Abbarno seeks repeal of Democrats’ new long-term care insurance program and payroll tax

Rep. Peter Abbarno said today he plans to introduce a bill for the 2022 legislative session that would repeal the Democrats' new long-term care insurance program and payroll tax. In drafting the legislation, Abbarno says the new state program provides false hopes and forces some to pay who will never receive a benefit.

“The maximum lifetime benefit of $36,500 is available only for care provided in the state of Washington for Washington residents and is not transferable. If you plan to retire in sunny Arizona or Florida, you will lose your entire contribution into the system. Military families who work in Washington will pay the tax, but will receive no benefit if they are transferred out of state. Spouses will never realize their community share of the benefit upon retirement. And those people who live out of state but work in Washington will pay the tax, but are ineligible under the current rules to get the benefit,” said Abbarno, R-Centralia. 

“If you plan to retire within the next 10 years, you will not receive a benefit for your contribution because you must work 500 hours per year for 10 years to be vested,” he continued. “Therefore, if you retire in nine-and-a-half years, you will lose your entire contribution. None of this is fair.”

The new system was created initially by the passage of House Bill 1087 on April 23, 2019. Beginning Jan. 1, 2022, Washington workers will pay up to $0.58 per $100 of earnings for the program. For someone making $50,000 a year, that's $290 annually. Beginning Jan. 1, 2025, each Washington worker eligible to receive the benefit can access services and supports costing up to $36,500.

“This is a regressive payroll tax that gives working families the illusion that their long-term care needs are satisfied with this 'short-term' limited care program. The reality is that private investments provide greater benefits with greater flexibility in long-term care,” added Abbarno. “Encouraging people to explore the benefits of long-term care insurance is a good idea. Forcing workers into a new program and payroll tax is a bad idea.”

Today, Nov. 1, is the deadline for Washington workers to secure a qualified, private long-term care insurance policy. Once a policy is secured, workers can apply for an exemption.

“Unfortunately, many people were unaware of this new program until it was too late to get out of it. By September, all insurance companies in Washington stopped selling long-term care insurance because they were overwhelmed with applications and also concerned people would likely cancel as soon as they were exempt from the payroll tax. So you can't get private long-term care insurance until after today's deadline,” Abbarno noted. “Plus, we're being told right out of the gate this program will not be able to pay for itself from the new taxes collected. That means people stuck in this program will either eventually be forced to pay higher taxes or have their benefits reduced.”

Abbarno joined Rep. Joe Schmick, ranking Republican on the House Health Care and Wellness Committee, to draft legislation addressing the deficiencies in the program, including legislation that would make it and the payroll tax opt-in only, as well as ensuring those who pay into the program are guaranteed a benefit, regardless of whether they live in or move out of the state of Washington. Ultimately, the 20th District lawmaker questions the solvency and constitutionality of the unpopular tax and fund.

“Nearly 63 percent of voters said last year during an advisory vote this program should be repealed. We can try to fix it, but it has so many flaws that it really needs to go away. The real solution is to follow the will and vote of the people by repealing the payroll tax program and address long-term care by incentivizing investments, not punishing and marginalizing working families,” Abbarno concluded. “The state needs to hit the reset button on this tax and program.”

The 2021 legislative session begins Jan. 10 and will last 60 days.

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Washington State House Republican Communications
houserepublicans.wa.gov