U.S. plan a 'win' for state Health Reform: $180 million may come in '11

By:  Brad Shannon
Source: The Olympian

U.S. Sen. Maria Cantwell said Monday that the federal health reform package could send up to $180 million in extra aid to Washington state for its "model" Basic Health Plan.

The infusion of money, which might come as soon as next year, would cover two-thirds of the Basic Health Plan cost to provide subsidized health insurance to low-income working people. It also could help lawmakers who are stuck at the Capitol in a special session, trying to write budget and tax plans to bridge a nearly $2.8 billion budget gap.

Gov. Chris Gregoire joined a state Capitol news conference with Cantwell and Democratic leaders of the state Legislature on Monday, but said she is not yet sure how much the state can bank on. The state’s application for a waiver from the federal government is ready to go and, once approved, would qualify Washington for additional aid under the reforms President Barack Obama signed into law last week, Gregoire said.

“This relief benefits our taxpayers and it benefits those who are without health insurance today,” Gregoire said. “It is long overdue that we had a partnership with the federal government.”

The reforms and requested waivers would qualify the state for matching money for both its Basic Health and the General Assistance Unemployed program, which gives temporary aid to people who have disabilities, the Democratic governor said.

“This is a huge win for Washington state,” Cantwell, the second-term Democrat, said in a statement issued for the news conference. “With this bridge funding, we’ll be able to keep thousands of Washingtonians on Basic Health. And in 2014, the program will be fully funded and available for other states to replicate, so they too can realize the cost savings and expand coverage to those who cannot afford it.”

Cantwell’s statement said the Basic Health Plan could receive about $180 million starting early next year, with additional funding after 2014 that lets its enrollment triple to about 200,000 people.

News of the aid comes as state lawmakers struggle to finish a supplemental budget to pay for state programs through June 2011. The House and Senate have been focused on an $800 million tax plan that is designed to limit cuts to education, college financial aid, and to keep Basic Health alive long enough for federal aid to kick in.

In the short term, House Speaker Frank Chopp said he thinks the approval of a federal waiver by the Obama administration, with which the state has a good working relationship, gives state lawmakers a basis to count on the additional money in its supplemental budget.

But Chopp, a Seattle Democrat, said House and Senate lawmakers have just started talking about what share of newly expected federal aid, if any, they can write into the supplemental budget.

The special session began March 15 and can run 30 days by law, unless Democrats who control the state House and Senate can broker agreements on taxation sooner.

Senate Majority Leader Lisa Brown, D-Spokane, said the House and Senate remain $200 million apart on a tax package – with the Senate favoring a sales tax to raise that amount, while the House proposes a variety of closed tax loopholes or new taxes to make up that difference. But each chamber has had trouble finding votes for the other’s proposals.

State Republicans have argued for a no-new-taxes budget, including cuts to the Basic Health Plan. Republican Rep. Gary Alexander of Thurston County has argued that the state should close the Basic Health Plan if it could not be financed in part with federal aid.

Cuts to the Basic Health Plan by Democrats have already lowered its coverage to about 65,000 people, down from more than 100,000 last year.

For Cantwell, getting money for the Basic Health Plan is a victory. Cantwell played a key role in amending the Senate reform bill when it was in the finance committee so that programs such as the Basic Health Plan could be considered a model – and that opens the door to additional state aid for early implementation of national reforms.

She said the Basic Health Plan is considered a national model because it eliminates some 30 percent of wasteful costs of administering plans. The senator said efficiency comes through a managed-care model that pays more for results than just procedures – allowing a typical individual plan to be offered at a cost of $4,100 compared to the $5,850 she estimates the same plan would cost in the private market.

Cantwell also had a role in fixing the historic problem of smaller Medicare reimbursements to doctors and other providers in Washington than in other states; Washington got less, partly because of the state’s more efficient use of medical dollars.

Under federal health reform, Medicaid eligibility would rise to 133 percent of the poverty line, covering thousands of additional people with incomes of up to $30,000 for a family of four, according to Gregoire. And the additional federal Basic Health Plan money could help the state provide coverage in that program to those with incomes up to 200 percent of the poverty line.

Putting money into the Basic Health Plan has a ripple effect in the state’s care system for those on low incomes. That is because a majority of Basic Health Plan enrollees receive care through community health clinics, which rely on Basic Health Plan payments for a large share of their cash flow and to sustain their clinics at a certain affordable size.

Gregoire said she spoke with federal Health and Human Services Secretary Kathleen Sebelius last Thursday. Gregoire aides say Washington appears to be first in line for money under the waiver protocol of the health reforms.

Gregoire also said that under reforms, 92,000 small businesses could get tax credits later this year for providing health insurance to workers, young adults could stay on their parents’ health plans until age 26, and seniors in Medicare could see some of the prescription-drug coverage gap closed.

Democrats across the country have been working hard to tout the benefits of reform as Republicans, energized by lawsuits by attorneys general in 13 states including Washington’s Rob McKenna, seek to overturn it legally. The news conference included Gregoire, Majority Leader Brown, Speaker Chopp and two Democratic lawmakers that played a key role on health issues, Rep. Eileen Cody of West Seattle and Sen. Karen Keiser of Kent.