“Jumpstarting the Debate Over Public Long-Term Care Insurance”

“Jumpstarting the Debate Over Public Long-Term Care Insurance,” by Howard Gleckman, Forbes

Quote:

“Rep Tom Suozzi (D-NY) has introduced a bill to create a public, catastrophic, long-term care insurance program [the WISH ACT]. The monthly cash benefit, initially about $3,600 and indexed for inflation, would be funded with a modest increase in the payroll tax of 0.3 percent for workers and 0.3 percent for employers, or roughly $300-a-year for a median wage worker. The payroll tax revenue would be paid into a trust fund, separate from the federal general fund. Importantly, trustees would be allowed to invest contributions in “conservative” marketable securities. The basic framework of a public catastrophic long-term care program was described in 2016 by the Long-Term Care Financing Collaborative. The income-based waiting period was an innovation developed by researchers Marc Cohen, Judy Feder, and my Urban Institute colleague Melissa Favreault. … Because WISH would be fully funded through the payroll tax, it would not add to the growing US debt. But that feature also is its biggest political challenge: overcoming resistance to its tax increase.”

 

LTC Comment, Stephen A. Moses, President, Center for Long-Term Care Reform:

Oh my. This is such a terrible idea that it deserves a full rebuttal that I don’t have time to give it right now. If the WISH Act were to get any traction, which I doubt, I’ll critique it then. For now, I’ll share just a few points: All we need is a new “trust fund” for the federal government to rob as it has done to the ones for Social Security and Medicare already. Even suggesting another trust fund insults every taxpayer’s intelligence. Fully funded by a payroll tax? Like Social Security and Medicare, which were fully funded, but now have $54 trillion in unfunded liabilities? This new WISH Act is exactly the kind of compulsory, payroll funded, entitlement program we’ve critiqued in 100 LTC Bullets over the years: find them here–LTC Bullet: LTC Center Standing Guard. In the meantime, see “LTC financing: Be careful what you WISH for.”