Olympia Update

OLYMPIA–House Republicans today called for a repeal of the Democrats' new long-term care insurance program and payroll tax. Rep. Joe Schmick and Rep. Peter Abbarno have drafted legislation to repeal the state program, saying it is unfair, inadequate, insolvent, and that the payroll tax is regressive.

"This program creates the false hope that people's long-term care needs will be satisfied, when in fact, it will be woefully inadequate for the majority of those who eventually need long-term care. People who live out of state but work in Washington, those who are within 10 years of retirement, and workers who eventually move out of state, will be forced to pay into this program, but will likely never receive a benefit," said Schmick, ranking Republican on the House Health Care and Wellness Committee.

"Nearly 63 percent of voters said last year during an advisory vote this should be repealed. And many people weren't aware until it was too late to opt-out that they would be forced to surrender a portion of their wages to the state through a long-term care payroll tax," Schmick added.

The new system was created initially by the passage of House Bill 1087 on April 23, 2019. Beginning Jan. 1, 2022, Washington workers will pay up to $0.58 per $100 of earnings for the program. Beginning Jan. 1, 2025, each Washington worker eligible to receive the benefit can access services and supports costing up to $36,500.

"This is a regressive payroll tax that gives working families the illusion that their long-term care needs are satisfied with this 'short-term' limited care program. The reality is that private investments provide greater benefits with greater flexibility in long-term care. Ultimately, this is an insolvent program that will lead to higher taxes or lower benefits," said Abbarno, R-Centralia. "The real solution is to follow the will and vote of the people by repealing the payroll tax program and address long-term care by incentivizing investments, not punishing and marginalizing working families."

Today, Nov. 1, is the deadline for Washington workers to secure a qualified, private long-term care insurance policy. Once a policy is secured, workers can apply for an exemption. Many people have not been able to find a policy in time or are unaware of the new program.

Editorial boards have also been critical of the program, calling for a pause to it, pointing out flaws, and suggesting fixes.

House Republicans may also introduce legislation to make the new long-term care insurance program and payroll tax opt-in only, and put forward other real solutions related to the issue. The new payroll tax is one of many new tax increases passed by Democrats and Gov. Jay Inslee the last three years, despite record state tax collections.

The 2021 legislative session will begin Jan. 10 and will run 60 days