FINAL BILL REPORT

2SHB 477

                                  C 5 L 87 E1

BYHouse Committee on Ways & Means (originally sponsored by Representatives J. King, Brooks, McMullen, Crane, Appelwick, Brekke, Lux, Locke, Grimm, Wang, Unsoeld, Jacobsen, Moyer, Leonard, Sprenkle and Todd)

Enacting the health care access act of 1987.

House Committe on Health Care

Rereferred House Committee on Ways & Means

Senate Committee on Ways & Means

SYNOPSIS AS ENACTED

BACKGROUND:

The purpose of this measure is to establish a basic health care plan.  Many Washington residents under the age of 65 years do not have health care coverage.  Recognizing this concern, the legislature, in 1986, created the Washington Health Project Commission.  The commission's major responsibilities were to identify and describe the number of persons uninsured in the state; propose approaches to meet this need; and recommend ways to fund the cost.  The commission submitted its report to the legislature on December 1, 1986.

The commission found that a significant segment of Washington's population does not have access to affordable health care insurance or other coverage.  This group includes not only the unemployed and injured workers who have often lost access to health insurance in the workplace, but also an increasing number of employed individuals who do not have health care coverage through their employer.  Health care for this group of uninsured persons is often provided in hospital emergency rooms or in the offices of health care providers, in many cases at the expense of other consumers and their third-party payers.

The commission estimated that 720,000 persons under the age of 65 in Washington do not have health insurance.  The uninsured are largely young (37 percent are children, and half are under age 25), white (90 percent), and employed (41 percent are employed full time, an additional 14 percent work part time).  Of that total, approximately 410,000 have gross family incomes below 200 percent of the federal poverty level.  A telephone survey conducted for the commission indicated that low-income individuals are very interested in a state-sponsored basic health plan that covers ambulatory, hospital and emergency care.  Nearly 90 percent of those surveyed expressed interest in enrolling in the plan.  According to the empirical literature, this finding suggests that 40 percent would actually enroll.  Of these, 96 percent could pay an average of $28 per household per month for basic health plan coverage.

SUMMARY:

The Washington Basic Health Plan is established as an independent agency, governed by an administrator appointed by the governor, with the consent of the Senate.  The Basic Health Plan Trust Account in the State Treasury is the depository for plan funds.  A maximum of seven exempt staff positions are provided, including the administrator and medical director.  The administrator is required to appoint at least one technical advisory committee.

The administrator is responsible for designing a schedule of basic health care benefits with a separate schedule and payment structure for those eligible individuals who choose to enroll only their dependent children, age 18 and under.

Periodic premiums from enrollees must be based on gross family income.  A system of nominal co-payments and coinsurance schedules is required to discourage inappropriate use of services.

The cost of the delivery of basic health care services to enrollees will be subsidized with funds from the Basic Health Plan Trust Account.  Only those enrollees below 200 percent of the federal poverty level are eligible for any subsidy.  Enrollees may continue in the plan if their income rises above 200 percent of poverty, but they must then pay full premiums and no funds from the Trust Account can be used to subsidize their costs.  An enrollee with gross income above 200 percent of the federal poverty level for six consecutive months is no longer eligible for the program.

The plan may, after July 1, 1988, enroll up to 30,000 individuals eligible for subsidies who:  (1) are all under the age of 65; (2) are residents of an area served by the plan; (3) have gross family income not exceeding 200 percent of the federal poverty level; (4) choose to obtain basic health care coverage from a particular managed health care system participating in the plan; and (5) remain current in payment of premiums.

The plan will be offered in sites in at least five congressional districts.  At least one site will be a case management/coinsurance site with:  nominal premiums; a modified fee for service schedule; a coinsurance schedule based upon specific procedures and ability of enrollees to pay; and a patient/doctor relationship that maximizes patient involvement in health care decision-making, including awareness of the incentives and disincentives in using the health care plan.

A standard procedure is established for negotiation of participation agreements with managed health care systems.  The administrator is to consider and make suitable allowance for the need for health care services and the differences in local availability of health care resources, along with other resources, within and among different areas of the state.  The administrator is expected to seek multiple participation agreements to allow enrollees a choice between two or more managed health care systems.

A managed health care system (MHCS) is defined as any organization of health care providers that agrees to deliver, directly or by contract, the schedule of basic health care services defined by the administrator.  MHCS's could include existing health maintenance organizations or any group of health care providers. Participating systems may not discriminate on the basis of health status, sex, race, ethnicity or religion.  MHCS's may only offer coverage that is established by the plan.

The administrator is required to adopt a schedule for making the plan available to residents of the state and for the orderly delivery of services.

The administrator may contract with public or private agencies, including health care service contractors, for administrative services necessary for operation of the plan.  The administrator may also contract with such agencies for assistance in benefit design or in monitoring services rendered under the plan, or for technical and professional assistance to health care providers in forming managed health care systems.

The Employment Security Department, the Department of Labor and Industries and the Department of Social and Health Services (DSHS) are required to cooperate in the operation of the plan and to inform any unemployed workers, injured workers and unsuccessful applicants for DSHS medical assistance that the plan may be available.  The administrator must monitor access to necessary health care services and make recommendations as he or she deems appropriate to the legislature.

The benefit package, based upon the recommendations of the Washington Health Project Commission, includes no dental care, nominal co-payments of $10 per office visit, $5 for medication and $25 for inappropriate emergency room use, and a 25 percent discount from the traditional fee for service system.  The schedule of service includes physician services, inpatient and outpatient hospital services and other services that may be necessary for basic health care.  The schedule emphasizes preventive and primary health care, and includes all services necessary for prenatal, postnatal and well-child care.  Provision is made for coordination of benefits when any enrollee health care costs may also be covered by other insurance, such as third party coverage of auto accidents.

A grant program is established for regional hospitals with tertiary care facilities providing up to 250 percent of the average charity care rate or hospitals having medical assistance charges exceeding 20 percent of the facility's total rate setting revenue from the prior calendar year.  DSHS is directed to seek medicaid matching funds to the maximum extent allowable.

The date by which DSHS must expand its managed medicaid program is moved from 1991 to 1989.  The basic health plan is subject to sunset review in 1992.

VOTES ON FINAL PASSAGE:

Regular Session

      House 73  18

      Senate    42     4(Senate amended)

      House       (House refused)

First Special Session

      House 83  10

      Senate    37     7(Senate amended)

      Senate    36     8(Senate amended)

      House 86   8(House concurred)

EFFECTIVE:August 20, 1987