WA Cares tax (Bellevue: broker, exemption, costs)

[PhoenixSomeday]

Originally Posted by PS90

4) The reason that it was delayed from last year is because the LTC insurance exception was a complete clusterf%&k. The only way to get an exception to WA Cares was to obtain LTC insurance, but as soon as the insurance companies heard about WA Cares, they immediately ceased taking any new applicants for their policies. The insurance companies didn't want to get screwed by people applying for LTC and then immediately canceling, just to get an exception for WA Cares. I don't know, but I doubt, that this has been resolved.

It would have been extremely easy to account for people applying for private LTC, getting the exemption, and dropping the LTC. Like, painfully, mind numbingly easy. That was either very poor foresight, or simply stupidity.

[CalWorth]

[quote=PS90;65301258]

Originally Posted by leastprime

And sounds like all 3 of you have had your insurance for quite a while. That's great and insightful of you all, but the rest of us with less foresight have no choice but to pay into this dumpster fire of a law.

I'm not one of posters talking about having my own LTC insurance. I am pointing out that many people do not have this insurance for a variety of reasons, usually cost. The WA cares tax helps people who do not have LTC insurance. LTC is insanely expensive, a huge for-profit business that makes commodities of human beings.

[509]

[quote=PS90;65301258]

Originally Posted by leastprime

And sounds like all 3 of you have had your insurance for quite a while. That's great and insightful of you all, but the rest of us with less foresight have no choice but to pay into this dumpster fire of a law.

[quote=CalWorth;65301611]

Originally Posted by PS90

I'm not one of posters talking about having my own LTC insurance. I am pointing out that many people do not have this insurance for a variety of reasons, usually cost. The WA cares tax helps people who do not have LTC insurance. LTC is insanely expensive, a huge for-profit business that makes commodities of human beings.

LTC does NOT make financial sense from a business point of view.

The premiums have to be HUGE, to cover the cost. That ends up with the government picking up the cost and proposing programs like what we have in Washington state.

I looked at the financial aspects of LTC insurance when I retired about 20 years ago. It didn't make sense as a business proposition for companies, and it didn't make sense from the consumer point of view.

Which means government covers the cost. Which they "refused" to do, by passing this tax. It doesn't solve anything, just postpones the cost for a brief period of time.

It was roll the dice with LTC.

After you lost all your assets, the government stepped in and your kids got NOTHING. If they wanted the inheritance, they should have taken care of you instead of the government.

No easy solution. Suck it up and start dealing with reality. Which is something we refuse to do as a society this days.

[Hemlock140]

Originally Posted by PhoenixSomeday

It would have been extremely easy to account for people applying for private LTC, getting the exemption, and dropping the LTC. Like, painfully, mind numbingly easy. That was either very poor foresight, or simply stupidity.

No, it was just not possible. The LTC providers thought of that at the time, and stopped writing new policies. You could not get private LTC after WC Cares was announced.

[PS90]

Originally Posted by Hemlock140

No, it was just not possible. The LTC providers thought of that at the time, and stopped writing new policies. You could not get private LTC after WC Cares was announced.

Yes. This.

It doesn't matter to us, as the citizens of the state, how easy or how hard that would be to track for the insurance companies - they stopped giving policies, and there's nothing we can do about it.

[texasdiver]

Originally Posted by Hemlock140

No, it was just not possible. The LTC providers thought of that at the time, and stopped writing new policies. You could not get private LTC after WC Cares was announced.

Not true. I got a policy for me and my wife after WA Cares was announced. The policies were no longer as cheap or comprehensive as the older ones that, for example, my parents bought a decade ago. So barely worth buying on their own merits but worth it to avoid the tax.

What happened is that there are only a few companies that actually write such policies and they got overwhelmed with the demand and had to stop taking new policies. This was also happening a time of ultra low interest rates and so highly regulated companies like insurance companies had less profitable places to safely invest premium dollars from new policies. Low interest rates are not great for insurance companies that earn profits through investments. And that is basically what insurance companies do. They invest your premiums and hope to make more money than they will eventually have to pay back in benefits.

But there will always be a market for such policies. The companies will just continue to adjust the premiums and benefits so that they are actuarially sound and they make money on them since that is whey they are in business. And so they will get crappier and crappier and more and more expensive from the point of view of the consumer.

[PS90]

Originally Posted by texasdiver

Not true. I got a policy for me and my wife after WA Cares was announced. The policies were no longer as cheap or comprehensive as the older ones that, for example, my parents bought a decade ago. So barely worth buying on their own merits but worth it to avoid the tax.

What happened is that there are only a few companies that actually write such policies and they got overwhelmed with the demand and had to stop taking new policies. This was also happening a time of ultra low interest rates and so highly regulated companies like insurance companies had less profitable places to safely invest premium dollars from new policies. Low interest rates are not great for insurance companies that earn profits through investments. And that is basically what insurance companies do. They invest your premiums and hope to make more money than they will eventually have to pay back in benefits.

But there will always be a market for such policies. The companies will just continue to adjust the premiums and benefits so that they are actuarially sound and they make money on them since that is whey they are in business. And so they will get crappier and crappier and more and more expensive from the point of view of the consumer.

YMMV, I guess. It was explained to me last year by a Certified Financial Planner, and I understood it to be the same as what Hemlock is saying. Maybe you got in super early, or got in through an exception?

[Hemlock140]

As of August 31st of 2021 the insurers were overwhelmed and worried about people cancelling after exemption, so most stopped writing policies, eventually all of them did. I found this article which is from 3 months prior to the deadline to file for exemption. It was the announcement that caused the panic and flurry of requests to get private policies.

https://crosscut.com/politics/2021/0...care-insurance

[Arcos]

Originally Posted by PS90

YMMV, I guess. It was explained to me last year by a Certified Financial Planner, and I understood it to be the same as what Hemlock is saying. Maybe you got in super early, or got in through an exception?

I got a policy in the last few days before the deadline. I think I found out where to get it on this forum, actually, though the link was very quickly deleted by a mod.

[Pomelo]

Originally Posted by PhoenixSomeday

It would have been extremely easy to account for people applying for private LTC, getting the exemption, and dropping the LTC. Like, painfully, mind numbingly easy. That was either very poor foresight, or simply stupidity.

The only reason the opt out would have been inserted into the law is if the politicians wanted to give a way out to those “in the know” from paying the tax.

But they bet wrong, and news about it blew up, so they delayed it, figuring it would blow over, and they were right on that count.

Now, Washington state will have a group of people who pay less tax than others simply because they had an LTC policy on an arbitrary date.

It should have already been struck down as an unconstitutional marginal income tax in disguise anyway due to the lack of cap on income subject to the tax in conjunction with the cap on benefits.