Olympia, WA – May 3, 2021 – There is a new government program, and you will have taxes taken out of your paycheck from 2022 until you are no longer working. You have a limited time to opt out -by November 1st – so please look into your options.
Background. In 2019, in a vote that was almost strictly along party lines, the WA State Legislature created a new program to help pay for long term care for people who may need it. It sounds like a great program, but there are some drawbacks.
1. The program will pay up to $36,500 in a lifetime for long term care needs. The drawback to that is that people will think that their long-term care needs will be met with that amount of money. If you have to be in a nursing home, that amount will pay for maybe 2-4 months, if you are lucky. This benefit will really only help if you only need a wheelchair ramp or perhaps someone to come in to help occasionally, but $36,500 doesn’t last long if you have any greater needs. I am just concerned that people will look at this long-term care program and think they are going to be just fine but will find that it doesn’t even come close to fulfilling their needs.
2. You must work and have contributed to the program for at least 3 of the last 6 years to qualify. That means if you plan to retire before 2025, you will not receive any benefits, but you will be required to pay into the program (it’s a payroll withdrawal).
3. If you work and pay into the program all your life but end up moving before you need to use your benefit, you lose the entire thing. Whereas, if you purchase a long-term care policy from an insurance company, you will be able to utilize it, even if you move.
4. The financial analysis of this legislation is that the pay-in amount will not cover what will be required to be paid out. They will either raise taxes (probable) or reduce benefits (not likely) in the future to deal with this program.
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Ruth Peterson is State Committeewoman for Lewis County Republican Party, and works in the State Senate.
