The legislature finds that:
In 2019, the legislature enacted the long-term services and supports trust program, which authorized a fifty-eight hundredths of one percent premium on employee wages beginning in January 2022 to pay for long-term care benefits for qualified individuals beginning in 2025. This tax will be paid by all employees who work in Washington, excluding individuals who have purchased a private long-term care insurance policy and received an exemption, regardless if they will retire before qualifying for the program or reside out of Washington currently or in the future and not be able to use the benefits of a program they paid into.
The maximum benefits that a person may receive under the long-term services and supports trust program is $36,500 which will be wholly inadequate to meet the needs of most people needing care under the program. This will lead many people to think all their long-term care needs will be paid for under the program and not plan for costs beyond the maximum $36,500 benefit.
In 2019, Washington voters recommended the repeal of House Bill 1087 in an advisory question by a resounding vote of over 62 percent.
The state's Constitution only permits treasury investments which typically yield returns between two and three percent. Due to the fact that the solvency of the program was based on an actuarial model that assumed over five percent investment returns, in 2020, the legislature passed a constitutional amendment that would have allowed investment of the program's funds in vehicles besides treasuries, including stocks and bonds. This amendment was rejected by voters and now the investment returns that the program is based on are unattainable under current law and the program has an unfunded liability projected at $15,000,000,000 in net present value. Benefit cuts or further premium increases will be necessary to address the program's solvency.
The most tangible benefit of the experiment with the long-term services and supports trust program has been the conversation that it has prompted among Washingtonians about the best way to finance long-term care needs. In response, an increased number of Washingtonians have purchased long-term care insurance policies and others are considering alternative ways to meet their anticipated long-term care needs. For those without the resources to save for their needs, it is unfair to burden them with financing a potential future benefit or give them the false impression all their long-term care needs will be met through this program when they are struggling with meeting the needs of today. Some Washingtonians, however, are prepared to assume responsibility for planning their future care and will need their funds to invest in long-term services. For these reasons, the long-term services and supports trust program must be repealed and a new discussion must occur about incentivizing and supporting Washingtonians in responsibly planning for their long-term care needs.