At the most recent meeting of the group charged with improving, monitoring and implementing the WA Cares program, I was reminded about a few good changes implemented last legislative session. And I pointed them to an idea for future recommendations.
WA Cares is the mandatory long-term-care (LTC) program created in 2019 that takes wages from Washington state’s workers (58 cents of every $100 of earnings). In return, workers might qualify for a possible benefit of $36,500, if they ever need LTC and have paid into WA Cares long enough to be eligible for the taxpayer dollars. Low- and high-income workers are forced to pay the tax for a need they might never have, displacing money that could be used on needs they do have or better investments. The law has been tweaked several times, and House Bill 5291, a list of recommendations from the Long-term Services and Supports (LTSS) Trust Commission, did several helpful things.
Because of the bill’s passage, a WA Cares eligibility provision that required workers who are in need of long-term care someday to have paid into the WA Cares payroll tax for 10 years without a break of five or more consecutive years to be eligible was modified. The “break of five or more years” language was removed. For years, I have pointed out that the provision would exclude some of the very caregivers that supporters of WA Cares say the program is meant to help.
HB 5291 also rightly brought automatic exemptions from the program to military members working civilian jobs and people in Washington state on work visas.
Another thing it did was fix the way the possible $36,500 lifetime benefit attached to the program would increase over time. That is another detail I have been critical of over the years.
The benefit amount has been stagnant since 2019. And as bad as not adjusting to real-world costs for LTC that have grown the past six years, the benefit was not even set to automatically rise with inflation when payouts began. The state’s guidance about how the benefit amount would rise explained, “The benefit amount will be adjusted annually up to the rate of inflation,” and, “A benefit council will determine the amount of the increase each year.”
The key words I was paying attention to were “up to.”
As Stephen Forman, senior vice president of Long Term Care Associates, said of the situation in 2024, “To keep up with the cost of living, the $36,500 benefit passed in 2019 should have already grown to $44,800. As it is, WA Cares is not expected to hold debate on its first cost-of-living adjustment for another three years — July of 2027. By then, WA Cares will have easily fallen $10,000 behind the cost of care, which beneficiaries will have to make up out of their own pockets.”
HB 5291 changed that “up to” nonsense, saying, “The term benefits units is modified to include an automatic adjustment for inflation by the CPI, rather than the CPI as determined by the LTSS Council.”
Future recommendations
Since the commission is familiar with the need many people in our graying population will have for long-term care and because it understands the shortcomings of WA Cares, I urged them to recommend that lawmakers get to work on changes to Medicaid’s long-term-care program.
This safety net that already existed for people in financial need of long-term care before Washington state started taxing workers for LTC — and that WA Cares was created in part to help — needs protection.
Washington state is aging and an increasing number of people are applying for Medicaid long-term care (LTC) earlier. This will lead to longer durations of use and escalating costs for taxpayers. LTC costs already consumed 20% of $29.2 billion in Medicaid spending in Washington state in fiscal year 2022, and Medicaid enrollees who used long-term services and supports comprised 6% of total enrollment but 37% of federal and state spending.
The WA Cares Fund is not likely to solve the problem with Medicaid long-term-care demand. Given high long-term-care costs, irresponsible state messaging about the “peace of mind” WA Cares brings, and the lifetime benefit of $36,500 (adjusted eventually with inflation), program recipients will often exhaust the benefit and then seek taxpayer help through Medicaid. This reliance on taxpayers is concerning as program eligibility remains broadly accessible.
Medicaid eligibility rules allow people to rearrange their assets to appear poor and qualify for taxpayer-funded long-term care, even if they have $1.1 million in home equity. And while estate recovery — which is meant to help recoup program dollars for taxpayers after an LTC recipient’s death — supports program integrity and sustainability, the state recovered only 0.34% of $5 billion in fiscal year 2025. When I asked how many estates were pursued, I was informed that information was unavailable.
Reforms to both eligibility and estate recovery are needed. Medicaid needs to be a safety net — not an inheritance-preservation vehicle — protecting resources for vulnerable Washingtonians.
My policy paper highlighting program protection and taxpayer savings is here, and I can’t think of a better group to recommend these solutions to our lawmakers.