By The Herald Editorial Board
One measure that voters should make certain they do not overlook on their ballots is a proposed amendment to the state constitution, Engrossed Senate Joint Resolution No. 8212.
A yes vote will ensure that money in a newly created trust fund for long-term care for seniors is invested wisely by the Washington State Investment Board — and not left to collect only minimal returns — so that necessary care is ensured.
The Legislature in 2019 passed House Bill 1087, which will use a modest payroll deduction to support the Long Term Care Trust Fund, addressing a growing crisis that threatens the health and financial well-being of seniors and their families.
About 7 in 10 Americans, 65 and older, will need long-term care services during their lives. The median retirement savings for seniors is about $136,000, but those over the age of 65 can expect average costs of $260,000 over the course of their lives for care services. Very few people carry insurance to provide that care — it can be hard to find and expensive when available — and Medicare doesn’t pay for most care services; that is until that person has depleted their savings to the poverty level.
For many, a family member must provide in-home care, but that can mean leaving a job and minimizing or eating into their own savings for retirement. Currently, about 850,000 people in Washington state are providing unpaid care for a family member.
Beginning in January 2022, a 0.58 percent deduction from each employee’s gross pay will go into the long-term care trust fund. A worker making $50,000 a year would pay about $5.58 a week into the trust fund. Self-employed workers will be able to opt in to the program. Those contributing to the fund would be eligible, beginning in 2025, for up to a year’s worth of long-term care services later in life. To begin with, the lifetime benefit would equal about $100 a day, or $36,500.
A plus of the program: Family caregivers would be eligible to receive payment for the care they provide to loved ones.
Approval of 8212, which had nearly unanimous support in both the House and Senate this year, will ensure that the money in that fund is invested carefully but can earn returns that support the program and avoid either an increase in the payroll deduction or a cut in benefits.
The state’s constitution allows for investment of such public funds that offer returns of only about 2 percent currently. But past constitutional amendments have allowed for the state’s public employees pension fund, its workers’ compensation fund and others to be managed by the state investment board in stocks, bonds and other funds that can provide better returns on investment.
Sen. Christine Rolfes, D-Bainbridge Island, and Sen. John Braun, R-Centralia, the leaders for their parties on the Senate’s Ways and Means committee, have written in support of the amendment, noting that the state investment board has achieved an average annual investment return of 8.8 percent, during bear and bull markets, above the 5.3 percent return that was assumed for the long-term care fund during its consideration and far above the 2 percent return likely if the amendment is not adopted.
“At 6.4 percent returns, the fund would grow $5 billion more over 20 years and $9 billion more over 30 years than at the 5.3 percent assumed (and presently unachievable) rate,” their letter states.
Along with the support of the Legislature, 8212 also is endorsed by AARP Washington, the Washington State Senior Citizens’ Lobby and the League of Women Voters for Washington State, among others.
The Long Term Care Act is the first in the nation to offer such a state-operated insurance program, and it can make a significant difference for seniors and families who will need this assistance to provide necessary care at home or at care facilities. Allowing the State Investment Board to oversee its fund, as it does other public funds, will ensure its viability in its early years and far into the future.
Vote “Approved” on 8212.
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