State decides to let higher health-care premiums do dirty work
Officials with Washington's Basic Health Plan are resorting to steep premium increases to achieve what they were loath to do on their own...
Seattle Times health reporter
What to expectPoorest members, those earning up to 125 percent of the poverty level: 100 percent boost in premiums, to $34, $45 or $60, depending on income.
Higher-income members, 125 to 200 percent of poverty level: 48 to 71 percent increase, in some cases to nearly $400 a month.
Annual deductibles also will increase for everyone, to $250 from $150.
Officials with Washington's Basic Health Plan are resorting to steep premium increases to achieve what they were loath to do on their own — expel thousands of working-class people from the cash-strapped state insurance program.
Ending weeks of deliberations, officials announced Monday that Basic Health's premiums will increase by an average of 70 percent on Jan. 1 as part of an ongoing strategy to boot 30,000 to 40,000 people off the taxpayer-subsidized plan, which covers roughly 100,000 members.
The bulk of the cuts will come from changes already under way. On top of that, officials are hoping that boosting premiums will prod 7,000 to 17,000 members to leave the plan on their own, sparing the state the need to kick off people involuntarily.
But even that punt may not force enough people to relinquish their coverage. Basic Health's membership turnover rate has fallen by half this year as laid-off workers and others hang onto their insurance.
"We don't know how many will leave, to be honest with you," said Steve Hill, administrator of Washington state Health Care Authority, which operates Basic Health, at a press conference at Sea Mar Community Health Center in Seattle's south end.
Monthly premiums for the poorest members — those earning up to 125 percent of the poverty level — will double to $34, $45 or $60, depending on income. Rates for higher-income members will jump by 48 percent to 71 percent, in some cases to nearly $400 a month for those 55 and older.
In all, average monthly rates for all members will rise to $61 from $36. Annual deductibles also will go up to $250 from $150.
Even with the increases next year, the state still would be picking up an average of 76 percent of the actual cost of coverage.
Because of the recession, the Legislature in April axed $255 million, or 43 percent, of Basic Health's budget for 2009-2011. That would leave enough money for 60,000 to 70,000 slots, depending on the level of subsidy for each member.
Hill and his advisers debated — and rejected — four other potential solutions as too arbitrary. They included a lottery, lowering income eligibility and kicking off members based on how long they'd been on the program.
Some 23,000 people could be gone before the new premiums take effect, Hill said.
On Monday, letters went out to 5,000 people who also are covered under Medicaid, the federal-state program for the poor, to notify them that their Basic Health coverage will be terminated Aug. 1. An additional 3,000 people who potentially qualify for Medicaid will be disenrolled later, Hill said.
An additional 8,600 people could be stripped of Basic Health coverage this year as officials tighten income verification. The rest will come from expected attrition, Hill said.
Officials passed on the contentious issue of restricting Basic Health only to citizens or legal residents. The program since its inception has been open to any Washington resident who earns less than twice the poverty level. Preston Cody, deputy administrator of the health-care agency, said the state Attorney General's Office advised that barring illegal immigrants could trigger lawsuits and that the matter should be best left to the Legislature.
House Republicans on Monday slammed the state for luring people into Basic Health and then "pricing people out." They offered an alternative plan that they say would shave the program's cost by more than half over two years.
Under the GOP plan, the biggest savings, $112 million, would come from barring anyone 19 to 34 from joining Basic Health and reducing the amount of subsidy for remaining members. The Republicans also propose dropping illegal immigrants, for an estimated savings of $16 million.
If the upcoming premium increases don't prompt enough members to vacate slots, Cody said officials may consider an asset test to limit eligibility. Currently, 4,100 people on Basic Health earn at least $1,200 a year in interest income, indicating substantial personal savings, he said. If too many people leave, Cody said new members can be drawn from the pool of 30,000 applicants now on the waiting list.
Hill said officials opted to increase rates with deep reluctance, knowing that even a modest increase can pose real hardship. Fifty-seven percent of the people on Basic Health have income below the poverty level, which is $10,830 for a single person.
The program began in 1989 as a pilot project specifically to provide affordable health coverage to people who earn too much to qualify for Medicaid.
"At least [premium increases] will give these families a choice" about whether to stay or go, Hill said.
But advocates for the poor warned that choice won't exist for some who already live on so little.
If forced to choose between groceries and rent or insurance, "they will take the risk of letting the coverage lapse," said Rebecca Kavoussi, director of public policy for Community Health Network of Washington, a network of nonprofit community-health centers that by federal law cannot turn away patients who can't pay.
Kavoussi predicted that the sickest members will fight hardest to stay on. That would make the pool more expensive for all members, Kavoussi said, which if it spirals out of control could make it affordable to no one.
Kyung Song: 206-464-2423 or firstname.lastname@example.org
Copyright © 2009 The Seattle Times Company
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