Your Money
By RON LIEBER MARCH 9, 2018
By RON LIEBER MARCH 9, 2018
OLYMPIA, Wash. — For a few weeks this year, the rarest of
things seemed like it was about to occur. A state, in this case Washington, was
working to pass a bill that would institute a new payroll tax to help cover the
cost of a much-needed service: long-term care in a nursing home, in a personal
residence or elsewhere in the local community.
Rarer still: At least a couple of Republicans, including one
of the bill’s primary sponsors, supported the tax proposal.
Eligible adults were to receive $100 a day from the revenue
raised by the tax, for up to 365 days — not typically enough to pay the full
cost of nursing home care but potentially helpful in keeping less affluent
older people from obliterating their savings and ending up on Medicaid.
Alas, it was not meant to be. As the need to finalize the
legislation approached, AARP, citing various unanswered questions, came out
against it. Many of the questions involved who would qualify as a caregiver and
could receive the $100 per day. Which just goes to show that no matter how
great the desire to help America’s aging population, figuring out exactly who
should get what and under what circumstances is an enormously complicated
issue.
We have a big problem paying for long-term care in this
country, although most people don’t wake up to the challenge until it affects
their family directly. One in three people who live until at least 65 will
reside in a nursing home at some point, according to the Kaiser Family
Foundation. Once they settle in, most will be short on money. Medicaid covers
at least part of the bill for 62 percent of people who live in a nursing home.
Given that states help pay for Medicaid, legislators are
increasingly worried about the growing number of older residents, many of whom
don’t even have enough money saved for a comfortable retirement, let alone
nursing home bills that can sometimes top $100,000 per year.
A coalition of groups in Washington State saw the
generational tidal wave crashing, and they got the ear of two state
representatives in particular. The mother-in-law of one, Laurie Jinkins, a
Democrat, is 92, has dementia and just qualified for Medicaid.
The father of the other, Norm Johnson, a Republican, used up
much of his savings paying for in-home aides for Mr. Johnson’s mother. The
elder Mr. Johnson spent so much on care for his wife that by the time he
required care of his own, he, too, wound up on Medicaid.
So Ms. Jinkins and Mr. Johnson sponsored a bill calling for
a payroll tax on state residents of 0.49 percent, or $22.30 a month on average.
(Washington has no state income tax but does have a statewide sales tax.)
People who paid into the system over a certain number of years would ultimately
become eligible to access the $100-per-day benefit if they could not complete
three or more activities of daily living, like dressing or bathing.
They could then take that $100 and put it toward in-home
care, adult day care, nursing home fees or similar expenses. After 365 days,
they would exhaust the benefit. At that point, Medicaid would still be an
option.
Why would a member of the typically tax-averse Republican
Party support such a measure? After all, people are supposed to save for their
old age, and they can buy long-term care insurance to protect themselves, too.
Mr. Johnson, a former teacher, school counselor and
principal, drew on his own life to answer the question.
“We had five sons in my family,” he said. “There is no way
we could afford long-term care insurance and raising five kids and paying for a
house and school.”
He knows that younger adults might resent the idea of
elected officials reaching deeper into citizens’ pockets to pay for benefits
that are probably decades away for them. But he said that his experience hd
afforded him some perspective.
“You never think you’re going to get old,” he said. “But
guess what? I didn’t think that either when I had kids at home, and now I will
be 80 in July.”
The way Ms. Jinkins and Mr. Johnson tell it, AARP was
supportive until suddenly it was not. “The two people who represent AARP here,
neither one had darkened my door,” Mr. Johnson said. “And then the last day, they
threw a wrench into things.”
When I contacted AARP, I was told that the group had a
number of concerns with the bill and had been expressing them all along.
Perhaps the thorniest one involved the question of who qualified as a caregiver
and how he or she would become eligible to collect to benefit.
Eligibility is not in dispute in licensed adult day care
centers or nursing homes. But many people prefer to stay in their own homes as
long as they can, and in some parts of Washington there are not enough licensed
in-home caregivers. That means family members pitch in, often sacrificing their
own wages to do so.
Everyone in the coalition that supported the bill wanted the
people who need care to be able to use the $100-a-day benefit to pay relatives.
But not everyone is qualified to provide care, especially if doing so requires
lifting a person or treating certain conditions.
Would a spouse have to take a 75-hour class at a cost of
hundreds of dollars to qualify as a caregiver? If so, was that too much to ask?
How best to train a novice? Could family members train for, say, only 15 hours
just to learn the specific skills they needed to help a relative? And if
in-person training was required, who would care for an ailing spouse in the
meantime?
“The bill needed too much work, and we had too many
questions and not enough answers,” said Cathy MacCaul, AARP’s advocacy director
in Washington.
Without those answers, AARP would not support the bill as
written. And without its support, and with emails arriving from AARP members
encouraging “no” votes, lawmakers chose not to move the bill to a full vote.
The State Legislature met in a short session this year. Next
year, its session will be longer, allowing more time for negotiation. All sides
vow to redouble their efforts in the meantime. But the episode is a reminder of
just how slowly new financial benefits creep across the country, hopping from
state to state as new legislation is passed.
Hawaii offers some help to certain caregivers, but the
Washington bill would establish the first payroll tax where the proceeds go to
long-term care more broadly. It could be the difference between some families
spending nearly all of their money and ending up on Medicaid or having
something left after an older person’s death.
But precisely because it would affect so many people, it’s
not going to happen very quickly. “Could we all have dropped everything in our
lives and answered all these questions sooner?” asked Doug Shadel, AARP’s state
director in Washington. “Maybe. But we’re inventing a new social system to fix
a difficult social problem.”
He also offered an olive branch of sorts.
“These two legislators, I know they are frustrated, but I
think they showed a lot of courage putting this forward as a bipartisan
effort,” he said. “I think they’re going to be seen as pioneers going forward.”
