“Vote ‘Yes’ to strengthen WA Cares Fund for elder, long-term care | Editorial,” by Editorial Board, Tri-City Herald
“Last year, voters affirmed their support for WA Cares, the state’s long-term care program for seniors and people with disabilities. This year, they can make sure that the WA Cares is on a strong financial footing by voting for Senate Joint Resolution 8201. WA Cares is still relatively new. Signed into law in 2019, it only started collecting money through a payroll deduction in 2023. That money sits in the WA Cares Fund, which will provide financial assistance to qualified Washingtonians as they get older. The fund currently has more than $2 billion. The problem is that the state constitution says that public funds like this may be invested only in the safest holdings like fixed-income bonds and certificates of deposit. With that restriction, projected long-term growth is only 4%. That growth rate probably will not keep up with inflation in the highly volatile health care and senior care sectors. The solution is to change the constitution. SJR 8201 would allow the independent, nonpartisan Washington State Investment Board, which oversees state funds, to put some money into stocks and other equities. Those tend to have higher rates of return.”
LTC Comment, Stephen A. Moses, President, Center for Long-Term Care Reform:
Whatever you may think about the wisdom of WA Cares, how do you feel about investing taxpayers’ dollars in the stock market at all-time highs? Or in bonds with interest rates and inflation growing out of control? So like government to “pick winners” right before they become losers. Here’s the irony. Morgan Stanley recently updated its investment strategy, recommending a 60/20/20 portfolio instead of the traditional guideline: 60% stocks/40% bonds. In this new allocation, 60% is in stocks, 20% in bonds, and 20% in gold. In other words, bonds are out of favor; gold is the new safe haven. But something tells me the powers-that-be in the Evergreen State won’t seek permission to protect WA Care’s funds with a shiny metal, that if Morgan Stanley is right, may be the only way for private investors to protect their portfolios from a potential market collapse.