Federal Healthcare: Impact on Washington

Washington is ahead of many states in implementing aspects of the federal halthcare bill, and will it will require less state money here than it does in other states. One of our policy analysts put together a short summary of the next steps we’ll be going thorugh as we figure out the implications for Washington.

Getting the details right on this will make the difference between a successful implementation and one that doesn’t work and wastes money. I expect to spend a fair amount of time trying to understand the flow of money as we implement this so that we can plan out how it will work carefully. More information can be found after the jump…

The supplemental budget includes a provision establishing a joint select committee on health reform implementation:

 NEW SECTION. Sec. 954.     A new section is added to 2009 c 564 (uncodified) to read as follows:

JOINT LEGISLATIVE SELECT COMMITTEE ON HEALTH REFORM IMPLEMENTATION.

 The joint legislative select committee on health reform implementation is established. The joint legislative select committee on health reform implementation shall be co-chaired by the chairs of the health committees of the senate and the house of representatives, and leadership of the two largest caucuses in the senate and the house of representatives shall each appoint two additional legislators to serve on the committee. The co-chairs may direct the formation of advisory committees, if desired, to focus on specific topic areas, such as insurance regulation, access and expansion of public and private programs, and workforce issues, and may invite interested stakeholders and additional experts to advise the committee. All participation in the joint select committee and any advisory committees is without  compensation.

This section expires June 30, 2011.

We assume that the joint select committee’s duration will extend beyond June 30, 2011 – that can be accomplished next session via either a joint resolution or another budget proviso.  This committee will be the focal point for discussions related to both policy and fiscal decisions that must be made to implement health care reform.  It will also be a great opportunity to involve stakeholders in the committee’s deliberations through the formation of advisory committees.

In addition to the joint select committee beginning its work, the greatest focus over the next six months will likely be:

1. Implementation of the health insurance regulation changes that are effective for health plans entered into or renewed after September 2010. 

The Insurance Commissioner and his staff are working with health insurers in the state right now defining the specifics of the changes that will be implemented.

 The changes include:

  • Prohibits denials of coverage for children with pre-existing medical conditions.  (Prohibition goes into effect for adults on January 1, 2014).
  • Prohibits $1 million lifetime cap on benefits (group plans).
  • Prohibits co-pays for preventive care, including immunizations, well child care, and preventive care and screening services for women.
  • Dependent coverage is extended up to age 26.
  • Minimum medical loss ratio [MLR]:
    • 85% for large group plans/ 80% for small group and individual plans.
    • Insurers must report MLR beginning in 2010, and rebates to consumers required in 2011 if MLR is lower than minimum allowed.
    • Administrative simplification for insurance forms/standards:
      • Washington State enacted similar legislation in 2008; we are ahead of national effort 

2. Implementation of high risk pool by July 1, 2010:   

  • The federal health reform bill provides $5billion for the transition period of 2010 to 2014 for states to offer coverage to people who are rejected from individual coverage due to a pre-existing condition and have been uninsured for at least 6 months.  
  • We are awaiting guidance from the federal Department of Health and Human Services on the details, but we’re already working with the Office of the Insurance Commissioner to identify the best entity to administer this new program.   It is fairly likely that our existing high risk pool, called the Washington State Health Insurance Pool, will administer the program, side-by-side with our existing pool.  Our existing high risk pool does not require that someone be uninsured prior to joining the pool, only that they be denied individual coverage due to their health status. 

3. Obtaining a federal waiver to get federal matching funds for the Basic Health Plan and our GAU (now Lifeline) medical program:    

  • The federal Medicaid statute had, until passage of federal reform (effective in January 2014), not allowed coverage of non-disabled childless adults under Medicaid, regardless of how poor a person is.  A s of January 2014, all adults with income up to 133% FPL will be eligible for Medicaid, with high federal matching rates to help states with this added cost.
  • For over 20 years, Washington state has used state-only funds to support access to health care for childless adults through the Basic Health Plan and GAU medical care services.  Over the past 15 years, we’ve invested over $2billion in funding those programs.
  • The federal health care law gives us the opportunity to request a federal waiver so that we can get federal Medicaid matching funds to help us with the cost of both BHP and GAU medical during this 3 year bridge period.  The Governor  has already submitted a waiver request to the federal government and DSHS staff is engaged indepth negotiations with the federal Centers for Medicare and Medicaid Services.  We are hoping that the waiver can be approved by the end of 2010.

About the Author

Ross
I am the Director of the Department of Early Learning for Washington State. I formerly represented the 48th Legislative District in the State House of Representatives, chairing the Appropriations committee and spent many a year at Microsoft.