Class Act for Washington State?

Washington has passed its version of a long-term care insurance bill, sort of, using a payroll tax to fund it.

Unlike the misconceived Class Act that was originally part of the Affordable Care Act, which was designed to rob Peter to pay Paul, Washington State has just passed its own version, The Long-Term Care Trust Act. While the intent is worthy, I don’t think it will accomplish its goals.

As now passed, the Act will be funded by a payroll tax of 58 cents for every $100 of salary. For someone making $20 per hour, that comes to about $240 per year, and they can least afford it. I have seen no mention of an employer match, but I am sure that is coming.

The sponsors claim that family members who leave the workforce lose on average $300,000 in income and benefits over their lifetime. With a lifetime cap of $36,500 under the Act, that hardly puts a dent into it. Payroll deductions start in 2022, and benefits start in 2025, so we really won’t know how well it works for another decade or so. Too late.

It claims that the payroll tax will go into a separate “Trust Fund,” supposedly meaning that it can’t get robbed to pay for other things. That didn’t work so well for the Social Security and Medicare “trust” funds over the years.

Unfortunately, $36,500 is not going to solve the problem, which comes to $100 a day if used consecutively for just one year. My bet is that it will be used in the early stages of frailty, because it is there, and then what? Back to Medicaid as the answer, again? I am sure the sponsors mean well, but this is too little to solve the problem. When they figure that out, that 58 cents will be rising.


17 comments on “Class Act for Washington State?

  1. This tax is a pathetic deflection of the real problem here in Washington state. That is this administration puts Orca wales, the unions for teachers, climate control and 100 other special interest groups above providing a dignified existence for our seniors. This state is famous for putting special taxes in a “trust” only to have it raided by a special interest initiative at a later date. It saddens me that the Washington state budget just passed is the largest ever increase in spending yet fails to even come close to adequately funding nursing home Medicaid. Idaho pays $45 a day more for nursing home Medicaid. Oregon pays $123/day more. If we had an Idaho address we would receive an additional $1.6M in our Medicaid rate. If in Oregon that would be $4.5M a year more. The silence is defining in governor Inslee’s press releases with not a mention of providing a dignified existence for WA seniors needing nursing home care. They passed the $15/hr minimum and mandated 40 hours sick leave with no increase in Medicaid funding. My nursing assistant wage cost is up 30% since 2017. RN/LPN up 10% and all other wage classes up 4-6%. I’ve been running this 160 bed rural non-profit nursing home since 2008. We have provided around $1M of uncompensated care each year from 2008-1016. This is the difference between what Medicaid pays us and what it actually costs to provide that care for our 100+- Medicaid residents. Increasing wage costs with no matching increase in funding and increasing regulatory burden brought that number to $1.6M in 2017 and $1.7M in 2018. 2019 will be worse. We have been able to reserve $1-$1.6M every year from 2008 to 2016. We lost money in 2017 and 2018.
    Then to add insult to injury this state writes IJ and G citations at 3 times the national median. Then puts the facility in Stop Placement which costs $660K-$1.5M in lost revenue. In 2014 state surveyors wrote 14 IJ citations. In 2017 they wrote 92. That is a 500% increase. And most of these merely for the “Potential” for harm, a “D” level citation according to federal law and CMS rules. Thankfully CMS in March of this year sent out a revised state operating manual which puts a stop to this. 12 nursing homes have closed sing 2017 and there will be more. We have reduced our bed capacity to 145 from 160 with a target of getting our Medicaid census down to 65 residents from our usual 100+-.
    Add all of this together and it is clear that this Governor and majority of the House and Senate really don’t want Medicaid nursing homes. We will continue to shrink our Medicaid skilled nursing bed capacity and increase our privately paying Independent and Assisted living business until the lawmakers in this state choose to be a reliable partner in caring for WA state seniors.
    And if you live in WA state, over 55 and vote- Pay Attention!

