The Seattle Times? Wrong?
Shocked, I tell you!
(I'm waiting for them to endorse the spirit of Ellen Craswell for Governor - could happen!)
Given the skyrocketing costs of geriatric care, $36,500 isn't going to go very far: by 2030 the estimated annual costs for in-home assistance in Washington State will be around $80,000, and a semi-private room will average around $127,000 (https://www.genworth.com/aging-and-you/finances/cost-of-care.html), so don't count on this fund to cover much more than about 18 months worth of adult day care. Still, a tiny bit of something is better than nothing I suppose.
Just to be clear, you “opt in” simply by virtue of being a state resident. You don’t have to actually do anything, unless you’re dumb enough to listen to the Times and want to keep your 59 cents.
One issue I have with the way this is written not the program itself. Author makes statement that many boomers are set to retire soon.....then leaps from that to long term care. Are we to assume retirement = needing LTC right away? I don't agree. Not all individuals end up needing specialized medical care. I know of many that have passed on having died at home skipping the whole LTC thing entirely. To assume all will need this is simply not true.
You should absolutely opt out, and obtain private LTC insurance instead.
The State LTC benefits are not portable--if you need LTC care outside of Washington, you are not covered. The State LTC benefits are also pretty limited: you get far more for your premiums with a private plan. In addition, private plans will generally have a death rider, which essentially turns your LTC insurance into a life insurance policy, an option not available under the State plan. Finally, obtaining private LTC insurance accomplishes the goal of the Long Term Care Act, which is reducing the burden on Medicaid.
The fact that the authors do not address private LTC insurance is troubling. For most people, opting in as the authors suggest is a terrible idea.
This is all great except it overlooks the fact this is a terrible plan.
For starters the plan is not portable so if you work in WA your whole life, pay into the plan and then want to retire somewhere warmer too bad. No money for you.
The plan is also terrible for high earners because it taxes total compensation inclusive of bonuses and stock grants making it uncompetitive with private plans and ensuring they will opt out. For example if you make $125k year, the state will deduct $725 from your comp for this plan. You can get a better plan on the private market for half of that, that is if you can still find one. Due to this ill thought out scheme by our overlords many private plans are exiting the WA market meaning people will get stuck with a less desirable insurance benefit, pay more for it and if they leave the state won't be able to use. Some companies have made plans avail to employees on their own like Microsoft and Amazon so all those employees's won't be part of this.
But wait there's more. If you are on the verge of retirement now you will get to pay into this plan and never use it because you won't have accrued enough time in the plan. Better yet if you are an out of state worker who is employed by a company in WA state you get to pay into this plan and never use it either (good times!)
Finally as Comte noted if you are young in your career you will end up paying way more than the coverage provides. A 20 year old who averages $100K during the course of their career will pay $44K for $36K in benefits over 40 years. Wow, what a bargain!
If you haven't already you need to start shopping around now for a private plan and opt out of this before you get sucked into the boondoggle. Fun fact, the state hasn't set up any type of verification process after you opt out to make sure you keep your plan so I know a few people who are signing up for private plans with the intent to opt out and then cancel them. lol.
$36,500 lifetime benefit is about 120 days at a skilled nursing or long-term care facility. And it isn't portable, so if you move out of washington, you lose it. This program is a joke. I guess it is better than nothing, but not by much.
Yeah, no. Medicare For All or GTFO. This piecemeal shit doesn't work for all of the reasons stated above. What incentive is there for me to further subsidize Boomer retirement in addition to the SS/Medicare taxes I'm already paying, while all but assuring nothing I'm going to get a negative ROI when I need it? I'd rather die young.
“ Our system is ill-equipped to handle our aging population”
Boomers should have thought of that 50 years ago.
Like others said-if you can find a way to buy private LTC insurance do it. It’s not that much more expensive than this program and the benefits are way better.
Misanthrope dear, in many ways our society was better equipped to elderly people fifty years ago, and the boomers dismantled much of that.
Horrible plan and horrible tax.
This program is being run by WA State Employment Security. ESD is the LAST State Dept. anyone should be giving money to (unemployment fraud, anyone?)! On top of that, if anyone thinks that .58/$100 is a rate that will adequately fund this program for more than a year, well, just consider that ESD came up with this rate to entice us all into NOT opting out. That rate is going to go up significantly after the opt out period is over and a real actuary looks at it. Get out while you can for the reasons @6 has identified and more...
I look forward to this pulling a Monorail, shutting down in a few years and our money evaporating.
Another round of the "nanny state" getting involved in handling every facet of one's life from cradle to now the grave.
Only about 2% of the entire adult population ends up in a nursing home and about 4% in assisted living. There is this thing called insurance for this risk. Its readily available and easily purchased---if you are concerned and want to leave money to your laughing heirs.
Well what if the person can't afford this insurance...well then the state can pay for it. What would be smarter is for the state to just pay the insurance premium for those who can't pay instead of picking up the entire bill. But that would involve the government officials using their brains and market resources already in place to solve a problem.
