Olympia Business Watch

Brunell: Our state health care exchange should preserve choice

Washington's Health Care Authority is moving forward with creating a health insurance exchange, even as the federal health care law heads for review by the U.S. Supreme Court.

There are plenty of questions that will need to be answered as part of the process, but AWB President Don Brunell writes about a fundamental one in his weekly column: Will the state exchange protect choice or reduce it?

The decisions the authority makes will either protect the private insurance market or reduce choice and put private insurers out of business, Brunell writes.

If the Health Care Authority members limits the insurance carriers can participate in the exchange, that will reduce choice. If they limit the types of health plans those companies can offer, that will restrict choice. If they compel insurers to participate in the exchange as a condition of operating in Washington state, that will reduce choice.

"These are all options under consideration," Brunell writes.

Make your voice heard -- send comments and suggestions to the Health Care Authority in Olympia, and tell your state legislator how you want Washington's exchange crafted.

Rago: Health care reform has launched period of 'convulsive change'

As he travels around the country talking about health care reform, it's common to hear expressions of frustration and even depression, Joseph Rago said Tuesday during the keynote address at our Health Care Forum in Seattle.

And yet Rago, who won the 2011 Pulitzer Prize for his series of Wall Street Journal editorials challenging the federal health care bill that eventually became law, said there are some good things that have come from the debate.

If nothing else, it has focused attention on an issue that has dogged businesses and the economy for a long time, Rago said during an informal keynote discussion with Jeff Gingold, a partner with Lane Powell and moderator for the forum.

Rising health care costs have wiped out any wage growth above inflation, and until America fixes the problem the country will not fully recover from the recession, he said.

Unlike some opponents of the Patient Protection and Affordable Care Act, Rago said he believes states would be smart to move ahead with establishing their own health insurance exchanges. If nothing else, they will collect federal money.

Panels look at state exchanges, soaring costs stemming from health law

Does it make sense for Washington to press ahead with development of a state health insurance exchange, or would it make sense to slow down and learn from the experiences other states encounter?

Jeff Gingold, moderator for AWB's Health Care Forum, put that question to a panel made up of state Sens. Randi Becker, R-Eatonville, and Karen Keiser, D-Kent, and Molly Voris, health benefit exchange project manager for the state Health Care Authority.

The answers offered a glimpse of the differences that exist among the lawmakers and officials responsible for implementing Washington's health insurance exchange.

"Why wait?" responded Keiser. "I don't see why we would hang back," she said, adding that Washington has made mistakes but officials have learned from them.

Voris likewise argued for moving forward, saying the state has a better chance of crafting its own exchange and influencing the federal goverment.

AWB Health Care Forum underway

James Capretta, a fellow with the Ethics and Public Policy Center, kicked off AWB's forum on health care reform today with an overview that described the numerous questions that remain unanswered about how federal health care reform will actually work, and how the government will pay for it.

Most people won't notice any impact as a result of the law until 2014, and the long delay between its passage and implementation carries important political and substantive implications, Capretta said.

Already, the Obama administration has pulled the plug on a long-term care provision of the law known as as the CLASS Act that was supposed to save $70 billion, he said.

Other elements that were supposed to help pay for the law are failing to meet expectations or are under threat, including planned taxes on medical devices and rich benefit plans known as "Cadillac" plans.

Medical device manufacturers are fighting the planned tax on their products, and labor unions want to repeal the Cadillac tax, which isn't scheduled to take effect until 2018.

Brunell: Broken promises carry unwelcome consequences

Raiding dedicated accounts is nothing new in Olympia, AWB President Don Brunell writes in his weekly column.

It's what lawmakers do when they get desperate.

In 2009, they were desperate to close a $9 billion budget gap, so they agreed to an innovative deal proposed by the Washington State Hospital Association in which hospitals volunteered to tax themselves. The state could use the tax collections to qualify for federal matching funds, keep some of the money for the state's general fund and return the rest to the hospitals in the form of higher Medicaid payments.

But just a year later, state officials passed a law that diverts more of the federal funds into the state coffers, prompting the hospitals to sue the state.

It's similar to what happened to Crown Zellerbach in the 1980s. The company was halfway through with construction on a modernization of its old Camas pulp and papermaking facility when state lawmakers wiped out an account that the company was relying on for the project.

The project was eventually grandfathered, but it cost an extra $25 million.

Now the hospitals are in for a bruising court battle that will cost money that would otherwise be going to patient care, Brunell writes. And there are important principles at stake -- "namely that elected officials should follow the law and keep their promises."

Romney health plan's skyrocketing costs harbinger of what's to come under Obama plan

One of the pillars of the sweeping federal health-care reform jammed through Congress last year by President Obama, then House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nevada) was establishing state-run health exchanges similar to the exchange in Massachusetts, The Health Connector. The Connector was pushed through the Bay State's legislature in 2006 by then Republican Gov. Mitt Romney.

