Series on Health Reform - Increase Care, Reduce Costs
This is the first in a series of posts on health care reform and its impact on Washington state
Access to quality, affordable health care is key to Washington’s economy because it creates a healthy workforce, reduces overall costs, and helps children do better in school. Yet, lack of coverage has been a big and growing problem in our state because of state budget cuts, the rising costs of insurance, and loss of employer coverage. Continued implementation of the federal health care reform law will go a long way towards addressing these issues in our state. The U.S. Supreme Court is expected to rule in the next week on the constitutionality of the law’s reforms.
One in seven Washingtonians don’t currently have health coverage, but under federal healthcare reform, our state could cut the number of uninsured by 74 percent.(1) (see Figure 1)
Health care reform has three main provisions that have the potential to drastically improve the health of Washingtonians with low- to middle- incomes:
- Medicaid expansion: Medicaid will expand to include individuals with incomes up to $15,400 a year, or about $26,000 for a family of three (2). The expansion is expected to cover about 330,000 additional people.(3)
- Health Benefits Exchange: The creation of an insurance exchange will create a new marketplace for states to offer health benefits to individuals and small businesses at more affordable prices. People with incomes up to 400 percent of the federal poverty level are eligible for subsidies within the exchange.
- Federal Basic Health Program: Washington will have the option to offer a Federal Basic Health Program to those with incomes between 138 percent and 200 percent of the federal poverty level in lieu of the exchange. (4) This would be similar to our state Basic Health Plan which has successfully provided health coverage for working adults. A Federal Basic Health Program has the potential to offer coverage that is more affordable than what people in this income range would receive in the exchange.
Figure 2 shows the impact that all three components of health care reform could have on offering affordable coverage to individuals and families.
Stay tuned to schmudget. Over the next week, we will dive into all three components of health care reform and explore the implications for Washingtonians.
1. Mike Kreidler, What’s at stake: The Affordable Care Act in Washington state: A county‐by‐county analysis (Office of the Insurance Commissioner, May 2012). http://www.insurance.wa.gov/legislative/reports/Whats-at-stake.pdf
2. The Affordable Care Act expands Medicaid eligibility to 133 percent of the federal poverty level (FPL). In addition, there is a five percentage point income disregard, effectively raising the eligibility to 138 percent FPL.
3.Matthew Buettgens, et al., The ACA Medicaid Expansion in Washington (The Urban Institute, May 2012). http://www.hca.wa.gov/hcr/documents/ACA_Medicaid_Expansion_WA_State.pdf
4. Eligibility for Medicaid is up to 133% FPL. In addition, there is an income disregard of 5 percent, effectively increasing eligibility up to 138% FPL. The increased Medicaid eligibility results in eligibility for Federal Basic Health at incomes greater than 138% FPL.