State plan might aid 700,000 uninsured

By Brad Shannon | The Olympian • Published July 12, 2008

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Insurance Commissioner Mike Kreidler is touting a new health insurance concept that covers all Washington residents against high costs for catastrophic health care and might also lower insurance costs for some businesses and individuals.

The Democratic commissioner, who is running for re-election this year against two Republicans, said Wednesday that his proposal is being refined. But he thinks it can deliver coverage to the approximately 700,000 Washingtonians who are uninsured and also help those who are underinsured and can be sent into bankruptcy because their policies don't cover enough.

"One in four people who have insurance do not have enough coverage to meet their needs in a medical crisis. They are going to go into bankruptcy," Kreidler, a two-term commissioner, told The Olympian's editorial board Wednesday.

The plan, which Kreidler calls the Guaranteed Health Benefit Plan, would put a 1 percent payroll tax on individuals and an additional 3 percent to 5 percent payroll tax on employers, raising about $6.5 billion to pay for the coverage.

Kreidler said his proposal could actually reduce what businesses are paying by 35 percent to 40 percent, and he would ask the Legislature to send it to voters as soon as November 2009 for approval.

The plan would have gaps, requiring workers to get additional insurance for routine care or pay up to $10,000 per year out of pocket. Early doubters include the Association of Washington Business, whose policy analysts say most medical costs and claims are below the $10,000 threshold.

"We are very skeptical about some of the statements he is making," said Donna Steward, government-affairs director for health policy for AWB, which is doing research into more private-market solutions to the health care crisis.

Kreidler's plan also does nothing to drive down costs of health care, Steward said. A spokesman for Premera Blue Cross, the state's largest health policy provider, echoed that concern and others.

"The good thing is someone as high-profile as the insurance commissioner has a proposal out there that tries to address the problem of getting coverage to folks," Premera spokesman Mark Stuart said. "That said, we've got some concerns about the funding being adequate."