Virtual Conversation | Recapping the 2021 Session: Legislative Republicans, May 18, 2021 Register

Senate bill to increase the affordability of standardized health plans heard in House Health Committee

Senate Bill 5377 had its first hearing in the House Health Care and Wellness Committee on Wednesday, after moving out of the Senate on Mar. 2nd. This bill, sponsored by Sen. David Frockt (D – Seattle), aims to increase the affordability of standardized plans on the individual market. 

Specifically, this bill would establish a state premium assistance and cost-sharing reduction program for qualified health plans that are purchased through the Washington Health Benefit Exchange. It would also establish requirements on standardized plans offered through the Exchange, including limiting the number of nonstandardized plans that may be offered by a health carrier. 

Pam MacEwen, CEO of the Washington Health Benefit Exchange, testified in support of the bill. She said that this bill addresses one of the chief concerns of the Exchange, and helps strengthen Cascade Care.

I want to remind you that affordability remains the largest concern for exchange customers. That’s generally what people tell us when they leave the exchange.”

The bill would also establish participation requirements for certain hospital systems regarding state-procured qualified health plans offered through the Exchange. Frockt said getting hospital involvement in the original Cascade Care bill has been hard.

But a major problem that they had in the course of this contracting environment, because we didn’t have enough carrots and sticks in the bill [Cascade care bill], was that several of the major hospital systems and some of the biggest ones in the state simply refused to participate. And we’ve got to have this market which is so vital to 200,000 people … They have to have options to look at these plans in every corner of the state and we don’t have that. So Section 5 of the bill is designed to improve the network coverage and ask our hospitals to participate in this, with protections that we’ve worked out with the hospital association and others and the plans to ensure that the negotiating is fair.”

In the Senate Floor Session, this bill passed with 30 votes in favor of the bill and 18 against, almost entirely along party lines, except for Sen. Ann Rivers (R – Vancouver). Rivers also managed to add an amendment to the bill that removed the authority for the exchange to request cost and quality of care data from carriers. 

This bill received testimony in support from Sue Birch, director of the Washington State Health Care Authority. She said this bill will help lower costs for Washingtonians.

Washingtonians are paying more and more for their health care. Rising costs are a growing burden for individual consumers, working families are struggling to keep up as health care spending crowds out other important priorities, like saving for retirement and children’s education. The number of uninsured is increasing, especially amongst communities of color and the working poor. We must address affordability now, and this bill provides us with an important step to do so.”

The Office of the Insurance Commissioner (OIC) asked that the committee and the House as a whole not change the language that limits the number of nonstandardized plans on the market. Jane Beyer, senior health policy advisor for OIC, said that because they expect more people to transfer to plans on the Exchange due to the federal expansion, the limit on non-standard plans would make the transition smoother.

We think this is especially important given the recent federal legislation. There are going to be folks that are migrating from off-Exchange to purchase on-Exchange because of being able to access more affordable coverage. And we like the idea of folks having a choice of plans so that the transition from off- to on-Exchange is more easily accomplished.”

Zach Snyder, a spokesperson for Regence Blue Shield, said Section 5 of the bill should be amended because it will not do enough to increase the affordability of plans.

In its current form, hospitals have the option to join Cascade Care, many of them told us flat out that they had no intention to join. Section 5 of the legislation before you today, which requires just the largest hospital systems in the state to contract with just two Cascade Care health plans of their choosing, will not help lower costs and increase availability of these plans across the state.”

Snyder said a way to improve this section would be to return to the language that was in the bill when it was introduced.

This would require any hospital that receives payment for services to SEBB [School Employees Benefits Board] and PEBB [Public Employees Benefits Board] health plan to contract with the Cascade Care health plan.”

Chris Bandoli, a spokesperson for the Washington Association of Health Plans, echoed Synder’s concerns and said that this section “misunderstands how carriers and providers work together.”

With regards to Section 5, we certainly support the intent of that section but think it probably misunderstands the way that carriers and providers work together and could cause more problems than it solves down the line. So we would encourage more thoughtful conversation on how to approach that issue moving forward.”

Kathryn Lewandowsky, chair of Whole Washington, testified in opposition to the bill. She said Whole Washington cannot support an option that subsidizes plans in a for profit health care system.

The percent of health care in 2017 that was paid by taxpayers is 54.1%, while the percent that is paid by employers is 40.4%. So in order to move to a single-payer, comprehensive universal health care system such as Option A, recommended by your own advisory task force, we would only need to cover an additional 5.5% of our residents. We the taxpayers can not endorse continuing to subsidize a for-profit health care system that is proven to be unsustainable during this pandemic.”

This bill is scheduled for executive session on Mar. 24 at 8:00 AM.

This bill has been cross-posted on our sister site State of Reform.

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