So I simply ask again...why or why do we have to tax the wage earners for a 2% or 4 % chance this might happen, when insurance is available for this risk.
Do we need now to have a payroll tax deduction for car insurance? Flood insurance? Apartment Insurance? Fire insurance? ....
I have been trying to opt out like crazy the last few days, but I think I’m too late. Most private insurance has suspended selling new Long Term Care Insurance policies. Of the few I’ve found that are still offering policies, one was limiting them to folks over 50, one would only sell a policy as a rider to a whole life policy with a big annual premium, and one required a ten-year commitment with a huge up-front payment.
So, for many people, it looks like the “option” to opt-out of this program not really a viable option at all, and we’re going to be forced into this half-baked scheme that we want no part of. The worst part is the propaganda that comes with it…the attitude that they’re doing us a favor and providing us a great new benefit, while hiding the downsides and costs. Sure, it will help some people at the margin—but it’s really just a money grab from other people who are getting a terrible deal (folks nearing retirement who will pay in but get no benefit, people who retire to another state who will get nothing after paying in for their whole career, people who live in another state but work here, who will pay in but get nothing, and higher income people who will pay more for the same thing, effectively subsidizing people who want to retire at their expense instead of working longer/saving more so that they can take care of themselves).
In an advisory vote in 2019, people voted against this proposal by roughly 63% to 37%, but the true believers in the legislature didn’t back off, and now it looks like we’re going to be stuck with it.
"In an advisory vote in 2019, people voted against this proposal by roughly 63% to 37%, but the true believers in the legislature didn’t back off, and now it looks like we’re going to be stuck with it."
Until I-1436 making participation in the program optional passes by 60%, forcing the state to amend or kill the program. Sure, it'll be challenged in the courts by the usual actors, and may be ruled against by our hyperliberal state judiciary, but the political damage will be significant. Democrats will end up running away from this policy when their own high income voters show up with torches.
A $200K Seattle tech employee will pay $1160/year into a program that's essentially vaporware. Don't expect that to go unnoticed.
@17 Here is a comprehensive list of LT Care Providers and rates:
@8 Rock on....you understand completely.
We have the largest PONZI scheme in the world going on right under our noses. There is no way in hell to pay all the future benefits promised off the backs of future generations (especially the millennials and gen Z). This is never going to work.
By 2030 those baby boomers are going to have little glum faces and ask where is our money? We was promised soc. security benefits and medicare/medicaid and now there isn't enough money... and we are stuck with this multi-trillion dollar debt.
The solution...tax the living shit out of the millennials and gen z workers. Your socialist paradise is not very far away. The state will take your little pay check, extract lots of tax and sprinkle out a little trickle of cash for you ...just like an allowance.
Yup... your generation is pretty well screwed. Better hope mommy and daddy leave you an inheritance--of course you'll need to pay a thumping estate tax.
@20 Lol that's quite a rant. Yes this LTC plan is dumb but also you are unhinged.
For tax year 2017, the estate tax exemption was $5.49 million for an individual, or twice that for a couple. However, the new tax plan increased that exemption to $11.18 million for tax year 2018, rising to $11.4 million for 2019, $11.58 million for 2020, and now $11.7 million for 2021
@ 21 Perhaps it is a rant as much as a fairly accurate prediction of the future. Why shouldn't one be passionate about the horrible state of affairs and dire consequences we are facing. If I were 20 something it would be far worse than a rant.
Do you think they will continue to pay out full social security benefits when the funds aren't coming in from the payroll taxes?
Where do ya think that payroll tax is going to come from?
Do you think income tax rates will increase given the massive deficit, with rising interest rates?
Given the proposals to tax "assets" ... why would you think they wouldn't lower the estate tax exemption? The former being even more dangerous to obtaining an inheritance frankly... current asset tax. Yikes.
This article says that long term care is good but says nothing at all about why this bill is good. It's not a good bill, for the reasons everyone has called out:
It's not portable for anyone who leaves the state
The max benefit not only will barely pay for anything, it's low enough that any high earners are guaranteed to lose significant amounts of money
The benefits aren't at all competitive with private options
The current rate is way too low to be sustainable and will inevitably be increased.
Then of course there's the entire asinine process:
The opt-out process STILL isn't available and won't be until October
When changing jobs the onus is on the employee to tell their new employer not to collect the tax
The employer is still required to collect the tax for a period at the start of employment until the paperwork is done and that tax is non-refundable
This is an awful bill that should never have passed, and everyone should opt out.
Or, you know, you could just buy a better, cheaper private plan that works nationwide, and opt out of this brain-dead scheme.
I don't recall the exact numbers, but for me the break-even point for the private plan was somewhere around $55-60k salary, for a plan that is better and also doesn't turn into a pumpkin if you move states or fall under other random conditions, like time to retirement.
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