How state's health care debate could affect you

BY BRAD SHANNON

State lawmakers have started rolling up their sleeves to do surgery on Washington state's health care insurance system.

House Democrats moved one major piece of their health care proposal over its first committee hurdle Thursday. They approved a bill that would set up a way for individuals and small-business employees to buy their

private-company insurance through a brokerage or "connector" set up through the state Health Care Authority - perhaps as soon as 2009.

The concept, taken from an experiment under way in Massachusetts, would let consumers choose among a half-dozen insurance products, including private-sector offerings, through the state "connector" or broker. It would mark a fundamental shift from the traditional linkage of job and insurance, and it would let the consumer pool money for the purchase using personal, employer and even state contributions.

Democrats such as bill sponsor Rep. Eileen Cody of Seattle say the proposed legislation is really about giving more choices to small-business employees, who in the future wouldn't have to go through employers to get insured.

"I think the problem is that the employer-based system we have in this country is failing," Cody, chairwoman of the House Health Care and Wellness Committee, said during committee debate on her proposal last week. "It's eroding. I don't know if employers, if you talk to them, want to stay in the health care provider business. ... They don't necessarily see that as a role of the employer."

But Republicans and several business groups are far from convinced that the proposals under discussion actually open the door enough to the kinds of private-market innovation they want - or soon enough.

Many say private insurers should be allowed to craft policies without the state's more than 45 requirements for specific kinds of care, and they want choices for employers.

Carolyn Logue of the National Federation of Independent Business says many businesses like their existing insurance plans and don't want to lose them, or have to go through a new broker to get them.

And some business groups that already offer their own plans don't want their members forced into the choices laid out by the state.

But that's just one piece of the health care puzzle that the Legislature is starting to evaluate.

Monday marks the start of hearings on a major cluster of ideas and will feature Gov. Chris Gregoire's appearance before Senate and House committees.

Gregoire is championing ideas that came out of the Blue Ribbon Commission on Health Care Costs and Access last year. The commission set a goal of covering the state's 600,000 uninsured children and adults by 2012.

Gregoire's plan also would extend parents' insurance coverage to unmarried adult children up to age 25. And she would order the Health Care Authority to set up a "connector," or state-run insurance exchange - initially helping individuals and employees of small businesses pool their dollars to buy insurance en masse and at lower rates from a short list of qualifying plans. Gregoire would bring the "connector" idea back to lawmakers for authorization in 2008, policy aide Christina Hulet said.

Gregoire and other Democrats also are pushing to cover 32,000 more children of lower-income families with state paid health insurance, eventually covering all children by 2010; they also want fewer adults running to emergency rooms for care, which drives up costs for the state and hospitals.

But Cody and Sen. Karen Keiser of Kent appear to want to go much further. Cody's bill would require all Washingtonians to carry health insurance by 2012. While Gregoire calls for study and possible legislative action in 2008, Cody wants to fully authorize a "connector" that could operate by 2009 using the Health Care Authority as the brokerage or exchange where consumer, business and even state dollars would be pooled.

Keiser has a plan to backstop small-business employees' health care plans with a state "reinsurance" program to cover extraordinary claims costs. Like Cody, she also is looking for ways to boost overall insurance enrollment.

One Republican proposal from Sen. Linda Parlette of Wenatchee would give subsidies to businesses that provide insurance to workers. Still other proposals would help subsidize premiums for small-business employees, Cody said.

'Connector'

As amended on Thursday, Cody's "connector" plan would make six policy options available to consumers who qualify - presumably at lower premium costs than they pay today.

Eventually the state's Basic Health Plan, state employees and others would be plugged into the state brokerage, taking that role away from small employers and making insurance coverage less dependent on having a large employer.

Under Cody's Substitute House Bill 1569, employers, employees and the state could share costs of the insurance plans. The contributions - in some cases from multiple employers, including part-time employers - would be paired with the employee's contribution to purchase policies from insurers selected to participate in the clearinghouse or "connector."

Unlike today, where employers dictate choices, employees would own the insurance policy and would keep it if they changed jobs. The employee also could open tax-favored Health Savings Accounts, which let a consumer pay for medical insurance or care using pre-tax dollars, an idea often popular with Republicans but often spurned by Democrats.

Rep. Dawn Morrell, D-Puyallup, said some families could see insurance savings of 40 percent under Cody's proposal, but Republicans said it all looks too much like government-run health care.

Fear of government control

In fact, only Republican Rep. Tom Campbell of Roy crossed the aisle last week to vote with the majority Democrats in Cody's committee. Campbell, who is a chiropractor, said that old solutions have failed and it is time to try something new, but his GOP colleagues weren't buying the argument at all.

"First of all I don't want the state to decide what I can provide for my folks," said Rep. Cary Condotta, a Republican businessman from East Wenatchee who said he has covered his workers for 25 years.

"I don't agree with the concept and particularly don't want to send another dime to the state of Washington. I'm not going to send my insurance premiums to the state of Washington. It will be a cold day in Hades ..." Condotta said. "I'm going to decide. I'm going to buy it. And my group is going to decide what they want. And we're not going to do it any other way."

"This is going to be a very expensive ball bouncing down the road," predicted Rep. Gary Alexander, R-Thurston County.

