Steve Hill, administrator of the state’s Basic Health Plan, faced a terrible dilemma. Lawmakers ordered $238 million in cuts to the health insurance plan that serves low-income workers and it was up to Hill to figure out how to meet the 43 percent budget cut.
Lawmakers assumed Hill would simply toss 40,000 to 45,000 working poor off the health plan. Some people suggested a seniority-based system where the last people enrolled would be the first to lose their health care benefits. Others proposed a lottery where people would be drawn at random and lose coverage based on the luck of the draw.
It truly was a choice of multiple evils.
Hill, administrator of the state’s Health Care Authority, surprised many when he opted to raise rates instead of cutting health insurance benefits to thousands of working poor.
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As difficult as it will be for those workers to pay higher premiums and out-of-pocket deductibles, Hill and his staff deserve credit for protecting as many adults as possible. Hill’s decision is better than snatching health care benefits from 45,000 people.
“We are fully aware that this decision will impact many people in the program. Even a $17-a-month increase can be tough for a family struggling to get by,” Hill said. “But this option gives those families a choice. No one qualified for the program will be arbitrarily removed.”
There are 5,000 people enrolled in both Basic Health plan and Medicaid. Those 5,000 individuals will lose their BHP coverage, but will have their medical expenses covered under Medicaid. Another 3,000 people could qualify for Medicaid in which case they, too, will be dropped from the Basic Health Plan rolls.
Gov. Chris Gregoire supported the decision, saying, “I know this was a difficult decision for Steve and his staff. They found a way to minimize the number of people losing health care, but we still have a long way to go. There are more than 30,000 Washington residents waiting to get into Basic Health.”
And therein lies the crux of the matter. On the same day Hill announced the rate hike, Insurance Commissioner Mike Kreidler said the number of people in Washington state without medical insurance has spiked 21 percent to a record 876,000.
“This year in Washington state, nearly one in five people between the ages of 19 and 64 will have no health insurance,” Kreidler said. “These are not just statistics. They are people you know – family, friends, neighbors, colleagues. Maybe even you.” According to Kreidler, 150,000 Washington residents will become uninsured this year.
Add in the more than 1 million Washington residents on Medicaid and nearly a third of state residents have no insurance or are on a subsidized plan. That’s outrageous in this, a nation of wealth. It’s the reason Congress and President Barack Obama must get serious about national health care reform.
The average Basic Health Plan enrollee will see premiums rise to $61.60 per month, up from $36. The lowest premiums double from $17 to $34 per month in January. Participants also will see out-of-pocket deductibles jump from $150 to $250.
While that may not sound like a lot of money, to those living from paycheck to paycheck, it’s a heavy burden.
“I think that when you are looking at somebody living at poverty, at less than $1,000 per month, and their premium goes from $36 to $60 a month … that is really significant,” said Rebecca Kavoussi, spokeswoman for the Community Health Network of Washington. “These are folks for whom that additional $30 or $40 could be spent on something they really need, like rent or groceries. So I think a lot of them may unfortunately make the decision to drop their coverage.”
Hill’s solution assumes about 2,000 people will drop coverage each month. At least that will be their choice versus the state simply booting them off.
Given the directive to save $238 million, Hill and his staff deserve credit for devising a plan that gives families a choice whether to dig deeper into their pockets to keep their health care coverage. It’s better that they decide their future rather than state government making that decision for them.