HEALTH CARE CRISIS

BACKGROUND -- America’s employer-based health insurance system is broken and the problem has reached a crisis stage.

Jobs that used to provide affordable health coverage are being replaced by jobs that either pay no benefits or shift a growing amount of health costs to workers. Companies that provide affordable health care coverage are finding themselves at a competitive disadvantage with employers who could, but don’t. As a result, more and more Washington families have been pushed into the ranks of the uninsured or underinsured. Uncompensated care is costing health insurance purchasers, including the state, significantly higher premiums and co-pays. Every year, our health care infrastructure is absorbing more than $550 million in costs as a result of uncompensated care, according to a 2006 report from the Office of the Insurance Commissioner.

The cost of this crisis is also being heavily shouldered by taxpayers. More working people are showing up on the roles of Washington’s taxpayer-subsidized Basic Health Plan, or their dependents end up qualifying for Medicaid. In effect, taxpayers are subsidizing businesses that can’t afford -- or choose not -- to provide adequate health care coverage.

Another key factor in the escalating cost of health care is the cost prescription drugs. As health benefits are whittled away, the number of Americans with prescription drug coverage is declining and uninsured families must pay far more for prescription drugs than their insured neighbors.

In 2003, legislation was approved to consolidate state purchasing of prescription drugs, creating a preferred drug list, and enabling the state to negotiate lower prices for bulk purchases. The program has since been expanded and has proven a significant success, saving the state tens of millions of dollars a year.

In summary, as Gov. Chris Gregoire noted in her 2007 State of the State address, "Good family-wage jobs are those that pay well and provide affordable health insurance. For many people in Washington, they fear they are a diagnosis away from bankruptcy. I know that many of the solutions to the health care crisis facing our nation must involve the federal government. But we have to step forward and find innovative solutions for Washingtonians."

LABOR’S POSITION -- The Washington State Labor Council supports national reform that creates affordable universal coverage for all Americans. The prospects for such reform have improved significantly with the election of Barack Obama. But in the meantime, the state government must move its own agenda to expand access to affordable coverage for Washington’s working families.

The WSLC is an active participant in the Healthy Washington Coalition, which includes groups representing unions, businesses, consumers, the health care industry and others, with the common goal of achieving secure, quality, affordable health care for all Washingtonians. Visit www.HealthyWACoalition.org for more information.

The WSLC supports requiring large employers whose employees are on taxpayer-subsidized health programs to pay the state for that coverage unless they meet a minimum standard for providing employee health care. Large employers should not be allowed to abandon their employees and pass on enormous costs to the entire health care system. It’s not fair to employers that do the right thing and must compete with them, and it’s not fair to Washington taxpayers. Investing in employee health should be a requirement of doing business in Washington, whether that coverage is provided through the employer or the state.

The WSLC also supports legislation authorizing the re-importation of prescription drugs from Canada and/or other developed nations that pay far less for prescription drugs. Illinois and Minnesota have already passed such drug re-importation laws.

While innovative comprehensive efforts are under consideration by the State Legislature on how to fix our broken health care system, the WSLC also will strongly urge the governor and legislators to protect the health of people today. That means prioritizing existing health programs in the challenging 2009-11 biennial budget. Long-term stable funding for public health programs is too essential for all Washingtonians to be put on hold in the short term.

2005 -- SB 5637 and HB 1702, the Health Care Responsibility Act, would have employers of 50 or more workers to purchase 80% of the cost of basic coverage or pay a fee to help expand public insurance programs for the uninsured. Neither passed. 

-- HB 1486, the Health Care Disclosure bill, would have required state agencies to report on the employment status of enrollees in state-subsidized plans. It passed both houses, but was vetoed by Gov. Gregoire, who cited the ERISA implications of releasing employer data to the public.

2006 -- HB 2517 and SB 6356, the Fair Share Health Care bills, would have required employers of 5,000 or more to spend at least 9% of their payroll costs on health care or pay a fee to the state making up the difference, to be used to provide coverage for uninsured workers. Neither passed. 

-- HB 3079, the Health Care Disclosure Act, required the state to report on the employment status of enrollees in state-subsidized health plans. This new version addressed the concerns of Gov. Gregoire, who vetoed the 2006 version. It passed, and was signed into law. 

-- HB 2572, the Small Employer Health Partnership, offers premium assistance to small businesses’ employees who earn under 200% of the federal poverty level. It passed, and was signed into law.

2007 -- HB 2094, the Taxpayer Health Care Fairness Act, would have required employers with more than 1,000 workers to reimburse the state for the costs of their workers who are on tax-subsidized health plans. Although it died in committee, a work group was formed to prepare a report on HB 2094 and alternatives to promote health coverage for low-wage workers enrolled in state plans.

-- SB 5093 expanded health insurance coverage to all children whose families are at or below 250% of the federal poverty level, and effective January 2009, raising the threshold to 300%, subject to appropriation. It passed and was signed into law.

-- HB 1569 redefined and expanded the Small Employer Health Insurance Partnership created in 2006. Now called the Washington Health Insurance Partnership, it creates a "connector" program that, over time, aims to standardize insurance plans among providers in the state, creating a range of portable plans. It passed and was signed into law.

2008 -- SB 6333 hired a consultant to evaluate five different health reform proposals. In January 2009, the governor will appoint a Citizens Group on Health Care Reform to review the evaluation, engage in a process for public comment, and submit a final report by Nov. 1, 2010, making recommendations. It passed and was signed into law.

-- SB 6241 would have prohibited the sale or use of prescriber-identifiable prescription drug data by pharmaceutical companies for commercial or marketing purposes. It passed the Senate 26-22, but died in the House without a vote.

-- SB 5261 granted the Insurance Commissioner authority to review individual health benefit plan rates to ensure increases are justified and reasonable. It passed and was signed into law.

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