May 09, 2019
Washington’s legislature passed a bill (SB 5526) that Governor Jay Inslee (D) is expected to sign that would require the WA Health Care Authority to contract with one or more insurers to offer a public plan on the exchange by 2021. Under the bill, the public plan must:
- Pay providers, excluding pharmacy benefits, no more than 160% of Medicare rates;
- Pay primary care services (family, general internal or pediatric doctors) no less than 135% of Medicare rates;
- Pay critical access or sole community hospitals rates no less than 101% of Medicare rates;
- Meet state requirements for network adequacy; and
- Align with state efforts on value-based purchasing.
The bill also requires government officials to develop a plan to extend subsidies up to 500% of the federal poverty level and sets a goal of holding premiums to no more than 10% of people’s modified adjusted gross income by November 15, 2020.
Impact on Employers and Employees
If providers are willing to accept the bill’s rates and plans meet network adequacy requirements, employees using the exchange could have cheaper coverage options. However, it could also be harder to access care if the plan attracts large numbers of people. It could also significantly reduce revenues for hospitals and physicians, and they could respond by reducing services as they adjust their costs.
Employer plans and plan participants are likely to be at increased risk for cost-shifting and adverse selection depending on how the plans are structured and providers respond.
Governor Inslee is likely to sign the legislation soon. Other states with Democrat leadership could follow in Washington’s footsteps, but most will take a wait and see approach.