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Originally published January 27, 2013 at 8:03 PM | Page modified January 27, 2013 at 8:03 PM

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State legislators study expanding Medicaid

The extra coverage comes at federal expense for the first three years, and in the early years Washington comes out ahead. But some Republicans worry the state will later be saddled with a hefty bill as federal budgets shrink.

The Olympian

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Washington state officials are moving ahead quickly to set up a new health-insurance marketplace where the uninsured can start buying health plans later this year.

But one other major element of Obamacare — the expansion of Medicaid to cover more of the state’s poorest people — is getting a close look in the Legislature.

About 250,000 low-income adults in the state would become eligible for coverage under the Affordable Care Act if Washington fully expands the program.

The expansion is one of the changes prompted by the federal health-care act that could eventually provide for care to more than 800,000 of the state’s 1.1 million uninsured, state Insurance Commissioner Mike Kreidler said.

The extra coverage comes at federal expense for the first three years, and in the early years Washington comes out ahead. But some Republicans worry the state will later be saddled with a hefty bill as federal budgets shrink.

The debate is happening as Washington’s Health Benefit Exchange is moving ahead.

The exchange, a marketplace for policies that would give families a choice of private health plans similar to what workers at major companies already are offered, starts signing up consumers to buy private policies starting Oct. 1.

“We’ve got a lot to do” before then, said Richard Onizuka, chief executive r for the Health Benefit Exchange.

But he is confident the new exchange can hit its target dates for approving eligible health plans, starting a call center for consumers and informing the public of the big changes that lie ahead.

Just last week, the exchange moved to a new website separate from the state’s Health Care Authority. The exchange’s staff is getting new email addresses this week, marking the final break between government and the new private agency that will operate in part with public dollars.

Like the Medicaid expansion, the exchange also is dogged by concerns about costs, with some lawmakers questioning its budget of $50 million a year.

When state lawmakers set up the exchange in 2012, they gave its board the ability to levy a premium fee on insurers that take part.

Onizuka said last week that a 4 percent fee, worth $13.69 per policy per month, would raise enough money to cover the exchange’s budget once the federal startup grant runs out in 2015.

Or the exchange could tap the $26 million yearly windfall the state expects from an existing premium tax once more people buy insurance, he said. That would allow the premium surcharge to be cut in half.

Onizuka anticipates 130,000 of the state’s 1.1 million uninsured residents will use the exchange in the last quarter of the year, giving them coverage effective Jan. 1 next year.

The exchange also can route Medicaid-eligible consumers into that program instead.

Currently, Medicaid excludes single adults, focusing only on those who are elderly, disabled and who have kids.

But the expansion would allow single adults to qualify with incomes of up to $15,000 a year, or about 138 percent of the federal poverty line.

The federal government is covering costs for all people who become newly eligible for Medicaid in 2014-15. The state share would rise after that, topping out at 10 percent of costs in 2020.

But some Republicans and their allies in the Legislature worry that the state might be saddled with a big bill in later years.

“Let’s face it: They’re broke back in D.C., and if people think this 90-10 split is going to go in perpetuity, the dollars just aren’t there,” Sen. Rodney Tom, a Democrat who leads the mostly Republican governing coalition in the Senate, told reporters late last week. “And so what happens if that goes to a 50-50 or they pull the rug entirely?”

But I Kreidler, some Democratic lawmakers and groups such as the AARP and the Washington State Hospital Association see Medicaid expansion as no-lose, at least in the short term.

That’s because the state gets a net gain of funding in the first biennium — including more federal support for the working poor on the Basic Health Plan and unemployable adults on Disability Lifeline — if the Medicaid population grows to include adults who are poor, without kids and not disabled.

In the short term, the Affordable Care Act saves the state $140 million if Medicaid is expanded, according to state budget estimates.

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