LOCAL NEWS

Analyst’s advice for Washingtonians who got private long-term care insurance

Jan 21, 2022, 12:46 PM
Long term care insurance...
(Pexels)
(Pexels)

With the State House of Representatives passing a bill to delay the WA Cares tax by 18 months, there are more questions than answers for those who bought private long-term care insurance instead.

About 450,000 people opted to avoid the 0.58% tax on income — about $300 a year for someone earning $50,000 — by getting a qualifying long-term care insurance plan as an alternative.

Amy Anderson, government affairs director for the Association of Washington Business, said many of those who rushed to buy insurance plans before the deadline last fall likely planned to drop their coverage as soon as they got their opt-out letter from the Employment Security Department.

Legislator says WA Cares tax needs ‘some common sense’

Under the new circumstances, though, Anderson advises those people to think again.

“In the current law, there is not a process by which the Employment Security Department will come back and ask you to re-certify,” she said. “However, that does not mean that it won’t happen in future.”

She said that other than the action that has already been taken, lawmakers plan to table the long-term care discussions until next year. However, the Long-Term Services and Supports Trust Commission has already recommended mandating another check-in process by ESD to make sure that people are still current with their insurance plans — so Anderson said that people may want to hang onto those plans a bit longer.

In the meantime, the long-term care insurance industry is not expecting a high number of dropouts.

“They have not necessarily looked at that as, ‘This is going to completely decimate the insurance industry,'” Anderson said. “Are people going to drop it? Sure. Is that rate higher than what they would normally expect? That’s hard to say.”

Those insurance companies, she said, are counting on many people deciding that because insurance is smart to have — and because private is generally “a more robust product” than public in terms of what is covered — they will keep their plans.

But the road has not been smooth for the insurance providers. Anderson said that the effects of the WA Cares tax completely disrupted the market in Washington last summer and fall, as insurance companies realized that they would be selling plans to customers who planned to soon get rid of them.

“The way the law is currently written, you have the ability to drop that product. That is why the long-term market in the state collapsed … Carriers stopped selling long-term care insurance in Washington state,” she said. “It became apparent that … it became a tax-avoidance tool.”

In early September — two months before the deadline — the Office of the Insurance Commissioner told KIRO Newsradio that none of the state’s insurance companies were selling long-term care insurance for this reason.

That is why Anderson and the AWB would like to see future changes with the law include a grace period for people who still would like to buy private plans and opt out, but did not have the chance last year when the market collapsed. They would also like to see the tax include benefits for people who pay in, but then move out of state.

As the law is currently written, a person who pays in for more than 10 years and still lives in Washington state can draw a lifetime maximum of $36,500.

“This is a policy that does not address the actual long-term care needs in the state of Washington. It was originally meant to be a bridge product for folks, to get them from a current situation to where they qualify for Medicaid,” Anderson said. “It is a very limited benefit, only $36,500 one time, which does not get you much long-term care. Long-term care is extremely expensive.”

The AWB is hopeful that the likely delay for the tax will give lawmakers time to take a second crack at their work and make some improvements.

“The fact that we have an 18-month pause, from the business community perspective, we’re looking at this as, let’s really dig down and start to address what are the long-term care needs for Washingtonians, and how do we effectively address that,” Anderson said.

Local News

(Luis Sinco/Los Angeles Times via Getty Images)...
MyNorthwest Staff

Copper River Salmon is back with its most inflated price yet

Alaska’s Copper River salmon arrived at Seattle-Tacoma International Airport Tuesday morning, marking the start of the season for the popular fish.
1 day ago
Students working in a sloyd room at the Indian Industrial School. (Photo courtesy of the William A....
Frank Sumrall

Federal Indian boarding schools implemented systematic cultural whitewashing, new report reveals

The U.S. Interior Department published a report detailing the atrocities committed at boarding schools against Indigenous people. 
1 day ago
vouchers...
Dalton Day

What Seattle’s recent election reveals about the success of democracy vouchers

Andrew Grant Houston's campaign for mayor asks questions about the success or failure of Seattle's democracy vouchers program.
1 day ago
Blood reserves are filtered and processed in the central laboratory of the DRK blood donation servi...
Nicole Jennings

PNW blood platelet shortage no longer ‘critical,’ but 2,000 donations still needed

The Pacific Northwest is in need of thousands of blood platelet donations. Blood platelets stop us from bleeding to death when we have a cut.
1 day ago
Follow @http://twitter.com/Mynorthwest...
MyNorthwest Staff

ORCA overhauls system with added features and updated card readers

ORCA's highly-anticipated new website, smartphone app, and real-time value loading for cards launched today for hundred of thousands of transit customers.
2 days ago
ExperTec Automotive technician Adelmo Rodriguez etches a catalytic converter with the cars license ...
Micki Gamez

Catalytic converter theft runs rampant in Seattle, nation sees dramatic increase

Catalytic converters became a hot commodity during the pandemic due to the high-priced metals, such as platinum, palladium, and rhodium, within them.
2 days ago

Sponsored Articles

...

Anacortes – A Must Visit Summertime Destination

While Anacortes is certainly on the way to the San Juan Islands (SJI), it is not just a destination to get to the ferry… Anacortes is a destination in and of itself!
...

Ready for your 2022 Alaskan Adventure with Celebrity Cruises?

Celebrity Cruises SPONSORED — A round-trip Alaska cruise from Seattle is an amazing treat for you and a loved one. Not only are you able to see and explore some of the most incredible and visually appealing natural sights on the planet, but you’re also able to relax and re-energize while aboard a luxury cruise […]
...

Compassion International Is Determined to ‘Fill’ a Unique Type of Football ‘Stadium’

Compassion International SPONSORED — During this fall’s football season—and as the pandemic continues to impact the entire globe—one organization has been urging caring individuals to help it “fill” a unique type of “stadium” in order to make a lasting difference in the lives of many. Compassion International’s distinctive Fill the Stadium (FtS, fillthestadium.com) initiative provides […]
...

What are the Strongest, Greenest, Best Windows?

Lake Washington Windows & Doors SPONSORED — Fiberglass windows are an excellent choice for window replacement due to their fundamental strength and durability. There is no other type of window that lasts as long as fiberglass; so why go with anything else? Fiberglass windows are 8x stronger than vinyl, lower maintenance than wood, more thermally […]
...

COVID Vaccine is a Game-Changer for Keeping our Kids Healthy

Snohomish Health District SPONSORED — Cheers to the parents and guardians who keep their kids safe and healthy. The dad who cooks a meal with something green in it, even though he’s tired and drive-thru burgers were tempting. The mom who calms down the little one who loudly and resolutely does NOT want to brush […]
...
Experience Anacortes

Coastal Christmas Celebration Week in Anacortes

With minimal travel time required and every activity under the sun, Anacortes is the perfect vacation spot for all ages.
Analyst’s advice for Washingtonians who got private long-term care insurance