Massachusetts enacted landmark health-care reform legislation that promised to extend health-care coverage to all citizens while significantly lowering costs. The law imposes mandates on residents to obtain health insurance and on employers with 11 or more employees to provide health insurance for their employees. It also expands Medicaid coverage and establishes a health insurance subsidy program. Additionally, it creates an insurance exchange, the Massachusetts Health Insurance Connector, which helps individuals who are not eligible for Medicaid purchase competitively priced health plans.  

The law did not bring about a promised reduction in health care expenditures. Rather, it permitted the state legislature and governor to expand health insurance coverage to almost all residents, while imposing more than $8 billion in new health care costs to the federal government and on state residents and businesses. The impacts have been particularly hard on small business.

Recently, Boston's own Suffolk University Beacon Hill Institute released a report on the high price for Massachusetts' health reforms. The study finds that over a five-year period the following has resulted:

• The federal government has spent an additional $2.418 billion on Medicaid for Massachusetts;
• Private health insurance costs have risen by $4.311 billion over the period;
• State health care expenditures have risen by $414 million over the period;
• Over this period, Medicare expenditures increased by $1.426 billion
• For a total cumulative cost of $8.569 billion over the period; and
• The state has been able to shift the majority of the costs to the federal government.

At a time when the United States has exhausted its credit limits, the federal government cannot bail out every state's health exchange. It's time to change the federal law.

Don C. Brunell, President (DonB@awb.org)

Brunell: Lawmakers should tread carefully on state health exchange

When state lawmakers begin talking later this month about implementing a health-care exchange, they should tread carefully, AWB President Don Brunell writes in his weekly column.

That's because experience has shown how perilous the undertaking can be.

State health-care exchanges were originally characterized as open-air markets where health-insurance providers would compete side-by-side so that consumers could easily compare coverage and cost. But some states are using them to introduce single-payer systems, squeezing out private insurers and dramatically increasing the cost for consumers.

Will that happen here in Washington? Hopefully not, but the outlook is not promising, Brunell writes. The legislation creating the exchange was approved quickly and signed into law with a lot of questions unanswered, including what it will cost, where the money will come from, what it will look like and who it will serve.

Over the next six months, lawmakers and the state Health Care Authority will "put some meat on the bones" of the health exchange, Brunell writes. Before they get too far long -- and commit taxpayers to a program that affects the health care of every citizen of the state -- they need to answer some important questions.

Ideally, they would have been asked and answered before lawmakers created the exchange.

Brunell: National health care battle moving to the states

The idea behind health insurance exchanges was a good one, but early indications show that states are using them to create their own versions of health-care reform, AWB President Don Brunell writes in his weekly column.

That means they include everything from cross-state competition to single payer, government-run health care.

Talk of single payer health-care systems has already surfaced at the state level in Massachusetts, Vermont and Connecticut, and 13 states have proposed state compacts allowing residents to shop for health care in other states.

Here in Washington state, lawmakers rushed to adopted legislation this year that establishes an exchange, even though it doesn't have to be in place until 2014. The vote was eerily like the one in which federal lawmakers adopted the national health-care law, Brunell writes.

"This situation bears watching," he says. "While no one knows for sure what our state exchange will look like or what it will cost, one thing is certain: The decisions made in the Legislature over the next two years will affect the health care of every man, woman and child in Washington state."

Brunell: Congress helps business dig out from health-care law before IRS digs in

Before passage of the 2,700-page Patient Protection and Affordable Care of Act of 2010 -- commonly known as Obamacare -- then-House Speaker Nancy Pelosi said, "We have to pass the bill so you can find out what's in it."

More than a year after it became law, we are still finding out what's in it -- and what needs to be fixed or repealed, AWB President Don Brunell writes in his weekly column.

Congress managed, with considerable effort, to repeal a part of the bill that required all businesses to file a 1099 form to the Internal Revenue Service for purchases or payments of more than $600. But there are plenty more problems with Obamacare, and judging by the difficulty lawmakers had fixing something so obviously flawed as the 1099 requirement, it raises questions about future fixes.

"Hopefully," Brunell writes, "fixing the problems will be a little easier and more timely than what has happened with the 1099 repeal."

Brunell: Fixing the federal health reform law

One year into Obamacare, the costs are soaring, AWB President Don Brunell writes in his weekly column. The 10-year-cost now stands at $1.45 trillion, a $40 billion increase over the last 12 months.

If history is any guide, the real cost will be much higher, he says.

The price tag isn't the only cause for concern, either. Ironically, a law that was intended to increase access to health insurance actually elminates many existing programs that have proved successful in providing affordable coverage.

For example, the law's regulations mandating what constitutes "acceptable" health insurance coverage would eliminate popular Health Savings Accounts. Another casualty: Highly successful association health plans.

Gov. Mike Lowry and a bipartisan majority of state legislators introduced the plans to Washington in 1995 to cut the number of uninsured, and 15 years later they're wildly successful. Some 37 percent of enrollees in AWB's plan did not have health insurance previously.

Some opponents of the health law in Congress want to use the power of the purse to defund Obamacare entirely. It's easy to see why. "By eliminating successful programs that are providing affordable health coverage for tens of thousands of people," Brunell writes, the federal alw isn't expanding choice -- it's reducing it."