BILL REQ. #:  S-2146.1 

READ FIRST TIME 02/25/09.   

     AN ACT Relating to creating the Washington health partnership plan; adding new sections to chapter 74.09 RCW; and creating new sections.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that:
     (1) Nationally and locally health care costs are inflating faster than the consumer price index and wages;
     (2) Since 1980, health care costs have increased from nine percent to sixteen percent of the nation's gross domestic product, and are expected to exceed twenty percent by 2016;
     (3) Other industrialized nations provide universal health care coverage, but spend much less. Some spend less than half as much per person;
     (4) In 2007, the average annual premium for family coverage was more than twelve thousand dollars, of which over three thousand dollars are paid by the worker;
     (5) In 2008, of Washingtonians under the age of sixty-five, over one million three hundred thousand will spend more than ten percent of their pretax family income on health care costs. Eighty-four percent of these people have insurance;
     (6) Every thirty seconds, someone in this country files for bankruptcy in the aftermath of a serious health problem. Of those who file for bankruptcy, sixty-eight percent had health insurance;
     (7) In Washington state, approximately thirty cents of every dollar received by hospitals and doctors' offices is consumed by the administrative expenses of the health plans and the providers. Before the doctors and hospitals receive the funds for delivering the care, approximately fourteen percent of the insurance premium has already been consumed by health plan administration;
     (8) In 2006, hospitals, physicians, community clinics, and other providers spent a combined total of five hundred eighty-four million dollars in uncompensated care for the uninsured, a twenty-eight percent increase since 2002;
     (9) The institute of medicine estimates that between thirty and forty cents associated with every health care dollar is spent on costs related to poor quality, such as overuse, underuse, misuse, duplication, system failures, unnecessary repetition, poor communication, and adverse events attributable to medical errors;
     (10) Rising costs have led to a decline in employer-provided health benefits. In Washington, since 1993, employer-based coverage declined from seventy-one percent to sixty-five percent;
     (11) In 2009, fewer than half of small employers in Washington are able to offer coverage to their employees;
     (12) In the face of a major recession, the health care system is eroding at an accelerating rate. As businesses suffer, they are compelled to shed workers and reduce health care coverage. Tax receipts have declined at the same time, making it increasingly difficult for the state to maintain existing safety net programs, even as demand for those programs grows;
     (13) Despite the general economic downturn, the rate of health care inflation is projected to exceed ten percent per year for the next two years, further stressing the health care system;
     (14) A new federal administration has promised to address expanded coverage, but prospects for federal reform are uncertain;
     (15) In view of the rapid and continuing erosion of the health care system, the legislature must act rapidly to reverse the decline in coverage and control health care costs in order to preserve the health and well-being of all Washingtonians.

NEW SECTION.  Sec. 2   A new section is added to chapter 74.09 RCW to read as follows:
     (1) The Washington health partnership is hereby established and is intended to attain the following goals, consistent with the recommendations of the blue ribbon commission, chapter 372, Laws of 2006:
     (a) By 2012, every resident of this state shall have access to affordable, comprehensive health care services;
     (b) Services shall be provided through the private health care sector;
     (c) The health reform plan shall maintain and improve choice of health care providers and high quality health care services in this state; and
     (d) The health reform plan shall include cost-containment strategies that retain and assure affordable coverage for all Washingtonians.
     (2) Pursuant to sections 3 and 4 of this act, the Washington health partnership shall implement health reform in overlapping phases that include (a) extending health coverage to individuals below two hundred percent of the federal poverty level in an apple health program; (b) consolidating the state's purchasing of health coverage into a smaller number of pools and streamlining administration where possible; and (c) selecting a health care reform proposal to be considered for legislative action.
     (3) Members of the Washington health partnership at a minimum shall include representatives from the department of social and health services, the health care authority, the office of financial management, and the committees of the house of representatives and the senate responsible for health care matters.

NEW SECTION.  Sec. 3   A new section is added to chapter 74.09 RCW to read as follows:
     (1) The department shall submit a request to the federal department of health and human services to expand and revise the medical assistance program as codified in Title XIX of the federal social security act. The department shall take such actions as may be necessary to access federal financial participation for low-income adults at or below two hundred percent of the federal poverty level. To the extent permitted under federal law, the program revisions must reflect the following policy considerations:
     (a) The establishment of a single eligibility standard for low-income persons at or below two hundred percent of the federal poverty level, or if not permitted, expansion of the categorical eligibility to include additional adults;
     (b) The delivery of all low-income coverage programs as one program, with a common core benefit package that may be similar to the basic health benefit package or alternative benefit package that may be approved by the secretary of the federal department of health and human services, including the option of supplemental coverage for select categorical groups like children, and the aged, blind, and disabled;
     (c) A program design to include creative and innovative approaches such as, but not limited to: Coverage for preventive services with incentives to use appropriate preventive care; cost-sharing options; use of care management and care coordination programs to prompt better coordination of medical and behavioral health services; application of an innovative predictive risk model to better target care management services; and mandatory enrollment in managed care, as may be necessary;
     (d) The ability to impose enrollment limits or benefit design changes for eligibility groups that were not eligible under the Title XIX state plan in effect at the date of the waiver application.
     (2) The department shall hold stakeholder discussions to allow refinement and public comment on the proposal.
     (3) Upon development of the proposal, the department and the health care authority shall identify statutory changes that may be necessary to ensure successful and timely implementation of an apple health program for adults.

NEW SECTION.  Sec. 4   By December 1, 2009, the office of financial management shall, in collaboration with the Washington health partnership established in section 2 of this act:
     (1) Review the findings of the study commissioned under chapter 311, Laws of 2008;
     (2) Identify those proposals in the study predicted to significantly lower overall costs and cover the largest percentage of uninsured individuals;
     (3) Examine each proposal using different funding scenarios and, based on those scenarios, identify one proposal best suited to meet the health care needs of Washingtonians. The selected proposal may include elements from other proposals and shall be consistent with any health care reform legislation passed by congress;
     (4) Make recommendations regarding the consolidation of the state's purchasing of health coverage into a smaller number of pools as part of the implementation of the selected proposal;
     (5) Refer the selected proposal and any recommendations to the appropriate committees of the legislature to be considered for legislative action; and
     (6) Work with the state's congressional delegation to seek federal flexibility needed to assist the state to implement the selected proposal.