With health care costs and medical bankruptcies on the rise, state lawmakers are considering plans to drastically change Washington’s health care system in an effort to cut costs and improve care.
“Structural reform is on the table for the first time in many years,” said Sen. Karen Keiser, D-Kent, who chairs the Senate Health and Long-Term Care Committee. She’s also the chief sponsor of a proposal that would replace employer-provided and individually purchased health insurance with universal coverage. Her committee discussed the bill, along with several other proposals, on Monday.
In absence of federal action, states from Massachusetts to Hawaii have passed laws that expand health care coverage, with mixed results. In Washington, Democrats and Republicans agree the current system needs retooling, but their plans varied from Keiser’s payroll tax-funded system to one modeled after the stock exchange.
Senate Bill 6221, a near-replica of a $15 billion citizen-funded proposal in Wisconsin, would replace employer-provided and individually purchased health insurance with a universal plan financed by a payroll tax.
Under Keiser’s plan, employees would pay 2 to 4 percent payroll tax and employers would pay 9 to 11 percent. For that price, every resident of the state not covered by federal plans would receive a voucher for a basic health insurance plan with no monthly premiums. More coverage would be available for an additional cost.
Rather than mandating health insurance, Keiser’s plan would extend automatic coverage to anyone who qualified, even if they failed to register using the voucher.
She said the plan would save employers and employees money, while providing insurance to every Washington resident not covered by federal programs.
Wisconsin state Sen. Jon Erpenbach, a Democrat who sponsored a similar plan in his state, testified at the hearing that economic analysis shows the plan would save his state $1 billion a year for the first 10 years.
“The savings are huge … almost to the point where it’s not believable,” he said.
That held true at Monday’s hearing, where some critics doubted the math would work.
“If you mandate that employees and employers take on this cost through a salary tax, what do you do about the fact that medical costs are going up faster than those salaries?” said Sen. Cheryl Pflug, R-Maple Valley.
Another proposal, championed by Insurance Commissioner Mike Kreidler, would provide no-cost catastrophic insurance for the state’s uninsured and underinsured. Senate Bill 6603 also includes limited preventive care, including one dental visit per year. The catastrophic insurance would kick in after an individual had exceeded $10,000 in out-of-pocket, medically necessary care in a given year.
Kreidler told the committee that his plan would be paid for by a broad-based payroll tax of 1 percent for employees and between 3 and 5 percent for employers. Tax credits would soften the blow for employers who offer comprehensive insurance to their employees.
He said major changes to the health care system are long overdue. “It’s how and what we do, not if,” he said.
Meanwhile, Pflug, a registered nurse, had her own proposal for health care reform. Inspired by the health insurance offered to members of the U.S. Congress, Senate Bill 6574 would create a stock market-like exchange for insurance.
Pflug said it would allow employees to choose their plan from a wide variety of vendors using credits from their employers. Increased competition would lead to savings, she said, and unused credits could be saved up for retirement.
Despite a variety of big plans, Keiser said she doesn’t anticipate any of the bills passing this year.
“Something like this – such a major change – we have to have hard numbers for the business community and others,” she said. Her main goal is to incite serious public discussion now and commission an economic study of the proposals and town hall-style meetings over the next year.
Her goal is to position the Legislature to pass reform next year, when lawmakers aren’t eyeing re-election campaigns and have more time and money for implementing a plan.
After Monday’s discussion, Keiser summed up her feelings on the next step in Washington’s health care reform.
“Let the debate begin.”
Niki Sullivan: 360-754-6093
Be part of the dialogue
There’s a way to learn more about efforts to reform Washington’s health care system.
Go online: Today and Wednesday, a “web dialogue” on the Legislature’s Web site will allow citizens to pose questions to lawmakers, suggest fixes and learn more about what drives health care costs in the state.
To participate: www.webdialogue.net/wasen/healthcare today or Wednesday. Or visit the site later in the week to read the full dialogue.
For more information: www.leg.wa.gov