Inslee plan for health subsidies echoes national debate

By Tom James / Associated Press

OLYMPIA — A proposal for expanded health coverage is bringing a national debate to Washington State.

Democratic Gov. Jay Inslee’s plan to broaden state subsidies for private insurance is provoking both concerns over costs and criticisms that it doesn’t go far enough.

Along with creating a state-contracted insurance option, the plan would require the state health care authority to plan — but not implement — expanded payment help for individuals before 2021.

But that drew criticism from both the left and right at a Monday public hearing, with business groups raising alarms over costs and health care advocates questioning both the delay and the rationale for subsidizing private insurance over direct public funding of individual costs.

At the same hearing, legislators also heard a competing bill that calls for a detailed study of how to transition the state to a single-payer system, where costs are covered directly by the state.

The controversy mirrors debate at the national level, where Democratic presidential candidates including Sens. Elizabeth Warren of Massachusetts, Kirsten Gillibrand of New York, and Kamala Harris of California have all endorsed expanding health care access but differ on the role of private insurance companies. President Donald Trump has criticized the hybrid public-private system underlying the Affordable Care Act.

Inslee has not declared his own candidacy for president but is broadly considered a likely entrant into the race.

If approved by the Legislature, Inslee’s plan would require the state’s health care authority to present lawmakers with a concrete proposal for expanding individual subsidies in late 2020, and require the state to contract a private insurance provider to offer two subsidized plans statewide by 2021.

For the individual subsidies, the bill calls out a specific target: Expand current insurance payment help, currently available to people who make less than 400 percent of the federal poverty line, to people making up to 500 percent, or about $62,000.

Around two-thirds of Washington residents make that much or less, including some in the state’s middle class, which is broadly figured to include individuals making up to twice the state’s median income, or about $185,000 for a family of four. The individual subsidy would be specifically for those making a qualifying income but not having another source of coverage, like an employer plan or federal assistance.

The individual subsidies would be calibrated to limit premium costs to roughly 10 percent of income; the state-contracted plans would likely aim for a similar figure.

The plan would also create standard definitions for different tiers of plans based on how much they ultimately cover.

Backers of the plan defended its timing and structure. Rep. Nicole Macri, a Democrat from Seattle who is co-sponsor of the House version of Inslee’s proposal and vice chairwoman of the Healthcare and Wellness committee, said it would take time to write rules around complicated federal funding programs.

And Sen. David Frockt, D-Seattle, the sponsor of the Senate version, said keeping a third party between consumers and the state could be more efficient.

Inslee defended his plan as more practical than a single-payer system.

“It’s something that’s achievable now, and I’d like to make progress now,” Inslee said Monday.