 LTC Bullet: WA Cares Stalking Horse Survives Friday, November 8, 2024 Seattle— LTC Comment: Washington State ballot Initiative 2124 failed. So what? We opine below.
LTC BULLET: WA CARES STALKING HORSE SURVIVES LTC Comment: All of a sudden long-term care (LTC) is politically relevant. Both Presidential winner Donald J. Trump and loser Kamala Harris promised to help struggling families care for their aging, frail or infirm loved ones. But the growing challenge to provide and fund LTC is nothing new. For decades, policymakers sought to control the rising costs of LTC, which reached $400 billion in 2022, with Medicaid accounting for 61% of this amount. Innumerable analysts, commissions, and think tanks have proposed a variety of solutions. But nearly all of them gravitate in one direction. The most common LTC policy recommendation is to add this service to Medicare or create a new mandatory, payroll-funded entitlement program similar to Social Security. While such a proposal is where most studies end up, the plan has never garnered much national political support. Out of frustration with this federal-level dead end, several states began working on plans of their own. So far, only Washington state has implemented a statewide LTC program based on collecting compulsory payroll deductions. Under WA Cares, workers contribute 0.58% of their paychecks and may receive up to $36,500 in benefits if they need assistance with three or more activities of daily living, such as transferring, dressing, or bathing. Advocates say WA Cares would relieve families of some of the LTC burden and save Medicaid money. Critics claim the program’s benefits are too small to make a difference and that Washingtonians need their incomes now, not in the form of another government promise of aid in the distant future. WA Cares was on the ballot in Washington this year. Initiative 2124 proposed to make the program voluntary. Actuaries and LTC experts believe that would plunge the program into a fiscal death spiral. As the election approached, polls predicted diametrically opposite results. A survey of voters in July indicated approval of the initiative, thus dooming the program. A more recent poll found voters appeared more likely to reject the initiative, hence supporting the program as is. Another October poll showed 45% in favor of the initiative making the program optional, effectively killing it, 33% preferring to keep it as is, and 22% undecided. We now know the outcome. Voters rejected Initiative 2124. WA Cares will remain a compulsory program to which workers must contribute regardless of their preference. Likely the program will encourage other states to follow a similar course and it could revitalize calls for a national-level program of the same kind. Voters rejected WA Cares at the ballot box twice (Advisory Vote 20 and SJR 8212) after the state legislature and Governor Jay Inslee imposed it on them in 2019. Now they’ve changed course acceding to this partial socialization of LTC risk and cost. One thing is certain, WA Cares is a trial run for progressives’ favored solution to socialize LTC risk and cost. On the positive side, we will now have a state-level test of this kind of program. Whether it succeeds or fails could have much wider ramifications for the prospects of such a program nationally. Stephen A. Moses is president of the Center for Long-Term Care Reform, a visiting fellow with the Paragon Health Institute and the author of Paragon’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution.” LTC Comment: Here’s some post-election commentary from thoughtful analysts we follow.
Elizabeth New, Policy
Analyst, Director, Centers for Worker Rights and Health Care,
Washington Policy Center. Ms. New observed that people were confused
about how to vote on 2124 if they wanted the tax to be optional. They
would say to her "Yes! Vote no on this initiative. Get rid of WA Cares!"
She tried to explain that a "yes" vote made the tax optional, thus dooming
the program. Stephen D. Forman, Senior Vice-President, Long Term Care Associates shared the following: • “WA Cares was designed to meet the needs of, at most, 2 out of 10 Washington adults. So, for the other 8 out of 10 residents who are not well-served by WA Cares, what’s your LTC plan?” • “As I wrote in my last piece [LTC Bullet: Guest Column, "Yes on I-2124"], an impressive cadre of organizations—including the state itself—emerged over the summer to evangelize about the value of LTC insurance—great! I hope they’ll keep the momentum going for LTC Awareness Month and beyond since, even with WA Cares, the majority of Washingtonians lack a plan for long-term care.” • “If WA Cares is going to be with us for the long-term, then it’s time for Washington to commit to basic consumer protections which have been lacking. Not only do consumers deserve better when it comes to transparency and disclosure regarding rates, limitations and exclusions, triggers, inflation, etc., but—given the quality of information I’ve encountered during hearings and forums—I’d recommend requiring LTC training of consumer-facing WA Cares representatives, if not the entire LTSS Trust Commission.” “Why do I say WA Cares meets the needs of at most 2 out of 10 adults? The WA population is about 8 million, of whom 6 million are adults. Milliman shows as few as 2.7 million covered to as many as 3.4 million. The latest Fiscal Note shows 3.9 million enrolled. At the lowest estimate, 2.7/8.0 = 34% of all Washingtonians are covered. At the highest, 3.9/6.0 = 65% of all Washingtonians. In either event, WA Cares says its 1-yr benefit period is adequate to cover about 1/3rd of claims, and that 2/3rds of beneficiaries will need additional coverage. So… .33 * .34 = 1 out of 10 whose needs are fully met (low end), and .33 * .65 = 2 out of 10 whose needs are fully met (high end). One other interesting note about I-2124. The last poll before the election showed 45% voting yes, 33% no, and 22% undecided. In the end, ALL of those undecided voted no. They broke 100% no. I suspect this had something to do with the massive amount of special interest money (SEIU primarily) that resulted in unavoidable and ubiquitous ads over the past few weeks. The $8 – 9 million contributed by the NO campaign would’ve ranked it among the larger standalone LTC insurers by new business premium (!) |