Washington's subsidized health care program for low-income workers will be back on the chopping block next year as lawmakers try to deal with a new budget shortfall of more than $1 billion.
Gov. Chris Gregoire and others have questioned whether the Basic Health Plan, which legislators scaled back this year to a cost of $337 million over two years, can be sustained without new taxes or federal help. Lawmakers already cut more than $4 billion out of this year’s general fund budget, including 43 percent of Basic Health’s budget.
The threat of further cuts comes as U.S. Sen. Maria Cantwell, D-Wash., and others have held up the Basic Health Plan as an example of a program that should be a piece of national reform. Cantwell early this month won amendments in the Senate’s emerging federal health-reform bill that would use federal dollars to help Washington and other states that adopt Basic Health-type programs pay for them.
“We made reductions in the BHP before and were able to save portions of the program. The budget situation continues to deteriorate. I need all the options available in order to solve this budget shortfall,” Gregoire’s budget director, Victor Moore, said last week.
Moore said eliminating Basic Health is on the table along with other potential cuts, and Gregoire questioned recently how she could balance the budget without new taxes, federal help or cutting programs such as Basic Health.
Basic Health is available to people with incomes up to twice the federal poverty line, or $44,000 a year for a family of four. Under the 22-year-old state-funded program, the state sets standards for coverage, and private insurers bid to be included as a choice for low-income workers who buy insurance through the Health Care Authority.
The plan still serves 84,000 low- income people but is shrinking rapidly and is expected to have enrollments down to 60,000 to 65,000 next year as the effects of budget cuts take hold. Higher co-payments, deductibles and monthly premiums that will go up from about $36 on average to nearly $62 a month will take effect in the next re-enrollment period, which begins this week.
“I’m sure everything is on the chopping block,” said House Majority Leader Lynn Kessler, D-Hoquiam, who supports the Basic Health Plan. “Again, we’ve been watching the feds to see what they will do. We’ve had our public option for a long time, and it’s a great option. They pay on a sliding scale, and you get coverage (from private insurers). It’s parallel to what you’re earning.”
“From my perspective, if it’s a state-only program, it should be significantly scrutinized for whether we can have it as a state-only program,” state Rep. Gary Alexander, R-Thurston County, said. “It’s possible the BHP in Washington could be eligible for federal dollars. That would change the priority for that basic program in my mind.”
But Alexander and House Republicans have favored getting rid of the plan in its current form, and also cutting a General Assistance Unemployed program that provides cash and health coverage for people waiting to get federal disability help.
For Seattle-based medical software developer Justin Wilcox, the Basic Health Plan was his only option. He has been watching the national health care debate and sounded surprised to learn Basic Health faces still more challenges.
“If I can’t get health care coverage, the startup I’m (creating), which has the potential of creating jobs, won’t get started. I would certainly encourage our lawmakers to look for increases in taxes or look elsewhere if there are other cuts that can be made,” Wilcox said.
The threat to Basic Health highlights the uncertainty around health insurance reform. While Congress debates a sweeping solution that might help Basic Health or a replacement survive, states are struggling to hang on to homegrown solutions that have been filling in the gaps, according to Gregoire health policy adviser Jonathan Seib.
But under the emerging federal legislation, most reforms would not take effect until 2013-14.
“The hanging on part is going to be easier said than done,” Seib said. “The bottom line is, Yes, the (Basic Health) program is at risk, and we will look at every option to continue the program and continue to provide subsidized coverage.”
Seib said one hope is that Congress provides some early funding or flexibility for states.
“One of the options that may be available in the federal reform would be early expansion of Medicaid without the strings that attach now,” he said.
So far, Cantwell has won amendments that would expand Medicaid and help Basic Health. She would increase Medicaid eligibility to those with incomes up to 133 percent of the federal poverty level. She would use federal funding to make Basic Health available to people whose incomes are between 133 percent and 200 percent of the federal level.
Those two moves alone would help, said advocate Rebecca Kavoussi of the Community Health Network of Washington. The network represents clinics such as Sea Mar in Olympia that handle the lion’s share of the state’s Basic Health clients.
Kavoussi said Cantwell’s proposal to raise income eligibility for Medicaid could let about 67,000 people on Basic Health move onto Medicaid, which splits the taxpayer cost between the state and federal governments. Cantwell also wants to make other federal money available to BHP-style plans around the country, offering additional help to roughly 110,000 more people eligible for BHP in the 133 percent to 200 percent income band, Kavoussi said.
If successful, that would address some of the growing backlog of people waiting to get into Basic Health. Dave Wasser, spokesman for the state Health Care Authority, said the waiting list has grown to 66,000 people.
Wasser said he received calls from national news reporters wanting to know about Basic Health after Cantwell made her proposal.
“What Cantwell did was put a face on what a public option might be. We got a lot of attention nationally; how does this work? A lot of national media I talked to were surprised. It seemed almost too simple,” Wasser said.
The Senate bill could get a committee vote as soon as Tuesday, then go to the floor for amendments and debate, Cantwell spokeswoman Ciaran Clayton said.
In a related health care development, the state is getting a $34 million federal grant to revive its health insurance partnership or insurance exchange. Majority Democrats in the Legislature approved the partnership law a few years ago, then put it on hold this year for a lack of funding to pay subsidies.
The partnership is an insurance brokerage similar to what Massachusetts created with its “connector” and also similar to the “exchange” that the Democrats’ national reform talks about. It would offer subsidies to help low-income workers in small businesses buy private-insurance policies, and both businesses and the employee also would pay a share of the costs.
The Health Care Authority has begun “getting the cobwebs off” the partnership program using the first $1.2 million installment, Wasser said. The first subsidies would be given out in the second year, beginning in September 2010, putting Washington in a lead role for putting national reforms in place.
Brad Shannon: 360-753-1588
For details about Washington’s Basic Health Plan for the working poor, go to www.basichealth.hca.wa.gov.