Task force proposes health insurance pool
18 01 08 - 11:47
Friday, January 18, 2008
BY KATHIE DURBIN, Columbian staff writer
OLYMPIA - What if workers could buy health insurance from an insurance pool funded in part by their employers but tailored to their specific needs?
That's one idea to emerge from the Washington State Blue Ribbon Commission on Health Care Costs and Access, which released a five-year plan this month.
The proposal to create a pool of state, federal and private insurance funds available to all Washington residents could address one of the biggest holes in the state's health care safety net - the inability of some small businesses to afford health coverage for their employees.
The bipartisan task force, chaired by Gov. Chris Gregoire and former State Sen. Pat Thibaudeau, met from June to November 2005. Through a process of consensus, its members came up with the concept of some kind of insurance pool and 15 other recommendations for controlling health care costs and improving access.
Their proposal for an insurance pool, known as an "exchange" or "connector" in insurance jargon, is short on specifics. But it would combine employers' contributions and workers' premiums with a state subsidy to buy insurance coverage that neither employees nor their employers could afford on their own.
Republican legislative leaders pushed hard in the 2006 session for a bill that would give small business owners more affordable health insurance options for small business owners.
House Republican leader Richard DeBoldt, R-Chehalis, says the state eliminated options for affordable health insurance when it created the Basic Health Plan for the poor and mandated sweeping requirements for private health insurance policies. Many insurance carriers left Washington because they could not meet the state's coverage mandates, he said.
"Ten years ago we had 20 health insurance carriers," DeBoldt said. "Now we have three."
More options elsewhere
Other states give employers and individuals more insurance options, said state Sen. Joe Zarelli, R-Ridgefield.
"My daughter and her husband can buy an individual policy for $300 a month in Oregon, but that policy is not available here," he remarked at the Senate Ways and Means Committee hearing.
What's needed, Zarelli said, is "a private market plan that provides a choice for the consumer so they have at least catastrophic insurance. If we had that, employers wouldn't have to provide health insurance."
State Sen. Cheryl Pflug, R-Hobart, served on the task force and is enthusiastic about the idea of establishing a health insurance exchange. A background paper she distributed last week says the exchange "would act as a virtual stock market for health insurance in Washington, with insurance companies of all sizes competing for one of the largest consumer consortiums in the country."
Pflug and other task force members are working with the governor to draft a bill that would address the insurance pool idea and other recommendations.
Under one scenario, an employee could use pre-tax income to pay for extra coverage beyond the bare-bones policy available through his or her employer. Policies would be portable, following workers when they change jobs. Even part-time workers could buy into the system.
The concept isn't as flashy as California Gov. Arnold Schwarzenegger's plan to guarantee universal health insurance. His proposal, now being considered by the California Legislature, rests on requiring every California resident to buy health insurance. Those who could not afford it would be subsidized by a state-run pool funded with state and federal dollars, taxes on the revenue of doctors and hospitals, and a 4 percent payroll tax on employers of 10 or more who don't provide insurance to their workers.
The Oregon Legislature is considering a health care reform plan developed by former Gov. John Kitzhaber that would pool state and federal dollars and use them more efficiently to provide health care to the uninsured.
All these plans face one significant hurdle. In order to include federal Medicaid funds in the pool, the states would have to win federal waivers. And that would require each state to convince the federal Centers for Medicare and Medicaid that it has a credible plan to contain health care costs, reduce the number of uninsured citizens, and improve the efficiency of health care delivery.
Not coincidentally, those are among the goals of the Washington task force as well.
Bill being prepared
Gregoire is preparing an omnibus bill dealing with health costs and access. It is to be introduced later in this legislative session.
Because her budget was written before the task force delivered its report, it "was not explicitly intended to carry out the recommendations of this report," Jonathan Seib, a health policy adviser to the governor, told the Senate Ways and Means Committee recently.
Yet some of its spending recommendations dovetail with those of the task force, Seib said. Those include:
$30.8 million in state funds to extend health care coverage to 32,000 more low-income children. The governor's goal is to make sure every Washington child has health insurance by 2010.
$8 million to launch a pilot project creating a computerized medical records bank.
$5 million to continue a pilot program that helps subsidize health insurance premiums for small business owners.
$2 million to expand statewide a regional health alliance that is working to improve quality and efficiency of health care delivery in the Puget Sound area.
Education reform is Gregoire's top priority and the Legislature's as well.
But Pflug said she's not worried that health care reform will be vying with school reform for legislators' time and attention.
"We need a significant bill this year," she said. "I'm confident we can come up with some strong initiatives."
Did you know?
Nearly 750,000 Washington residents are employed by businesses with 50 or fewer workers. Fewer than half those workers have health coverage.
More than half of young adults ages 19-34 in Washington are uninsured.
Sufferers of chronic illnesses such as diabetes and heart disease make up 5 percent of the population but account for half of health care costs.
Kathie Durbin can be reached in The Columbian's Olympia bureau at kathie.durbin@columbian.com or 360-586-2437.