State GOP holds its nose, accepts Obamacare savings

The Seattle TimesApril 15, 2013 

Republicans were at war over President Barack Obama’s health care law less than a year ago. The Republican state attorney general had joined a lawsuit to overturn the law, and the party’s legislators warned it would cost too much money.

Now the GOP-led state Senate is counting on Obamacare to help balance the budget, booking more than $400 million in savings from the federal program over the next two years. House Republican budget writers assume some health care savings as well.

“We’ll take it, because financially it’s better for us,” said Don Benton, R-Vancouver, Senate deputy Republican leader.

“But we don’t like it. We don’t like the policy, because it moves us dramatically toward a kind of socialized, one-payer-type system.”

To put this change in perspective, last year then-Attorney General Rob McKenna was arguing the law was unconstitutional, and signed onto a federal lawsuit to overturn it. GOP lawmakers nationally, and in this state, were urging the law’s repeal. Then the U.S. Supreme Court upheld the law and Republicans took control of the state Senate, promising to close a roughly $1.3 billion budget shortfall and throw more money into education — without increasing taxes.

“When you have that much money hanging out there and you have a budget deficit, naturally the budget writers said, ‘We’re going to do this.’ So that’s the way it is,” said Sen. Linda Evans Parlette, Senate GOP caucus chairwoman.

Parlette, who argued last year that the federal health-care law “could bankrupt any state,” said she still has concerns about it, including long-term costs if the federal government does not live up to its promises for funding the Medicaid expansion included in the act.

The savings Republicans are counting on come from the federal government picking up the cost of health-care coverage for the poor that the state is now on the hook for, and shifting thousands of part-time state government employees into federally subsidized insurance. The federal law includes many other changes in the health-care system, including a requirement that most individuals have health insurance.

Democrats note that while the U.S. Supreme Court upheld the law, it also ruled that states could drop out of the Medicaid expansion without penalty in the future.

“This is not something we’re putting into our constitution,” Democratic Gov. Jay Inslee said earlier this year. “If 15 years from now Congress tries to change this deal in some way we can’t predict, the state of Washington will be free to leave the program without any penalty.”

Inslee, as well as House and Senate Democrats, support the health care law.

Accepting the Medicaid expansion is projected to provide free or subsidized health-care coverage for more than 200,000 lower-income residents in the state now without insurance, according to nonpartisan staff. Also, the federal government also will fully fund several existing health-care programs that the state is currently paying for, to varying degrees, such as the Basic Health Plan, which provides insurance for the working poor.

The Senate budget projects the additional federal funding for those programs, which will be rolled into the Medicaid expansion, will save the state roughly $300 million over the next two fiscal years.

The federal government will pay 100 percent of the costs for three years and then slowly ramp it down to 90 percent, with states picking up the remainder. Analysts project the state’s 10 percent share will cost roughly $150 million per biennium when it kicks in.

“I think in the scheme of things that is manageable,” said Senate Ways and Means Chairman Andy Hill, R-Redmond. In addition to accepting the Medicaid expansion, the Senate budget also proposes saving money by eliminating state-funded health care for part-time government employees, including state workers and noncertificated K-12 staff.

It’s expected the workers would take advantage of credits and subsidies offered under the new law and get insurance through a new health insurance exchange.

The Senate budget also includes funding — equal to a $2-an-hour hike in wages — for part-time employees to help pay for part, or all, of the premiums for plans purchased in the exchange.

Even with the higher wage costs, the Senate Ways and Means Committee projects the move could save the state around $130 million over the next two years, with most of the savings coming from the K-12 budget. If approved, the state would reduce its allocation to schools, and it would be up to districts to either bargain the change with unions or make up for the loss in funding another way.

Rick Chisa, a spokesman for the Public School Employees of Washington, said his organization is still reviewing the proposal but has some concerns. One is that the wage increase would not be enough to fully offset any increase in premium costs for some workers.

“We’re not out-and-out rejecting it. We’re having conversations about this,” Chisa said, adding, “We don’t think this will pass this year.”

Democrats have expressed both interest and reservations about switching part-time government workers to federally subsidized insurance, saying the idea needs more study.

And while state acceptance of a Medicaid expansion appears inevitable, Senate Republicans say they still have reservations.

“The concerns with a number of people in my caucus is that we’re doing a big shift to the federal government,” Hill said.

Which raises the question, he said, of whether Congress is “going to be able to uphold this huge spending commitment in the long term. From a fiscal-responsibility standpoint, are they going to be there?”

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