    1. I used to work for the State of WA and learned that the reimbursement rate for residents at Fircrest School was over $325 a day, when their reimbursement rate for people in nursing homes was under $100 a day. State institutions are given higher rates since their administrators are appointed and generally in with someone high on the food chain in the government, like friends with the Governor at that time, and they have lots of specialists to teach people how to put a spoon in their mouth. They basically have reached their max skill level by now as most are very long term residents. If placed in a small group home they may do a little better but the institutions really limit their development. I have seen kids taken home with parents on ventilators and tube feedings become independent and walk and live, when given a very poor prognosis. Environment is everything and bonding makes a huge difference.
      The daily reimbursement rate should be public knowledge under the freedom of information act, and you can always ask that these rates be reviewed. It seemed outrageous to me at that time. It is so political you dare ask too many questions if you work for the government. Please do not give my email out. Been gone a long time, but have gotten in trouble speaking out.

  2. Terry, very well said and yes, there is a definite prejudice against skilled nursing facilities in state capitols. Are the elderly in Washington at all angry about all this? Or do they not care because they believe they won’t need nursing care and will go to assisted living? Orcas vs. the elderly? You know where my vote would be.

    1. Sadly they are unaware.
      We as providers and our associations (LeadingAge Washington and Washington Healthcare Association) have to do a better job of getting the word out. And even more sad that one of my board members told me she did not vote for a sitting Representative who for the last 10 years has been very supportive. He lost in a very close race to a teacher union friendly candidate. School spending went up $2Billion in the budget just released. @#$@##$$^&**

      1. I feel your pain, but come to Connecticut which is on par with Illinois as being a fiscal mess and unions in charge of the government purse. All they want to do is increase taxes on the wealthy, but the wealthy are leaving the state. We are one of the few states with a net population dreain.

        1. Washington State is not far behind Connecticut then. First significant downturn in the Tech sector will be devastating. This state is about to lose this very experience and effective senior care manager. Seniors live in every state. Why should I come to work here only to be treated like a criminal by the State surveyors who don’t follow federal guidelines or state law then be ignored by our elected officials at the State capital when asking for nearly adequate Medicaid funding. Life is too short. Something I understand all too well after 35 years in the business. I’ll tick Connecticut and and Illinois off my list. How are things in South Carolina? I have family there.

    2. And human nature being what it is, no one thinks about needing nursing home care until the discharge planner comes to their hospital bed and asks them to choose the nursing home they will be discharged to later that day.

  3. We are in a very similar situation here in Utah. The rates differences between surrounding states like Idaho are staggering. The only consolation is that we applied and got into the UPL program that makes up for the low Medicaid rate. Idaho has both though, so it’s significantly better still.

    1. I have never been a fan of the UPL programs because they are a fake fix. I understand how it helps the providers, but the federal and state governments need to get together and figure out Medicaid once and for all and not do makeshift fixes.

  4. I agree about UPL, but until they do, it is the only thing that keeps providers in business. Facilities have become so dependent on UPL that if it were to change, many would go under very quickly. It also hurts when trying to get financing because lenders don’t like UPL either and discount a vast majority of it so you still have to find a way to be profitable without it. That typically leads to understaffing just to reach required benchmarks.

    1. Darin, I hear you, and it is just a shame that we have gotten to this point. Something has to give. But if there is a major care disaster somewhere, and low staffing is blamed, or not properly trained staff, the legislators will still yell and scream at the providers, and it will be even harder to get the necessary funding.

  5. I lived for several years in Singapore. All employees had $0.12 for each dollar of pay set aside and a match was made by the employer so another $0.12 was set aside. The magic was that the money went into a trust account that belonged to the employee. Only the employee could spend it. And they could only spend it on major medical or long term care. They have no problems with unfunded health care costs or retirement costs. Which politician will have the guts to set this up here?

    Doug Fullaway

    1. You are right. The problem is that politicians here do not like to give up control of the money, and they do not want the people to take control of their own lives.

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