Basic Health Plan needs federal support

THE OLYMPIAN | • Published October 22, 2009

Comments (0)

The link between the state-subsidized health care program for low-income workers and federal legislation to reform health care just grew a little more urgent and a little stronger.

Whether the connections between the state’s Basic Health Plan and the legislation slogging its way through Congress are enough to keep health insurance access alive for some of this state’s working poor remains an open question.

Making those connections between the state plan and the federal health care reform legislation should be a priority.

The state program took a huge hit last legislative session as state lawmakers struggled with a budget deficit. It was cut by 43 percent, or $255 million, to help balance a two-year state budget that was $4 billion out of whack.

Thanks to an economy that remains sluggish, it looks like legislators will have to carve another $1 billion out of the budget to match predicted revenues with expenses when they return to Olympia in January.

It would come as no surprise if state lawmakers shy away from new taxes to help rebalance the budget when they convene in January 2010. The Basic Health Plan could easily be back on the chopping block.

The looming threats to the state’s 22-year-old program, which gives the working poor an opportunity to participate in state-subsidized health care insurance, highlights how critical and urgent it is for Congress to pass meaningful health care reform soon.

Program officials have made the best of a bad situation. They chose to raise insurance premium co-payments and annual deductions, rather than reduce members based on their time in the program or through a lottery-style approach to enrollment.

What they’ve done is buy a little time with the hope that the economy will recover and Congress will approve health care reform.

But the net effect is a program that was serving some 100,000 state residents a year ago is expected to be down to about 60,000- to 65,000 people next year.

The timing couldn’t be worse as demand for the program grows. A report issued this week by Families USA, a national group for health care consumers, estimates that 100,600 adults in this state lost their health insurance coverage through August 2009 due to increases in the number of unemployed workers.

Two weeks ago, Sen. Maria Cantwell, D-Wash., pushed an amendment through the Senate Finance Committee by the narrowest of margins to allow states to establish basic health care plans similar to Washington’s, funded by the federal government.

While the proposal shares a lot in common with the much-maligned “public option,” which has become a major sticking point in health care reform, it does offer hope of a way to keep the state’s Basic Health Plan essentially in place under a new set of rules and federal funding.

Cantwell also has pushed through an amendment to raise Medicaid eligibility to 133 percent of the federal poverty level. This move alone would move tens of thousands of Basic Health Plan enrollees into the Medicaid program where the taxpayer costs are split between the state and federal governments.

Assume for a moment that federal health care reform passed with the Cantwell measures in place. The state would still face a huge challenge in keeping the Basic Health Plan alive since most federal health care reform would not kick in until 2013-14.

It looks like Congress has two important tasks ahead if it wants to model federal reform after the state plan: Pass health care reform with the Cantwell amendment in place, then provide bridge money to keep the Basic Health Plan afloat while it would otherwise be dependent on a shrinking pot of state budget revenues.