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April 2010 St@teside

Federal Health Care Reform Takes to the States: Washington State Snapshot

Given that much of the implementation work for H.R. 3590, the Patient Protection and Affordable Care Act (PPACA), will fall on states, there has been a lot of discussion surrounding the level of readiness among the states.  Clearly, there is a varying range given some states’ desire to challenge the constitutionality of the health care law, while other states have passed executive orders to put statewide governance structures in place that will serve as central clearinghouses for health care reform efforts (see previous article). SCI is interested in exploring not only the readiness of states, but examining how structures already in place may facilitate the implementation process.

In early April, Washington State Governor Chris Gregoire announced that the creation of a “health cabinet” would be among the first steps taken by the state.  The cabinet will work to ensure that existing state programs align with the new federal law so as to maximize federal funds available to the state.  Additionally, in an effort to improve quality and decrease costs, state departments and programs which currently buy health care services separately from one another will be consolidated into larger purchasing entities.  For example, the Medicaid program and the state’s Health Care Authority will be combined.  The Health Care Authority buys health care for state employees and for recipients of the Basic Health Plan, a state-subsidized coverage program for the working poor.  The Health Care Authority will oversee those changes.

Other areas where Washington may be better prepared than many other states include:

  • A health insurance exchange:  In 2007, state legislators created a program to help small-business employees obtain insurance through an insurance exchange known as the Health Insurance Partnership.  Though this program was forced to close due to the state’s budget crisis, Washington recently received a $34.7 million federal grant from the HRSA State Health Access Program (SHAP) which will enable the program to reopen on Sept. 1, 2010 with coverage beginning Jan. 1, 2011.
  • A high-risk pool:  The state already has experience running a high-risk pool to cover sick people who were not able to get coverage in the regular insurance market.  The state estimates it will receive up to $30 million per year to expand its high-risk pool (WSHIP) and reduce premiums for uninsured people with pre-existing conditions.
  • Direct negotiation with insurers:  The new federal law gives states the ability to negotiate directly with insurers, which Washington has experience doing—the state already negotiates directly for its Basic Health Plan.
  • Insurance regulations:  Washington already sets premiums for individual policies based on broad age ranges (rather than having many different age rating bands) and bars cancellations by insurance companies for illness.
  • Accountable care:  In the area of delivery systems reform, the federal law focuses heavily on improving prevention and achieving better patient outcomes.  In late March, a bill passed in Washington (SB 6522) that establishes Accountable Care Organization (ACO) pilot projects.  The pilots are designed to create new incentives in the delivery system to further the goals of increased quality, accessibility, and affordability.  The Congressional Budget Office has found ACOs to be one of the few comprehensive reform models that can produce reliably reduced costs.

While state officials in Washington are working feverishly to prepare the state for years of federal health care reform activity, there is still much that remains unclear.  For example, according to Richard Onizuka, health care policy director at the state’s Health Care Authority, it is too early to know how the Basic Health Plan is going to fit with a Medicaid expansion and with future plans for a state health insurance exchange.

The federal law will open access to Medicaid for 411,076 newly eligible Washingtonians by expanding eligibility to non-elderly parents, childless adults, children, and pregnant women with incomes up to 133 percent of the federal poverty level.  The federal government will fully fund the cost of covering these newly eligible individuals for three years and will pay 90 percent of these costs after 2020, compared to the current contribution in Washington of 50.1 percent of costs. In total, Washington could receive $3.9 billion in federal funding during just the first five years of this coverage expansion. 

Though Washington has worked in recent years to combat the shortage of primary care providers through measures such as expanding the scope of practice for nurse practitioners, Onizuka agrees with other state health officials that there will have to be considerable effort exerted in this area to ensure that a coverage expansion translates into greater access to high quality care.


Conversation with Richard Onizuka, Health Care Policy Director, Washington Health Care Authority

Ostrom, C.M. “Gregoire creating ‘health cabinet,’” The Seattle Times, April 2, 2010.

Ostrom, C.M. “Washington ‘a step ahead’ of health law,” The Seattle Times, April 2, 2010.

Ranker, K.  Health Care Reform Update, Washington State Senate Democrats Blog, March 29, 2010.