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Spokane, Washington  Est. May 19, 1883

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Elizabeth Hovde: Dishonest sales suggest WA Cares is a bad gamble

By Elizabeth Hovde

By Elizabeth Hovde

I am a middle-aged, middle-income, single mom. If I’m shopping for something important, like a car or a roof, and I catch the salesman lying to me or hiding key details in fine print, you can bet I’ll be shopping somewhere else.

That’s why I opted out of WA Cares, the new state long-term care program created by the majority in the state Legislature. We just wrapped up the first month in which workers experienced smaller paychecks due to the payroll tax associated with WA Cares. It may not seem like much right now – 58 cents out of every $100 earned – but in these inflationary times, it all adds up, especially if you’re living paycheck to paycheck.

Given all the unknowns about WA Cares’ solvency, how high its tax rate could ultimately go, as well as how the program’s qualifications might mean I will never see any benefit at all, private long-term-care insurance was the right choice for me.

Nearly 500,000 people came to the same conclusion I did, opting out of WA Cares under a short-lived private LTCI exemption window – a window that only some workers in the state even knew about.

Sweetening the deal further was the private plan’s provision that if I don’t end up needing LTC, the money I invested doubles and then is given to my kids. Also, if I ever move out of state, I can still use the insurance, unlike the WA Cares benefit which is not portable.

But back to the example of the dishonest salesman: A quick examination of the state’s marketing effort shows false and misleading statements being essential components of their pitch.

Here’s a brief fact check of some of the state’s more prominent claims:

CLAIM: The state says that with a private LTCI plan, you’ll be paying premiums in your nonworking years.

FALSE: I made a one-time LTCI purchase. As such, I will not be paying premiums in my nonworking years.

CLAIM: For years now, workers of all incomes and ages have been told that private LTCI was hard to obtain and expensive, and that WA Cares would be a better deal.

FALSE: That was not true for many workers. Many people purchased comparable monthly policies with higher payouts than $36,500.

CLAIM: State advertising for WA Cares insists the program delivers “peace of mind” regarding LTC needs.

FALSE: Even if people meet the many program qualifications to receive benefits, how is “peace of mind” possible when $36,500 isn’t going to pay for most people’s long-term care needs? And with solvency questions already plaguing WA Cares, and the state Paid Family and Medical Leave fund requiring a doubling of its tax rate and a state bailout in its short lifetime, how can we have “peace of mind” about the financial stability of WA Cares?

The state’s misleading marketing campaign doesn’t so much inform how to use the program as it does try to convince the public to like a program they’ve been forced to join and want to opt out of.

The truth is we need more people to plan for their long-term care. WA Cares is no substitute for that.

I’m glad to be out of WA Cares. Gambling makes me uncomfortable. And as a single mother of two, I know that small cuts to paychecks matter. For someone making $50,000 a year, the loss of $290 each year is like an extra car payment, extra copayments on medical bills or cutting out a family weekend away.

As noted, WA Cares is 58 cents per $100 now, but if it follows the escalating trajectory of the Paid Family and Medical Leave payroll tax, the cuts to paychecks will only get bigger.

I’m glad I won’t have to budget additional pay cuts for WA Cares.

Elizabeth Hovde is the director for the Center for Health Care at the Washington Policy Center. She’s based in Vancouver, Washington. Members of the Cowles family, owners of The Spokesman-Review, have previously hosted fundraisers for the Washington Policy Center and sit on the organization’s board.