Interstate health insurance fails

A bill giving Washington consumers an opportunity to buy health insurance from other states died in the Legislature this year under pressure from advocates for mental health equality, massage therapists and others.

The proposal had been a priority for the Association of Washington Business and many Republicans, including state Rep. Doug Ericksen of Ferndale. It would have let the state insurance commissioner enter a compact with other states for the two-way sale of insurance plans for small groups registered in at least one of the states.

Major Washington insurers were neutral on the proposal, which would have helped businesses that had two to 50 workers in small-group insurance plans. But it’s an idea that has caught on with Republicans in the federal reform debate, and some Democrats, such as U.S. Rep. Brian Baird, have suggested it’s worth doing.

“Our interest in the bill was to introduce some competition and put downward pressure on health care premiums. We thought this would be a good way to for that to happen through a compact process, which is used in … other insurance,” said Donna Steward of the AWB. “We’ll give it another shot next year.”

House Speaker Frank Chopp killed the first version of the bill in the House in mid-February, saying that mental health advocates and others had come to him with worries that Washington’s consumer protections were in jeopardy.

“I had a number or organizations and letters that contacted me about the issue,” he said, adding, “... As I became more knowledgeable about the bill, including (reading) letters from folks who were working on mental health issues, they raised some legitimate concerns. So I felt that it wasn’t ready to move forward right now.”

Randy Revelle, a longtime champion of the parity law that requires insurers to cover mental and physical ailments on an equal footing, wrote one letter to Chopp that said, “out of state insurers would only need to meet the requirements and mandated benefits of the state where they are licensed.” That meant people with mental illnesses could be subjected to more discrimination, he warned.

Revelle’s letter was written on behalf of 142 members of the Washington Coalition for Insurance Parity. Revelle said he had support from state chapters of the American Diabetes Association and American Massage Therapists Association, as well as the Home Care Association of Washington; groups representing the mentally ill, acupuncture and Asian medicine practitioners; naturopathic physicians; mental health counselors; chiropractors; hospice care providers; and podiatrists.

The Service Employees International Union’s Healthcare 1199NW also warned in one e-mail to Senate Majority Leader Lisa Brown, D-Spokane, that the bill “threatens benefits on mental health parity, mammograms, women’s health, and emergency room care.”

Rep. Eileen Cody, the Democratic chairwoman of the House health care committee, disagreed with those concerns, as did Sen. Karen Keiser, her Democratic counterpart in the Senate. Both lawmakers are longtime advocates for mental health parity and for coverage mandates in state law, and they said they trust the state insurance commissioner to enter into agreements that would protect consumers.

Keiser did acknowledge that problems might arise if voters elected a commissioner who is hostile to consumer interests.

After Chopp killed the bill, Cody worked with Keiser to revive it in the Senate. Keiser and Cody said they have been trying to align state policy with expected federal reforms by keeping the Basic Health Plan alive, and they saw this compact bill as another chance to do that.

The health insurance industry has “carved up the market just as the oil industry has carved up the country. They really don’t want competition,” Keiser said. “This opens it a smidge to more competition.”

But Keiser eventually ran out of time to get House Bill 2875, onto which she had attached the interstate-compact language, out of the Senate before its deadline March 5.

Russ Baker of Washington-based Regence BlueShield said his company stayed neutral on the legislation, although it has concerns about preserving benefits and mandated coverage that Washington consumers have come to expect.

He disputed Keiser’s claim of a lack of competition – at least as it plays out in Washington.

Now that the bill is dead, Keiser, Cody and Steward of the AWB are waiting to see what happens with federal reforms. But Keiser and Cody also are likely to return next year with another bill.

If a federal compact is approved, Steward said, the association will encourage the state to be part of it. But losing the bill was a “considerable disappointment,” she said.

“The fact leadership put their foot on it was very disappointing,” Steward added.