Washington state health insurance plan will fail, analyst argues
The universal health-care plan proposed by Washington Insurance Commissioner Mike Kreidler will likely fail as similar plans have failed in other states, according to an analysis by the Washington Policy Center, a Seattle-based think tank that favors market-based solutions.
The plan proposed by Commissioner Kreidler, called the Guaranteed Health Benefits Plan, seeks to provide everyone in the state with basic health insurance.
The plan would provide catastrophic coverage for health emergencies costing over $10,000 a year plus a package of limited preventive care that would include cancer screenings, immunizations, an annual medical check-up and an annual dental visit.
Because the plan would cover high-cost catastrophic coverage, people could purchase additional health coverage at much lower rates should they wish to do so, proponents of the proposal argue.
Health-care would remain private, however, with Private insurance companies providing the coverage, and private health-care providers giving care, proponents say.
Those with chronic health problems who could not afford routine health care would have access to the state’s Basic Health Plan, which is available on a sliding scale to residents making up to 300 percent of the Federal Poverty Level, roughly $30,000 for an individual.
The plan would be funded by a 1 percent tax on employees wages and a 3 to 5 percent tax on an employer’s gross wages with a sliding scale so that smaller businesses would pay less.
A nine-member board would be set up to define the benefits and promote more efficient, cost-effective care.
The $6.5 billion-a-year plan, proponents argue, should reduce health-care costs overall.
But in an analysis release today, Washington Policy Center Health Care Policy Analyst Roger Stark, M.D. says the plan rests on a number of questionable assumptions, such as the plan will cause a 30 percent decrease in insurance rates, that there will be substantial savings due to preventive care and reduced administrative costs, and that insurers will be able to provide catastrophic care at rates set by the state board.
The success of Commissioner Kreidler’s plan depends on eleven such assumptions, Dr. Stark writes. “If one or, as is more likely, several of these assumptions is wrong or does not achieve its financial goal, the entire program would be in jeopardy.”
Stark also predicts the plan’s benefit board would “eliminate all forms of free market choice” setting uniform rates and benefits “regardless of which insurance companies, or the number of insurance companies, that are willing to participate in the program.”
“Virtually every state, as well as the federal government that has attempted a form of mandatory universal coverage has wound up with runaway deficits, or a higher tax burden on citizens, or both,” Dr. Stark warns.
Commissioner Kreidler’s plan will be considered by the State Legislature next January and ultimately would be put on the ballot for voter approval perhaps as early as the fall of 2009.
To learn more:
- Visit the Health Insurance Reform page on Commissioner Kreidler’s website where there are a number of documents, including a FAQ sheet, on the proposal.
- Read Dr. Stark’s critique: Analysis of the Guaranteed Health Benefits Plan
- Read our book review of Dear Governor: About That Healthcare Crisis
