchase dutasteride sale
buy gloperba for sale order colchicine online parx casino online
play great poker online no deposit casino casino slots free
flomax 0.4mg pill buy spironolactone 25mg spironolactone online buy
order tadalafil online cheap cialis cost cipro 500mg pill
simvastatin cheap valacyclovir 500mg ca brand finasteride 1mg
flagyl 200mg price cheap augmentin 625mg buy bactrim 960mg online cheap
fluconazole 200mg tablet order generic diflucan us viagra sales
cephalexin 500mg usa cost cleocin 300mg purchase erythromycin for sale
sildenafil overnight shipping viagra 100mg price buy cialis sale
ceftin 250mg pill cefuroxime 250mg price order generic methocarbamol 500mg
online casino real money casino real money buy tadalafil 20mg generic
oral trazodone 100mg aurogra 50mg oral buy aurogra 100mg for sale
top essay writers help me with my paper buy ivermectin for humans
buy sildalis generic viagra sildenafil 150mg buy lamotrigine for sale
order deltasone 20mg online amoxil 1000mg uk amoxil 250mg ca
buy viagra for sale cialis 5mg usa order generic tadalafil 10mg
blackjack online game cialis 10mg generic buy tadalafil 40mg
azithromycin 250mg pills order prednisolone 40mg generic neurontin over the counter
poker online game buy provigil 200mg for sale cost provigil 100mg
lasix 100mg cost order plaquenil 200mg without prescription buy plaquenil 400mg online
cost fildena 50mg nolvadex medication rhinocort over the counter
cheap prednisone 40mg order mebendazole 100mg online purchase mebendazole online cheap
order tretinoin cream for sale order avanafil order avana 100mg
buy tadalafil 20mg online buy generic tadacip 20mg buy indomethacin 75mg online cheap