Washington is gearing up to begin implementing the federal health reform law, and several kinds of people who lack adequate health coverage will reap benefits soon.
Among them are people who suffer from a serious health problem, lack employer-provided health coverage and can’t buy a private policy at any price.
Under the Patient Protection and Affordable Care Act, many states — including Washington — will create new federally funded high-risk insurance pools by July 1. These pools will cover uninsured people with urgent medical conditions until 2014, when they will be able to enroll in new state-run health insurance exchanges.
States can refuse to create the pools, as Georgia and 18 other states have done. In those cases, the federal government will step in.
Congress appropriated just $5 billion to fund the program through Jan. 1, 2014 — not enough, critics say, to extend coverage to more than a tiny percentage of the 5.6 million to 7 million Americans with pre-existing conditions who qualify for help.
The $102 million Washington will receive has to last three and a half years, until the new exchanges kick in. Only those who have been uninsured for six months and have a preexisting condition will be eligible.
But state Sen. Karen Keiser, D-Kent, who chairs the Senate Health and Long-Term Care Committee, said that $102 million will make a huge difference.
The federal money “will be much more than a drop in the bucket,” she said. “Thousands of people will be able to be insured who can’t get insurance now.”
Washington already has a high-risk pool. Last year it covered 3,578 people with serious health problems at a cost of $71.1 million, paid for by insurance premiums and an assessment on private insurance companies.
The state requires everyone who applies for individual health insurance policies to take a health screening test, said Stephanie Marquis, spokeswoman for the Office of the Insurance Commissioner. “The 8 percent who are the sickest go into the pool,” she said.
The coverage isn’t cheap. Those covered pay “about 100 percent of the cost of private insurance,” Marquis said. “But it guarantees they can get insurance, and it provides very good benefits.”
In the meantime, other changes are coming this year:
After Sept. 23, when an individual or employer-sponsored health plan comes up for renewal, that plan may no longer charge out-of-pocket costs for preventive services such as mammograms; may not cap lifetime benefits; may not cancel or rescind a policy except in case of fraud or misrepresentation; and may not refuse to cover preexisting conditions for enrollees under age 19.
That sounds clear-cut, but the health reform bill includes a grandfather clause that has caused confusion. It was written into the bill to fulfill President Barack Obama’s promise that those who like their current health insurance coverage will be able to keep it.
“Depending on what type of plan you have and when it went into effect, your plan is grandfathered,” Marquis said. Plans in existence before March 23 of this year may continue to charge out-of-pocket payments for preventive care, cap lifetime benefits and refuse to cover a child’s preexisting conditions, she said. However, any new plan must comply with requirements of the law.
The question is, how much can a plan change without giving up its grandfathered status?
The law leaves it to regulators to decide. And some see this as a huge loophole. Large employers may claim the freedom to make routine changes in their plans from year to year without meeting the law’s full requirements. Consumer advocates warn that the “grandfather” clause could prevent many consumers from reaping the benefits of the new standards.
“The devil’s in the details,” Keiser said, adding that regulators will be required to follow legislative intent.
Young adults covered
Also beginning Sept. 23, insurance companies must cover young adults up to age 26 under their parents’ family policies unless they get a job that offers health insurance.
That’s not a big change in Washington, where a law passed three years ago requires coverage of young adults up to age 25. However, that law did not apply to all plans, Keiser said. “This will expand it.”
Kaiser Permanente, Regence and other large insurers that have implemented the new law for their small-group and individual plans “found it was very cost-effective and did not lead to a great increase in expenses,” Keiser said, probably because most young adults are relatively healthy and don’t suffer from chronic diseases.
Some insurance companies have notified the state that they plan to extend coverage to young adults even before Sept. 23, Marquis said, “so they won’t age out” of their family policies.
Small businesses
This year, for the first time, small businesses in Washington will be able claim a tax credit equal to 35 percent of the cost of the health benefits they provide employees.
The credit, effective for the 2010 tax year, will apply to businesses with fewer than 25 full-time employees in companies where the average annual wage is less than $50,000 if the employer pays at least 50 percent of the health care premium.
Beginning in January, businesses also will be able to take advantage of a long-awaited “mini-exchange” called the Health Insurance Partnership, authorized but not funded by the Legislature several years ago.
Businesses with up to 50 employees, including sole proprietorships, will be able to enroll their workers in a health care exchange with a menu of policies to choose from and state-subsidized premiums for low-income workers. The program is intended to help small-business owners who are priced out of the expensive group health plan market.
Primary care
A new 10-member panel created by the Legislature to oversee health care reform in Washington had its first meeting Wednesday. New state laws may have to be enacted and policies changed to implement the federal reforms.
Addressing health-care work force shortages is a top state priority, Keiser said. The reform legislation offers state grants to boost professional training of primary care physicians, physician assistants, registered nurses and other providers, with the goal of building health provider teams capable of coordinating efficient and cost-effective care.
“Quite a few grants are funded in the bill,” Keiser said.
The federal law also expands Medicaid to low-income childless adults, a group that has fallen through the holes in the safety net until now.
Under the bill, childless adults with an income up to 133 percent of the poverty level ($14,390 in 2010) will be eligible for Medicaid, the government insurance program for the poor.
In addition, “We’re asking for a waiver from the federal government to expand (Medicaid coverage) to our entire Basic Health Plan,” Kaiser said. Currently, the income cutoff for Basic Health, the state’s program for the working poor, is 200 percent of the federal poverty level. Over the past two years, the state has cut enrollment in the plan by 42 percent in the face of a $12 billion state budget deficit.
“If we can get that waiver, we can begin to enroll people in the Basic Health Plan again,” Keiser said.
Beginning in 2014, major pieces of the federal reform bill will fall into place. Insurance companies will be legally prohibited from denying coverage to people with pre-existing conditions, and every state will have to offer a health care exchange to provide coverage to people who have none.
For Keiser and other state officials who have struggled to address health care reform at the state level in a time of yawning budget shortfalls, the federal help that is starting to arrive is welcome indeed.
“It’s happening so fast, it’s mind-boggling,” Keiser said, “after years of slogging through.”
Kathie Durbin: 360-735-4523 or kathie.durbin@columbian.com.
