For more than a year a state work group has explored the idea of a universal healthcare system in Washington state with forthcoming recommendations for the state legislature to consider. However, a persistent challenge has been the costs of implementing the system – costs that one state lawmaker on the work group says the state legislature is unlikely to accept.
A report released last year estimated that the cost of implementing a single-payer system would require $28 billion in new taxes. It’s now estimated that the baseline cost for providing universal healthcare either directly from the state or through a third party administrator would be $55-$58 billion – both are several billions more than the state’s two-year operating budget. Those figures represent the total verified expenditures in 2018 on healthcare in Washington. The cost would increase by $400-$600 million if the system provided healthcare to undocumented immigrants.
However, Optumas Senior Consultant Shane Mofford told work group members at a Sept. 16 meeting that the estimates include “a range of assumptions,” adding that there is a “degree of uncertainty introduced when you’re imputing the large…expenditures.”
While the system could achieve neutral cost changes under a delegated third-party administration, Optumas reported that the high-end estimate has the system adding $2.6 billion in total costs. However, Mofford said that the system could also reduce overall healthcare spending by up to $3 billion.
Optumus Senior Consultant Jared Nason stressed the importance of system sustainability. “You want to make sure it’s safe from a financial perspective. States are not allowed to go into debt spending.”
The costs of a single-payer system have been cited by experts such as Washington Policy Center Health Care Policy Analyst Dr. Roger Stark as proof of its infeasibility, citing other states like California and Vermont that have unsuccessfully attempted to do so.
Aside from cost, the system would also have to navigate a variety of federal healthcare laws, including the Employee Retirement Income Security Act (ERISA). That law concerns private employer-sponsored health; one of its provisions prohibits states from forcing self-insured employers to purchase coverage or regulate what they cover. Because of that and other legal issues, Optumus estimates it would take five years after passing a single-payer healthcare bill for it to actually be implemented.
Lisa Humes-Schulz is the Director of Strategic Initiatives for Planned Parenthood Votes NW and Hawaii. She told the work group she felt “a little discouraged. It feels like such an uphill battle.”
Washington State Nurses Association President Lynette Vehrs told colleagues she’s more optimistic and “encouraged to see we kind of got it mapped out. The public and the people of the United States are looking to the state of Washington to pull it together, and we will do it.”
However, Rep. Nicole Macri (D-43) cautioned that “government is not very well positioned to be the one that takes on the huge financial risk on the front end in order to reap huge financial benefit on the back end. Usually the private sector will do that venture capital investment. I just worry particularly this time the legislature isn’t going to be very inclined to seeking big financial risks.”
The work group’s next meeting is scheduled for Oct. 7.