This one is over a tax floated by the Department of Social and Health Services as an alternative to some of the deep cuts the state’s largest agency has proposed.
The Legislature could choose to charge a public utility tax to agencies that take care of the elderly and disabled in their homes and at boarding homes and adult-family homes. Agencies would pay 5 percent of their gross receipts, and the state would use the new revenue to draw more federal money, which would go back to the providers in the form of higher Medicaid rates.
It’s described as a “public utility assessment,” and it has the same goal of so-called assessments the Legislature has set on hospitals and nursing homes – offsetting budget cuts while pulling in federal funds for those businesses.
This is different, though, in that public utility taxes are usually paid by suppliers of energy, water and communications or transportation services, not long-term care. DSHS officials don’t know of similar funding schemes in other states.
“The cuts to long-term care are so dire, if they can find a way to draw down some additional federal funding that protects those services, more power to them, even if it is a little weird,” said Adam Glickman-Flora of Service Employees International Union local 775. SEIU represents in-home care workers and has pushed for similar measures in the past.
The reimbursements would presumably cover the costs of agencies that have many low-income Medicaid patients. The controversy will come over its effects on homes and agencies that serve only or mainly residents who can afford to pay out of their own pocket. Higher Medicaid rates wouldn’t help them.
That’s one reason the Washington State Residential Care Council of Adult Family Homes opposes such proposals. The homes operate on razor-thin profit margins, said Cindi Laws, executive director of the group.
“It would shut down a third of adult family homes in the first year, and it could possibly shut down two-thirds of them by year two,” Laws said.
She pointed to recent license-fee increases and insurance requirements added by the Legislature. “They keep putting on these added costs, and all it does is drive up the cost of long-term care for everyone,” Laws said.
The proposal would raise $65 million for the state, DSHS says, offsetting potential cuts to services for 7,800 people.
