Washington state lawmakers this session considered several bills intended to reduce healthcare costs. However, while the approach focuses on capping the rates by health care providers, industry members recommend a separate approach they say could reduce insurance premiums.
“We believe the free market works,” America’s Health Insurance Plans (AHIP) Communications Senior VP Christine Grow said. “We need to focus on underlying health care costs. By bringing costs down, you lower premiums and out-of-pocket costs.”
The association was one of several to oppose SB 5526 sponsored by Sen. David Frockt (D-46) that was approved by the legislature this session and has been sent to Governor Jay Inslee. While it’s not the same proposal advocated by Inslee earlier this year “it definitely is a step toward a single-payer system,” warns Association of Washington Business Director of Government Affairs Amy Anderson. “I’m not sure if it’s implementable, because we’re not sure how much it’s going to cost. It’s (Washington state) not a competitive market for insurance companies.”
Grow said their “greatest concern in it (the bill) is creating arbitrary benchmarks.” Under SB 5526, the state Health Care Exchange must develop a health plan with an insurance company that would cap the reimbursement rate to a health care provider to 160 percent of what Medicare pays. The bill also calls on the Exchange, state insurance commissioner and Health Care Authority to create three standardized plans to be offered on the exchange. Those standardized plans provide reduced deductibles and increase the maximum number of visits to a provider covered by insurance.
However, Grow says these limits don’t reflect the actual cost of providing those services. “We need to find a better way.”
The bill also calls for the Exchange, HCA and insurance commissioner to study the policy’s impact on healthcare and report to the legislature by 2022.
“If it shows it’s the best thing and our state can afford it, fabulous,” Anderson said. “But it can’t. Healthcare is not inexpensive; it is not free. What you’re offering on the exchange is a plan that is at a government-subsidized reimbursement rate.”
A 2018 AHIP report offers some recommendations on how to reduce consumer costs. Among them are to:
- Reduce third-party premium payments for drugs or medical services;
- Amend the IRS tax code so that income spent on individual healthcare plan premiums is deductible as it is for employer-provided plans;
- Make more individual market plans eligible for Health Savings Accounts (HSA); and
- Repeal the Health Insurance Tax set to resume in 2020.
The AHIP report also notes that “prescription drug prices are out-of-control and are contributing to unsustainable health care cost growth across the country. In addition to placing strains on the health care system, rising drug prices also place financial burdens on patients who rely on prescription medicines to treat and manage their chronic conditions.”
During this legislative session Senate President Pro Tempore Karen Keiser (D-33) introduced SB 5292 that would require drug companies to disclose prescription price information. The bill cleared the Senate unanimously but failed to clear the House.
In the meantime, lawmakers push for a future single-payer system. If they do, Grow said it would “create an unfair playing field” with private insurance companies.
However, Anderson says the state could go as far as to eliminate private healthcare altogether. “If the government is contracting with a carrier to provide that aspect of the service, it would be up to the legislature to say, ‘Yes we will also allow some type of private party.’”
However, she added: “Does that prevent folks from paying out of pocket for care and have concierge doctors and hospitals, businesses who contract directly with business who are self-insured? That is legal. You might see more of that type of structure.”