Editorial: We can pay a little now for care we’ll need later

By The Herald Editorial Board

With their first paycheck of the year, most workers in Washington state have — or they will soon — notice a modest deduction listed on their pay stubs, for themselves and their employers.

The deduction — 0.4 percent of gross pay — is going toward a state-managed fund that starting next year will allow participants to take family leave for the birth of a child or their or a family member’s illness and receive a weekly benefit while they are away from work.

For example, a worker making $50,000 a year will pay about $2.44 a week, joined by a $1.41 contribution from their employer. Starting in 2020, that worker needing time off would receive about $778 a week while on leave, for up to 12 weeks.

The intent of the Paid Family and Medical Leave law, which the Legislature passed in 2017, is to allow workers to take the time they need for the health of themselves and their families without burdening themselves financially. There’s an added benefit to employers in being able to retain valued employees, who might otherwise quit. And it’s a model — basically an insurance pool — whose benefits are paid by employees and the companies they work for, rather than the taxpayers.

A similar program should now be established for ourselves for the in-home, nursing home or other care most of us will need in our senior years.

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, 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 is called upon to 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 in Washington state are providing unpaid care to a family member.

Considered previously by state lawmakers and sought by Washingtonians for a Responsible Future, legislation to establish the Long-Term Care Trust Act would set up a state-managed account that most employees — though not employers this time — would pay into from each paycheck.

As proposed, a 0.58 percent deduction from each employee’s gross pay would go into the state trust fund, which would pay over the course of the benefit for a year’s worth of long-term care services. To begin with, the lifetime benefit would equal about $100 a day, or $36,500.

A worker making $50,000 would pay about $5.58 a week into the trust fund. Self-employed workers could opt in to the program.

One big plus of the program: Family caregivers would be eligible to receive payment for the services they provide to loved ones.

The program would also address a looming funding crisis for the state.

The state, which is currently paying $2.1 billion each year for Medicaid-funded long-term care, can expect to see that cost nearly double to more than $4 billion by 2040 as the state’s elderly population increases. In its first year, the Long Term Care Trust Act would reduce the state’s Medicare costs by $19 million. At the peak of the wave of boomers needing long-term care in 2050, the trust act is estimated to save the state $440 million every year.

Syndicated columnist Froma Harrop, whose columns often appear in The Herald, recently wrote of the help she has been providing a friend. While “pushing 90,” he lives on his own and can still manage most of his daily care. But what started as running him to doctors’ appointments and pharmacies, now includes trips to a cancer center for chemotherapy, help managing his prescriptions and additional care because of the cancer treatments’ side effects.

Harrop’s friend has no family near his Providence, Rhode Island, home, and his close friends have died, with the exception of Harrop.

“I have no legal obligation to do this,” she wrote. “I took on providing this elder care because my friend is a great old guy. But also — to be very honest — because I had no idea what I was getting into.”

Many of us will know elderly neighbors in a similar situation. The lucky ones will have family who can help provide care, but at a cost to their own financial security.

The Long-Term Care Trust Act, in return for a few dollars out of our paychecks, can help provide much of the care most of us will need in coming years.