Health Benefit Exchange Board Chair Margaret Stanley (left front) and CEO Richard Onizuka confer during a break.

At the October meeting of the Health Benefit Exchange (HBE) Board, Barb Flye from the Office of the Insurance (OIC) warned that federal health care reform will create health insurance “premium shock in 2014.”

Well, it’s already started. OIC recently approved a 22.75 percent increase beginning in 2013 for the LifeWise Health Plan, one of the largest individual plans in Washington State. Though there are many unrelated reasons for the increase, LifeWise officials have been warning for several years that this is just the beginning. Federal reform holds great promise, they say, but at the same time someone has to pay for the new “free benefits” and design problems.

On Friday at the November meeting of the board the focus shifted to the backlash from legislators and small businesses alike regarding the proposed HBE budget of over $50 million per year. It’s taking almost $200 million in grants now, and by 2015 $50 million per year, to develop and run an outreach and web-based marketing program whereby small businesses and individuals will be able to buy insurance and determine if they qualify for subsidies (Washington residents will also still be able to buy insurance outside the HBE).

Even as the board discussed a required legislative report on how to pay for the exchange, Chair Margaret Stanley made it clear the report does not tie the board’s hands. “It is appropriate to change the budget,” she said.

As approved, subject to final technical changes, the legislative report recommends three funding options — a new premium tax on all health insurance plans in the state, an assessment on carriers that sell plans inside the exchange, or a combination.

According to the report, the assessment under all three options would be applied to participating carrier plans outside the HBE. Strangely, the staff did not bring up the request at the last Operations Committee meeting to determine whether a 2/3 vote would be required in the Legislature or whether an assessment could be designed that did not apply to any plans outside the HBE.

The report also includes a lengthy justification for the proposed budget. The report is due to the Legislature on December 1.

Earlier in the meeting the Board discussed federal delays in publishing guidelines and developing required information systems, with OIC expressing concerns as to whether state implementation deadlines could be met.

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