Through Washington's Health Benefit Exchange (Exchange), individuals may compare and purchase individual health coverage and access premium subsidies and cost-sharing reductions. Federal premium subsidies are available to individuals whose income is between 100 and 400 percent of the federal poverty level. Cost-sharing reductions are available to individuals whose income is between 100 and 250 percent of the federal poverty level.
Only health plans certified by the Exchange as qualified health plans (QHPs) may be offered on the Exchange. QHPs must be offered by licensed carriers and must meet requirements generally applicable to all individual market health plans, including offering the essential health benefits, having their premium rates reviewed and approved by the insurance commissioner, and meeting network adequacy requirements.
In 2019, the Legislature passed ESSB 5526, which created standardized health plans on the Exchange. The Exchange, in consultation with the Health Care Authority (HCA) designed standardized plans at the bronze, silver, and gold metal tiers. The standardized plans are designed to reduce deductibles, make more services available before the deductible, provide predictable cost sharing, maximize subsidies, limit adverse premium impacts, and encourage choice based on value, while limiting increases in health plan premium rates.
Beginning on January 1, 2021, any health carrier offering a QHP on the Exchange must offer one standardized silver plan and one standardized gold plan on the Exchange. If a health carrier offers a bronze plan on the Exchange, it must offer one bronze standardized plan on the Exchange. Carriers may continue to offer non-standardized plans on the Exchange, but a non-standardized silver plan may not have an actuarial value less than the actuarial value of the silver standardized plan with the lowest actuarial value.
ESSB 5526 also established state-procured QHPs, or public option plans. These plans are standardized plans that must meet additional participation requirements to reduce barriers to maintaining and improving health and align to state agency value-based purchasing, including standards for population health management, high value and proven care, health equity, primary care, care coordination and chronic disease management, wellness and prevention, prevention of wasteful and harmful care, and patient engagement.
The total amount a public option plan reimburses providers and facilities for all covered benefits in the statewide aggregate, excluding pharmacy benefits, may not exceed 160 percent of the total amount Medicare would have reimbursed providers and facilities for the same or similar services in the statewide aggregate. Beginning in 2023, the director of HCA, in consultation with the Exchange, may waive the Medicare reimbursement requirement if HCA determines selective contracting will result in actuarially sound premium rates that are no greater than the plan's previous plan year rates adjusted for inflation using the consumer price index. The public option plan's reimbursement rates for critical access hospitals and sole community hospitals may not be less than 101 percent of allowable costs.
The Exchange, in consultation with HCA and the commissioner, was required to develop a plan to implement and fund premium subsidies for individuals whose modified adjusted gross incomes are less than 500 percent of the federal poverty level and who are purchasing individual market coverage on the Exchange. In 2020, the Exchange released its report on premium subsidies, recommending a fixed dollar subsidy program and providing analysis and modeling for a $200 million, $150 million, and $100 million program.
Premium and Cost-Sharing Subsidies. Subject to the availability of amounts appropriated for this specific purpose, the Exchange must establish a premium assistance program, and it may establish a cost-sharing reduction program. The Exchange must establish subsidy amounts through a fair and transparent process and allow for public comment. The Exchange must establish the procedural requirements for eligibility and participation in the program and requirements for facilitating payments to carriers.
To be eligible for the program, an individual must:
Alternatively, eligibility criteria may be established in the budget.
The Exchange, in consultation with HCA and the Office of the Insurance Commissioner, must explore all opportunities to apply for federal waivers to:
The Exchange shall apply for waivers on behalf of the state and must comply with all federal notice and comment requirements
The state health care affordability account is created in the state treasury to hold funds for premium and cost sharing assistance programs. A carrier must accept payments for premium or cost-sharing assistance provided through the subsidies program and must clearly communicate premium assistance amounts to enrollees as part of the invoice and payment process.
Public Option Participation and Reimbursement. Beginning in plan year 2022, hospital systems that own or operate four or more hospitals in the state must contract with at least one public option plan of the hospital's choosing in each geographic rating area in which the hospital system operates a hospital.
A health carrier may not condition negotiations or participation in a health plan on the hospital's negotiation or participation in a public option plan.
HCA may adopt rules to ensure compliance with these provisions.
HCA's authority to waive the 160 percent of Medicare reimbursement benchmark requirement if it determines selective contracting will result in actuarially sound premium rates that are no greater than the plan's previous plan year rates, is repealed.
Cost and Quality of Care Data Collection. At the request of HCA or the Exchange, for monitoring, enforcement, or program and quality improvement activities, a public option plan must provide cost and quality of care information and data to HCA and the Exchange, and may not enter into an agreement with a provider or third party that would restrict the provision of this data. All submitted data is exempt from public disclosure.
Standardized and Non-Standardized Plans. Any carrier offering a QHP on the Exchange must offer the silver and gold standardized plans designed by the Exchange and if a carrier offers a bronze plan, it must offer the bronze standardized plans designed by the Exchange.
Beginning January 1, 2023, a health plan offering a standardized health plan on the Exchange may also offer up to two gold, two bronze, one silver, one platinum, and one catastrophic non-standardized health plan in each county where the carrier offers qualified health plans.
In the 2023 study on the impact of standardized health plans, the Exchange must include an analysis of offering a bronze standardized high deductible health plan compatible with a health savings account, and a gold standardized health plan closer in actuarial value to the silver standardized health plan.
The committee recommended a different version of the bill than what was heard. PRO: The original program is doing well with standard plans, but some additional adjustments are needed to make it work better for consumers. Subsidies would make coverage more affordable and premiums will be lower for everyone, even those who do not get subsidies. The state needs to offer an affordable coverage options for people who do not have other options for coverage. Lack of coverage causes people to leave needed but low paying jobs. Subsidies can be scaled up. Cost of premiums and out-of-pocket costs remain a main barrier for getting coverage and this bill will help address those barriers. Subsidies are an effective way to address affordability and can be implemented for next year's plan. HCA needs more tools to control costs for public option plans. Reasonable limits on plan numbers will make shopping for customers easier to understand. Consumers should have meaningful choice among standardized plans, including a high deductible plan. Many enrollees spend more than 10 percent of their income on health care premiums. Consumers close to the cutoff for federal subsidies have a hard time affording coverage without that assistance. Customers need to understand what they are buying and Cascade Care makes that possible.
CON: This speeds up the timeline for reviewing participation that was negotiated in the original bill. Cutting revenues to hospitals from the commercial insurance market puts financial stability at risk. Hospitals must be able to negotiate a sufficient rate for public options plans. It is too soon to make changes and more stakeholder engagement is needed. Subsidies should be open to all Exchange plans. Standardized plans do not solve affordability issues. Reinsurance is another viable path for affordability that should be investigated. The bill provides too much authority to the Exchange without accountability. This bill relies on a fee for service model when it should be focused on a value based model. Subsidizing one sector of the market will result in higher costs elsewhere.