FILE – Washington care home

Flowers left next to the sign that marks the entrance to the parking lot of the Life Care Center in Kirkland, Washington are shown Monday, March 9, 2020, near Seattle. The nursing home is at the center of the outbreak of the COVID-19 coronavirus in Washington state. 

(The Center Square) – Insurance companies have temporarily put a halt to selling long-term care policies in Washington ahead of the deadline for residents to opt out of a new state-run program.

Washingtonians have until Nov. 1 to obtain a private policy in order to be exempt from the WA Cares Fund, as it is known, and the accompanying tax. 

Beginning in January of 2022, employees will pay 58 cents per $100 in earnings each year. For example, that’s about $435 for someone making $75,000 per year.

Starting in 2025, eligible workers can receive up to $36,500 in long-term care benefits. 

While private long-term care policies would cost thousands of more dollars than the payroll tax, they also offer significantly higher benefits.

According to the Washington State Employment Security Department, it is expected that as many as 310,000 people could apply for the exemption.

The Washington Office of Insurance Commissioner says there currently are 10 companies licensed to sell stand-along long-term care insurance policies in the state and another 22 that can sell long-term care riders on life insurance policies.

The OIC has said one company, whose name it did not reveal, has received 66,000 applications for long-term care policies. That same company sold 8,000 such policies in Washington during 2020.

The American Association for Long-Term Care Insurance says about 48,000 such policies are sold nationwide in an average year.

“People just can’t get a policy, so there is understandably a lot of frustration there,” Steve Valandra, an OIC spokesperson, told the University of Washington’s NPR affiliate.

Valandra also added that he’s never seen companies suspend an entire line of insurance products.

The OIC said it logged 1,200 consumer complaint calls in August and saw a 300 percent increase in consumer online chats.

The two most visited pages on the OIC website, “What qualifies as long-term care insurance?” and “Long-term care insurance companies approved to sell in Washington state,” are averaging some 10,000 views per day.

To be eligible for the state-run program, a resident must have been working at least 500 hours per year and contributing to the fund at least three of the previous six years.

People must also need assistance with at least three activities of daily life, such as eating, bathing, dressing and medication management.

An actuarial report indicates the program would be fully funded through 2075 if investment returns stay the same. That would dip to 71 percent funded in 2076 but climb to 85 percent funded by 2096.

Washington’s constitution only allows the state to invest in fixed-income portfolios, generally more conservative with lower interest rates.

Voters in November 2020 rejected a resolution that would have allowed the state to invest in private stocks by a 53-47 margin.