Healthcare “standardized” plan proposal passes

Healthcare “standardized” plan proposal passes
The state legislature has approved a bill that will create standardized health plans for the individual market to make them more affordable, though some lawmakers are worried the bill could backfire. Photo: freepik.com

The Washington state lawmakers in the final days of session approved legislation intended to lower healthcare costs, but opponents say it will have the opposite effect.

ESSB 5526 sponsored by Sen. David Frockt (D-46) had initially cleared the Senate on Mar. 13, and  the House on April 10. Changes made by the House were not approved by the Senate, with a conference committee proposing a compromise that was adopted by the House on April 27 with a 56-41 vote and by the Senate that same day by 27-21.

The bill concerns healthcare plans available through Washington’s Health Benefit Exchange, which allows residents to purchase individual health coverage from private carriers that meet state and federal requirements. Different tiered plans cover a certain percentage of the “actuarial value,” and insurance providers cover the rest, though federal law allows for some variation. There are also premium subsidies for individuals whose income is 100-250 percent below the federal poverty level.

Under ESSB 5226, the Exchange, state insurance commissioner and the Washington Health Care Authority (HCA) will create three standardized plans that reduce deductibles and provide more services, such as the maximum number of medical visits. Health carriers operating through the exchange  begin offering these standardized plans by 2020.

The bill also has the HCA contract with a health carrier to provide health plans through the Exchange that would cap the reimbursement rate to a health care provider to 160 percent of what Medicare pays.

On the House floor, Rep. Eileen Cody (D-34) said the bill “will bring down the price and actually make insurance that’s affordable and usable for the individual market.”

Similar remarks were made on the Senate floor by Sen. Annette Cleveland (D-49). “This is a tremendous step forward in continuing the work to ensure that every individual in this state has access to affordable healthcare coverage.”

However, Rep. Joe Schmick (R-9) spoke out in opposition, saying “I don’t think that it’s wise to put rates in statute. This bill won’t achieve what we want at the end of the day.”

Among his criticisms is a provision in the bill that allows the health care authority director to waive the plan requirements if a healthcare provider is unable to form a network that meets exchange standards.

“If I’m a provider, why would I ever agree to the rates here?” Schmick said. “I’ll just hold out until I get what I want, and this bill allows that.”

On the Senate floor, Sen. Steve O’Ban (R-28) told colleagues he preferred the bill version that initially cleared its chamber, rather than the conference committee version. “It did not contain rate caps of any sort but (was) a lot more free market and a more flexible way to negotiate with providers to get closer to a market-based reimbursement system. I wish we had stuck with that, and I think had we done so there maybe might have been some votes over there on the (other) side of the aisle.”

He added that “we worry that this could distort the market, that it will result in the smaller business market losing. I know it was a hard-fought compromise and great effort, but I’m very concerned about the outcome.”

Another bill provision has the Exchange, health care authority and insurance commissioner submit a report to the legislature by December 2022 on the impact of the bill on healthcare, along with any recommended action or changes.

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