Columnist Norris Cunnigham discusses infection control penalties.

Q: What is Washington’s payroll tax for long-term care going to mean for the state’s Medicaid program and are other states expected to follow?

A: The nation’s first long-term care payroll tax was set to begin July 1, 2023, after it survived several challenges by state legislators, a class action lawsuit, and countless questions over its solvency, efficacy and fairness. 

The tax, which goes to the WA Cares Fund, will take 58 cents on every $100 a worker earns — unless they have private long-term care insurance – to fund the first-in-the-nation public long-term care insurance program. Those paying the tax will receive a lifetime benefit up to $36,500 for help with long-term care services such as in-home care, transportation or nursing home services. 

Proponents of the tax claim that it will positively impact Medicaid spending and they expect it will save the state $18.7 billion in Medicaid payments between now and the end of this century. As the stress on state Medicaid programs continues to grow, this program and similar ones could alleviate Medicaid worries in many states.

To date, 13 other states (Alaska, California, Colorado, Hawaii, Illinois, Michigan, Minnesota, Missouri, New York, North Carolina, Oregon, Pennsylvania and Utah) are considering or have introduced similar legislation to tax those without LTC insurance. California has created a task force to recommend options in that state.

Simply put, similar LTC tax legislation thoughout the country seems inevitable. 

While there is cause for optimism around programs like the WA Cares Fund, there should be concern that these lifetime benefits will become justification for proportional cuts to state Medicaid spending on long-term care services. That would further endanger an industry already grappling with multiple and complex existential issues.

Norris Cunningham, Esq., is a member of Stoll Keenon Ogden, PLLC. Please send your legal questions to Norris at [email protected].