February 6, 2011

Basic Health Plan on political life support

Manuel Valdes The Associated Press
 

OLYMPIA — The governor wants to cut it. Democrats want to save it. Republicans want to trim it.

The state’s health care program for the poor is on life support. Since 1987, the Basic Health Plan has survived through thick and thin and down economic times, but the state’s budget is struggling to sustain it now.

“I think this is unprecedented - the economic situation,” said Doug Porter, administrator of the Health Care Authority, the state agency that oversees the program. “The Basic Health program has enjoyed bipartisan support for decades. It definitely could still go under the knife; it’s one of the most precarious situations basic health has been in years.”

Four weeks after this year’s legislative session started, ideas are plenty on how to save the Basic Health Plan, which provides subsidized health care for 55,000 poor Washingtonians.

Democrat leaders, though, have come to one decision: They want to keep Basic Health alive until 2014 — the year the federal health care program is scheduled to start.

Getting the money to do that, though, is where the problem lies.

The state’s moribund economy is presenting lawmakers with a two-fold money problem: The state is in the red for this current fiscal year, with more than half a billion dollar deficit looming over the state until June, and they need to patch up that shortfall. Secondly, lawmakers are also working to close a projected about $5 billion gap in the next two-year budget. That $5 billion cut needs to come from 40 percent, or about $15 billion, of the total $37 billion state budget.

The result is a legislative session in which lawmakers are considering massive cuts to state departments, agencies and programs. The Basic Health Plan, which carries a two-year price tag of more than $230 million for the state, is one of the largest programs that lawmakers have to either cut or reduce.

From taxing plastic surgery to seeking private donations or asking voters for a new tax for Basic Health, ideas are being thrown around in Olympia to keep Basic Health alive.

“We’re very creative. We’re looking at all sorts of ideas,” said House Speaker Frank Chopp, D-Seattle. “The attitude toward this is very positive, saying ‘look there’s a way to have this transition happen and not just drop this program March 1st.’”

Gov. Chris Gregoire pushed to eliminate the program in her December budget proposal for the 2011-2013 biennium. Under that proposal, the entire program would be gone in March — 55,000 people would be dropped from program and the state would pocket the money. A non-subsidized program would be offered. The state would also lose federal money, about $100 million in matching funds.

“The governor’s proposed cuts were made very reluctantly,” said spokesman Scott Whiteaker. “If the Legislature has a viable proposal, she’ll definitely look at that and consider it.”

Several ideas have been put forward by legislators to both close the funding gap in this fiscal year and to keep the program alive for the next two.

One is to keep cutting. Democrats in the House and Senate, who hold majorities in both chambers, want to trim the program to serve about 40,000 people or less.

Gregoire has warned against this, saying that diluting the risk pool of people would make the program financially unsustainable. Under Basic Health, the state negotiates rates with a handful of insurance companies. If the risk pool is too small, insurance companies may not bite.

But Chopp said he has been told that 40,000 people is a big enough pool to sustain it.

Should this idea be the one that sticks, it would mean the continuing erosion of the Basic Health’s enrollment. The number of people enrolled has dropped from a high of 134,644 in 2003 to 55,614 this year. The biggest cuts came between 2009 and this year, in which more than 50,000 people were dropped to cut costs as the economy and the state budget went sour. Currently, a waiting list numbers at more than 140,000.

Porter said that the Senate proposal, released this past week, would weed out people who don’t qualify for federal standards of subsidized health care, mostly people who can’t prove American citizenship. The plan also calls for people eligible for Medicaid, a federal program, to be moved out of Basic Health.

“The Legislature is trying to avoid the elimination of the program, but like I said, we’re not there yet,” Porter said.

This past week, Rep. Eileen Cody, D-Seattle, chairwoman of the House’s Health Care & Wellness committee, unveiled a bill that proposes bankrolling Basic Health by cutting tax exemptions on plastic surgery, banks, private planes and power-plant coal. Cody said that she doesn’t think she’ll get enough support in both chambers to jump over the two-thirds super majority vote needed to approve new taxes.

“Do I believe I’ll ever see a two-thirds vote on this? No. But would I like to see us at least vote? Yes,” Cody said.

Another idea to bring in more federal money. The federal government for the first time pitched in money for Basic Health in 2011. Though a provision in the federal health care overhaul bill written by U.S. Sen. Maria Cantwell, Washington became eligible to obtain federal money. This year the federal government will chip in around $100 million for Basic Health.

Chopp said they are looking at the possibility that cities and counties - not just the state - can seek matching federal grants. At the state level, they’re also looking at more federal “innovation” grants.

Yet another idea was to seek private money to bridge the funding gap in this fiscal year, which would have been less than several million dollars. Chopp said that idea is still on the table.

Another proposal thrown around but that hasn’t got much momentum is a referendum to ask voters for a tax to keep Basic Health alive until 2014, or in short - a new tax. Many advocates for Basic Health are wary of this idea, especially after voters rejected tax increases in the last election and reinstated a two-thirds vote in the Legislature for any tax and fee increments. Voters in the past have had favorable views of Basic Health, approving Initiative 773 in 2001 that expanded enrollment.

“I think that’s our last option. I really don’t want it to be in that much risk. Would really prefer if we find the money in the Legislature to go ahead and fund it for the next biennium,” Cody said.

Republican lawmakers don’t want to see the program eliminated but have pushed for raising the poverty level limits and re-enrolling people to the program as ways to weed out people. Their agendas were partially met in the proposals that came out of the House and Senate where people who are not illegible because they not citizens will be cut out.

“You have to remember, we have this problem of not understanding that these are gifts. These are not responsibilities or requirements of the government to the citizenry. It’s all done out of compassion and charity that the taxpayers through elected officials developed a safety net to support the public,” said Sen. Joe Zarelli, the ranking Republican in the Senate’s Ways and Means Committee.

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