SENATE BILL REPORT

ESHB 99

BYHouse Committee on Health Care (originally sponsored by Representatives Niemi, Cantwell, Vekich, Braddock, Fisch and Brekke)

Creating the Washington state health insurance pool.

House Committe on Health Care

Senate Committee on Financial Institutions

Senate Hearing Date(s):March 24, 1987; March 31, 1987

Majority Report:  Do pass as amended.

      Signed by Senators Moore, Chairman; Bender, Vice Chairman; Bottiger, Fleming, McDermott, Metcalf, von Reichbauer.

Minority Report:  Do not pass as amended.

      Signed by Senator Pullen.

Senate Staff:Stephanie Yates (786-7416)

                  April 3, 1987

AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS, MARCH 31, 1987

BACKGROUND:

In the state of Washington there are roughly 720,000 persons under the age of 65 who are uninsured.  Three hundred and ten thousand of that number have income in excess of 200 percent of the federal poverty level.  A subset of that group of people, estimated up to 30,000, do not have coverage because of denial for poor health or available coverage is very expensive with restrictive exclusions for existing conditions.

The Washington Health Care Project Commission, in its report outlining recommendations for a basic health plan, raised the need for "the creation of an insurance pool for the medically uninsurable with incomes over 200 percent of the poverty level."

SUMMARY:

A nonprofit comprehensive insurance pool is created that shall include all health insurers, health care service contractors, and health maintenance organizations.  Provisions include self-funded programs in the pool, if permitted by federal law in the future.

A board is created to develop an insurance pool plan to be submitted to the Insurance Commissioner for review and approval.

The board shall select a plan administrator through a competitive bid process.

Eligible persons shall be state residents who have been rejected for coverage, or have had related problems obtaining coverage within a six-month period prior to application.

The package of benefits are comprehensive including in-patient and out-patient care, drugs, nursing home care, etc.

The plan includes:  (1) two deductible options of $500 and $1,000, with related caps on out of pocket expenses; (2) coinsurance of 20 percent of benefits provided; (3) maximum coverage of $500,000; and (4) premiums set at 150 percent of the standard group rate set for groups up to ten persons.

Cost of providing care beyond premiums, deductibles, and co-payments collected are assessed among pool members on an per capita basis.

The bill exempts premiums of the pool from premium taxes and provides certain deductions of assessment from business and occupation (B&O) taxes.

Fiscal Note:      available

Effective Date:The bill contains an emergency clause and takes effect immediately.

SUMMARY OF PROPOSED SENATE AMENDMENT:

This is a striking amendment.

Vision care is excluded from the definition of health insurance.

Any group or individual disability insurer, health care service contractor, or health maintenance organization whose products are exclusively dental products is excluded from the definition of member.

Hospice services is added to the list of minimum benefits to be made available in a pool policy.

Provisions are added to:  (1) provide coverage for adopted children of the individual in whose name the pool policy is issued; (2) require that coverage continue after age 19 for dependents who are developmentally disabled or physically handicapped and who are chiefly reliant on the individual in whose name the policy is issued for support and maintenance;  (3) specify that when the individual in whose name the policy is issued becomes eligible for Medicare, dependents shall continue to receive coverage under the pool policy unless coverage is available under a different health plan; and (4) specify that dependents who become eligible for Medicare prior to the individual in whose name the policy is issued shall receive benefits according to the Medicare supplement plan set forth in the bill.

Senate Committee - Testified: Representative Janice Niemi; Joan Gaumer, Blue Cross and Health Plus; Lois Fink, Washington resident; Richard Horsman, American Diabetes Association; Colin Kippen, Seattle attorney, Government Relations Committee, American Diabetes Association; Darlene Burgess, Group Health Cooperative; Karl Knirk, American Diabetes Association, Seattle