HOUSE BILL REPORT

HB 2038

BYRepresentatives Sprenkle, Holland, Braddock, Brooks, Peery, Grimm and Locke

Establishing the Washington state health care authority.

House Committe on Ways & Means

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (16)

      Signed by Representatives Grimm, Chair; Appelwick, Basich, Braddock, Brekke, Dellwo, Ebersole, Grant, Hine, Locke, Peery, Rust, H. Sommers, Spanel, Sprenkle and Valle.

Minority Report:  Do not pass.  (8)

      Signed by Representatives Brough, Fuhrman, Holland, McLean, Nealey, Schoon, Silver and B. Williams.

House Staff:Sue Crystal (786-7136)

AS REPORTED BY COMMITTEE ON WAYS & MEANS FEBRUARY 29, 1988

BACKGROUND:

Health and other forms of insurance benefits are currently provided to state employees through contracts negotiated by the State Employees Insurance Board (SEIB).  The SEIB is composed of representatives of the governor, higher education faculty and administrators, the director of the department of personnel, employee unions and associations, retired persons and the legislature.  Health benefits are provided with no premium contribution by the employee.  The present contracts for health insurance for both the Uniform Plan (Blue Cross) and the HMOs end June 30, 1988.

SUMMARY:

SUBSTITUTE BILL:  The Washington state health care authority is created as an independent agency with an administrator appointed by the governor.  The State Employees Benefits Board is established within the authority.  It is charged with the responsibility to design and approve insurance benefit plans for state employees.  The board, to be appointed by the governor, will be composed of three representatives of state employees, three members with experience in health benefit management and cost containment, and the administrator.  The administrator shall serve as chair.

The current SEIB will continue its present functions related to the upcoming contract.  OFM will review and approve SEIB actions relating to the contract.  After October 1, 1988, the new benefits board will be in place and the authority will assume responsibility for administering the insurance benefit contracts.

The State Employees Benefits Board will establish health care plans for state employees to take effect after the upcoming contracts end.  These benefits would be provided through contracts with insurance carriers and HMOs or through self-insurance.  The contracts shall provide that participants may use equally the services of a variety of providers subject to appropriate utilization controls.  Plans may include coinsurance and other forms of enrollee financial participation that are sensitive to individuals ability to pay and do not create obstacles to medically necessary and preventive care.  The authority will provide information and technical assistance to the board.  Premium contributions from employees are authorized.  All claims data shall be the property of the state.  The board will assume SEIB's functions relating to the development of plans for the provision of life, liability, accident, disability income, and other forms of insurance.

The authority will develop the technical capacity to review the other state health care purchasing programs and explore options for cost containment and delivery alternatives for these programs.  The authority is to develop data systems to obtain utilization and other forms of data from all state health purchasing programs.  A report is required that reviews the state health purchasing programs and regulatory agencies and makes recommendations regarding coordination between programs and structural changes in the state's current health delivery system.

The authority will analyze the provision of health benefits to K - 12 employees and the cost savings resulting from integration of local school districts into benefit plans offered by the authority.

A health care policy technical advisory board appointed by the administrator is established that will provide technical input to the authority regarding data collection and analysis of the state purchased health care programs and effective approaches to cost control, quality and access to health care.  The technical advisory board will be composed of persons with interest and expertise in health care purchasing, delivery or research and analysis and include representatives of the following entities:  private health care purchasers, health care providers, insurance carriers, HMOs, health care service contractors, state agencies that purchase health care, the insurance commissioner and health care consumers.

The bill authorizes the Authority to be established immediately and take necessary steps to insure that the act can be fully implemented October 1, 1988.  The remainder of the act takes effect October 1, 1988.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The substitute bill changes the State Employees Insurance Advisory Board (SEIB) to the State Employees Benefits Board (SEBB).  The SEBB will design and approve insurance benefit packages for state employees.  The administrator will serve as chair of the board which will be made up of three representatives of state employees and three representatives with expertise on benefits management and health care cost containment.

The effective date of the act is changed from July 1, 1988 to October 1, 1988.  The date for the submission of the K-12 study is changed from January 1, 1989 to December 1, 1989.  The date for the submission of the study of state health purchasing programs is changed from November 15, 1989 to December 1, 1990.

The original bill provided that the present functions of SEIB would transfer July 1, 1988 to the authority.  The substitute provides the current SEIB will continue to function until October 1, 1988 with Office of Financial Management oversight.

Appropriation:    $1.3 million to the Office of the Governor.

Fiscal Note:      Requested February 29, 1988.

Effective Date:The bill contains an emergency clause and sections 13, 32, 33, 34, and subsection 1 of section 37 takes effect immediately.  The remainder of the act takes effect on October 1, 1988.

House Committee ‑ Testified For:    None Presented.

House Committee - Testified Against:      See committee staff.

House Committee - Testimony For:    None Presented.

House Committee - Testimony Against:      See committee staff.