One step closer to socialized medicine?

One step closer to socialized medicine?
The state House has approved a bill that would create standardized health plans for the individual market through the state’s health care exchange. However, critics say it’s on the slippery slope to socialized medicine.

In a 57-41 vote on Mar. 8, the Washington House approved ESSHB 1523 after an extended and heated discussion that at one point caused the chamber to recess. Lawmakers in favor of the bill believe it will help lower health care costs, while detractors insisted that it will do the exact opposite.

Washington’s Health Benefit Exchange allows residents to compare and buy individual health coverage through private carriers that meet state and federal requirements. There are four tier plans – bronze, silver, gold and platinum, that cover a certain percentage of the “actuarial value” of the plans, while the insurance provider covers the remaining costs. However, some variations in these plans are permitted under federal law.  Also available are premium subsidies for individuals whose income is 100-250 percent below the federal poverty level.

Under ESSHB 1523, the Exchange must work with the state insurance commissioner, the Washington Health Care Authority (HCA)and other stakeholders to create three standardized plans for the exchange. Starting in 2021, carriers would have to offer two types of standardized plans, though they would be allowed to offer other plans as well.

These standardized plans are intended to lower deductibles, premium rates and the number of covered visits to a medical practitioner, among other things. The bill would also have the HCA contract with a health carrier to offer certain types of health plans through the Exchange that would cap the reimbursement rate to a health care provider to that of Medicare.

Speaking in opposition to the bill while it was in committee was the Association of Washington Healthcare Plans, Association of Washington Business, America’s Health Insurance Plans and the Independent Business Association.

Two amendments were added to the bill prior to its passage in the House. One requires the Exchange and the insurance commissioner to study the impacts to Exchange consumers of offering only standardized plans starting in 2025. The other amendment requires the insurance commissioner to submit an annual report to the legislature on the number of health plans available per county in the individual market.

Sponsor and Health Care & Wellness Committee Chair Eileen Cody (D-34) told colleagues on the House floor that the bill is “a very simple idea” to “use our state purchasing power to get better plans offered to our people. What we are really trying to do with this bill is bring down the prices of the individual market.”

Speaking in support of the bill, Rep. Laurie Jinkins (D-27) said the new plans would help keep people out of bankruptcy due to medical-related bills. “Anything that we can do to control and contain costs for consumers is something that we should absolutely be doing.”

However, the bill drew strong opposition from several Republican lawmakers, including Rep. Richard DeBolt (R-20). He said the bill underscored the debate between “enterprise and competition driving prices down, or monopoly single payer systems keeping costs low. I have never seen in any economic theory where a single payer system or a single entity drives cost down, because they don’t have to compete.”

Though ESSHB 1523 wouldn’t create a single payer system, he said “it mandates those few remaining companies to take these plans without any consideration.”

The House was temporarily called to recess after Rep. Jim Walsh (R-19) offered harsh criticism of the bill authors’ motives, calling the legislation “an erosion of rational market forces that dictates the price of health insurance and health care. Obamacare was a failure. This socialized medicine mélange will be a failure. And frankly I don’t even think it’s an unintended consequence. I think this is designed.”

“This bill isn’t socialized medicine,” he said. “This bill is the train wreck that comes first, and then there’s socialized medicine. We have to stop moving in the wrong direction.”

ESSHB 1523 has not yet been referred to a House committee.


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