Washington Official Backs State-Run Plan

Published March 1, 2009

Washington state insurance commissioner Mike Kreidler has proposed a state-run health insurance plan for Washington residents not covered by Medicaid.

The proposal, called Guaranteed Health Benefits, was introduced in the legislature in January and is expected to be voted on during the spring legislative session.

‘Wrong Direction’

Health policy experts expressed concern about several flaws in the proposal.

“I think it’s a wrong direction,” said Steve Buckstein, founder and senior policy analyst at the Cascade Policy Institute in neighboring Portland, Oregon.

“We need to get the government out of health care,” Buckstein said. “In Canada, [on which] we base our idea of universal health care, people have to wait to see a physician, have surgery, or seek treatment, delays Americans with health insurance don’t face.”

Under Kreidler’s proposal, all Washington residents would receive coverage for vaccinations, regular physicals, dental visits, and cancer screenings, plus catastrophic coverage for procedures costing more than $10,000.

Kreidler says the plan will cost $6.5 billion per year. The state’s entire budget for FY 2009 is $17 billion, according to state figures.

To pay for the new program, the legislature would be asked to raise payroll taxes by 4 to 6 percentage points, with employees directly paying 1 percentage point of the increase and employers the rest. However, economists note the so-called employer contribution reduces workers’ salaried compensation to make up for the higher cost per employee caused by the tax increase.

‘Clearly Government-Controlled’

“Although the insurance commissioner is emphatic that this proposed health plan is ‘not controlled by government’ and should not be described as ‘government-run,’ our research shows otherwise,” said Dr. Roger Stark, a health care policy analyst for the Washington Policy Center.

Stark explained, “The plan calls for mandatory participation and mandatory funding through a payroll tax; a nine-member government board would set benefits and rates; the plan mandates preventive care; and the plan increases the state’s entitlement program, the Basic Health Plan, by requiring an eligibility increase from 200 to 300 percent of the Federal Poverty Level. Clearly, this is a government-controlled health plan that severely restricts patient access and choice.”

“This new health insurance mandate will increase costs and reduce access, especially for small businesses,” said Dann Mead Smith, president of the Washington Policy Center.

Smith continued, “Residents of Washington, which already has over 50 mandates on individual health insurance policies, are already feeling the effects of increased health care regulation—higher costs and more businesses that are being forced to not offer insurance to their employees, which increases the number of uninsured.

“Adding to that regulation—let alone putting government in control of the entire system—is not good policy,” Smith said.

If the legislature approves the proposal, Washington residents will be asked to vote on the plan in November.

Krystle Russin ([email protected]) writes from Texas.

For more information …

“The Guaranteed Health Benefits Plan: A major health care reform proposed by Insurance Commissioner Mike Kreidler,” Washington Policy Center: http://www.washingtonpolicy.org/Centers/healthcare/policynote/