Rep. Bill Hinkle, a Cle Elum Republican and lead voice in his caucus on health care, has offered a proposal similar to Cody's but he would try to recruit a private group to serve as the insurance brokerage, keeping the state out of the action and quieting objections like Condotta's. Democrats on the committee rejected his proposal last week.

Private sector options

Hinkle said his approach would make it more likely that costs would be kept down and employers would participate, thus bringing more private money into the health care system. He also would let more than six insurance options into the "exchange."

Insurers and small business groups also have objected to Cody's proposal. "It needs a lot more study," Logue of the small-business-oriented NFIB said.

Cody thinks it can work

"Instead of having just one plan to choose from with those small employers, who offer one plan, the employee can choose the plan that works for them," Cody said. "They put the money the employer is willing to invest and put their money with that to get the plan they want. ... I also hope and believe it will bring more private money into the system."

Some agreement

If there is agreement on anything, it's that insurance costs too much and people without insurance should get it.

At the New Moon Cafe in downtown Olympia, owner Megan Priefer testified a year ago in favor of legislation that would have given subsidies to help cover the cost of insurance.

On Friday, she said she still can barely afford a high-deductible policy for herself. But she cannot come up with the extra $200 a month per worker that she would need to help employees in a small-group plan.

Lacking better options, Priefer said some of her employees have qualified for the Basic Health Plan, which offers insurance at a taxpayer-supported discount, but she'd like to see the state do more.

At the Sea Mar Community Health clinic on Olympia's west side, which serves low-income families, a priority this legislative session is the expanded coverage for children of lower-income families.

Besides getting care directly to children, it also can serve as a bridge to getting adults into programs that also reduce the uninsured.

"If the kids are covered and helped, once the parent is in we can provide them with more information and options" with other programs, clinic manager Angela Richardson said.

Sea Mar shares the view of community health centers statewide that want to see the Basic Health Plan expanded by 20,000 slots, according to Steven Wish, a regional director for five Sea Mar clinics. They also hope to see more done with dental care subsidies. As for a connector, he said they see both benefits and concerns.

The arguments are just getting under way. And at least among legislators, partisan differences are re-emerging on health care after becoming muted over the summer. In fact, those differences almost disappeared over the last year while the Blue Ribbon Commission met.

But when Gregoire rolled out he r Blue Ribbon Commission legislative request last week, Republicans boycotted the press conference. Hinkle said the GOP wasn't objecting to what Gregoire put into her proposals - SB 5930 and HB 2098 - so much as the lack of collaboration they saw and the GOP's fear that the bills could morph into things the Republicans don't accept.

"The bill is not really that objectionable. It's so wide open that we don't know what would end up on the bill," Hinkle explained Friday. "So what we wanted was to look the governor in the eye and say, 'If we sign onto this, there are certain things we want to guarantee are in there.' We couldn't get the meeting."

Partisan district

Hinkle said he respects Gregoire, and the governor has spoken many times about health care not being a partisan issue. But to make that real, Hinkle said, the GOP's "super-minority" position needs to be acknowledged.

"If she really wants bipartisan work, there has to be something so that Republicans can say, 'here's our solution' " when members go home to their districts, Hinkle said.

The governor hasn't weighed in publicly on Cody's proposal and some of the other ideas in the works.

But it's expected that lawmakers could question her Monday at the hearings. Coming up

Gov. Chris Gregoire is scheduled to testify Monday at 1:30 p.m. before the Senate Health and Long-Term Care Committee on Senate Bill 5930. That is Gregoire's legislative proposal based on work of the Blue Ribbon Commission. The House Health Care and Wellness Committee also will hear from Gregoire on the companion measure, HB 2098, during the same committee time slot. The proposals ask the Health Care Authority and advisory board to design a state "connector" or limited brokerage for individuals and small group employees to purchase their private insurance; lawmakers would approve it in 2008.

A Republican proposal for subsidizing small-business employees for their health-care insurance costs will get a 10 a.m. hearing Thursday in the Senate Health and Long-Term Care Committee. Senate Bill 5789, sponsored by GOP Sen. Linda Evans Parlette, also has a few Democratic sponsors; it would require the small businesses to contribute 40 percent or more of the cost but allows Health Savings Accounts and more flexible coverage plans.

House Bill 1569, the so-called health care "connector" bill from Democratic Rep. Eileen Cody, is headed to the Appropriations Committee. The measure was approved Thursday on a 9-to-4 vote in the House Health Care and Wellness Committee. The bill sets up a connector or state exchange through which small business employees and association groups can purchase insurance in 2009; in 2012 individuals, state employees, subsidized Basic Health Plan participants and the state's high-risk pool members would buy through the connector.

Senate Bill 5658, which creates a reinsurance program for small businesses, is in the Senate Ways and Means Committee awaiting consideration. It includes a 25-cent increase in cigarette taxes and $5 million from the health services account. Democratic Sen. Karen Keiser's proposal is meant to stabilize insurance markets by reimbursing certain small-group insurers for patient claims above $10,000.

Senate Bill 5093 and House Bill 1071 increase the percentage of children younger than 19 eligible for state-paid health insurance. Gregoire has proposed adding 32,000 more children to state-paid rolls immediately and all 73,000 uninsured children by 2010. SB 5093 was approved in the Senate health committee and got a hearing in Ways and Means; HB 1071 cleared the House health committee and awaits a hearing in Appropriations.