Health Care

Federal Government Will Pick up the Tab for Medicaid Expansion

Kim Justice — 2012-10-12T18:16:35Z

Beginning in 2014, Washington state has an opportunity to benefit from billions in federal funding, while covering hundreds of thousands more people with health coverage.

For the first three years (2014-16), the federal government will pick up 100 percent of the costs to cover those who gain eligibility under the expansion of Medicaid. Beginning in 2017, the federal contribution begins to gradually taper down until it settles at 90 percent in 2020 and every year after. That means our state will contribute a mere 10 cents for every dollar the federal government pays.

This is a deal Washington state cannot afford to pass up. Doing so would cost our state roughly $10 billion in lost federal funds over seven years (2014-20).

This is the second post in our series on Why Medicaid Expansion is a Good Idea. To see the full info graphic click here.

Nearly 350,000 Will Gain Health Coverage Under Medicaid Expansion

Kim Justice — 2012-10-10T22:22:48Z

One in six (948,000) Washingtonians under age 65 currently lack health insurance, that's a significant increase from 141,000 at the start of the recession in 2008-2009.(1) But it doesn't have to be this way, lawmakers have an opportunity to turn those figures around. A key provision in the Affordable Care Act allows states to expand Medicaid to individuals who earn less than $15,415 or about $26,300 for a family of three.

Medicaid expansion will reduce the number of uninsured people by:

Allowing low-income adults without dependent children to enroll; and
Raising the income level for eligibility, so that people with incomes up to 138 percent of the federal poverty level qualify.(2)

It is estimated that once fully implemented, expansion of Medicaid in Washington state will provide nearly 350,000 people with health coverage (see graph). Of those enrolled, three out of four are people who will be newly eligible under the expansion. The remainder are people who are currently eligible for Medicaid, but have not enrolled — the majority of them (52,000) are children.

This is the first in our series on Why Medicaid Expansion is a good idea. To view the full info graphic click here.

1. Current Population Survey, 2011

2. Based on 2012 federal poverty guidelines; the Affordable Care Act expands Medicaid eligibility to 133 percent FPL. In addition, there is a five percentage point income disregard, effectively raising the eligibility to 138 percent FPL. Eligibility for pregnant women remains at 185 percent FPL, and eligibility for children remains at 300 percent FPL.

Infographic: Four Reasons Why Medicaid Expansion is a Good Idea

Michael Mitchell — 2013-04-10T16:53:00Z

By Kim Justice and Michael Mitchell

With big changes on the way under federal health care reform, one major decision facing lawmakers is whether or not to opt-in to one of health reform’s biggest provisions: expansion of Medicaid.

This is a no-brainer. Federal expansion of Medicaid is a good deal for states. In Washington state, it would expand coverage to hundreds of thousands of uninsured and save the state money. Check out our info graphic for four reasons why Medicaid Expansion is a good idea.

For more information on healthcare reform in Washington state, check out our series on Health Reform - Increase Care, Reduce Costs.

For a printable version, click here.

New Report Shows Medicaid Expansion is Good for State Budgets

Kim Justice — 2012-07-12T19:33:55Z

In our health reform series, we detailed how the Medicaid expansion in 2014 will extend coverage to more than 330,000 uninsured Washingtonians. When the U.S. Supreme Court ruled that it was optional for states to expand Medicaid to low-income adults, critics quickly emerged claiming that the expansion would be cost prohibitive for states. A report released today by the Center on Budget and Policy Priorities shows that the opposite is true: the Medicaid expansion is extremely financially favorable for states.

Here’s why:

The federal government will pick up 93 percent of expansion costs over 2014-2022 (see graph below). For the first three years, 100 percent of the costs will be assumed by the federal government for those newly eligible. Support will gradually decline to 90 percent in 2020 and thereafter.
Additional costs to the state represent a 2.8 percent increase in what would have been spent on Medicaid from 2014 to 2022 without health reform. This estimate takes into account participation among those who are currently eligible for Medicaid but not enrolled. These enrollees would be covered at the standard matching rate of 50 percent, rather than the 93 percent average federal match for those newly eligible. Critics have cited participation among this group as a financial burden to states. As the estimates show, this is simply not the case.
Further savings will be realized by states. By sharply reducing the number of people without health insurance, the Medicaid expansion will ease cost pressures on states from uncompensated hospital care, mental health care, and other health care services.

Read the entire report for more information.

Part Three in Health Reform Series: Federal Basic Health Program

Kim Justice — 2012-06-27T17:53:15Z

This is the third in a series of posts on health care reform and its impact on our state.

State policymakers must soon decide whether or not to adopt a Federal Basic Health Program. This option in the health care reform law has the potential to provide better quality, more affordable health insurance to more than 160,000 low-income individuals and families.(1) Such a plan would allow us to build upon our state’s own Basic Health Plan which was established in 1987 to provide affordable health coverage for low-income, working adults.

Often, explanations of how health care reform will expand insurance coverage to millions of Americans focuses on two elements of the law: the expansion of the Medicaid program and the Health Benefit Exchanges.

But there’s another element that often gets less attention: the Federal Basic Health program, an option that states can choose starting in 2014. It is designed to serve people who will earn too much to qualify for Medicaid under the new health care reform law but who may still struggle to afford insurance in the exchanges – even with the help of tax credits.

Specifically, The Federal Basic Health Program would be offered in lieu of the exchange for households with incomes between 138 and 200 percent of the Federal Poverty Level, or between about $26,300 and $38,000 for a family of three.(2) Legal immigrants with low incomes would be eligible as well.(3)

The figure below illustrates how a Federal Basic Health Program will help give low income Washingtonians access to health insurance.

A recent state-specific study estimated the cost of two different Federal Basic Health Program insurance plans. As the table below shows, Federal Basic Health Program recipients could save significant amounts of money each year on premiums and cost-sharing.

Federal funding for the Basic Health Program could help states further improve affordability, benefits, and access. States offering a Basic Health option receive 95 percent of what the federal government would have spent on premium tax credits and cost-sharing reductions for individuals who would otherwise be enrolled in the exchange.(4) Washington state could receive up to $1,100 per enrollee per year in revenue beyond the cost of the plan which can improve the program in various ways, including reducing premiums and cost-sharing, increasing rates paid to providers of health care, or covering additional health benefits.(5)

The concept of a Basic Health Program is home grown. Our state’s Basic Health Program served as the model for health care reform’s federal version. It’s an idea that has worked well in Washington state and policymakers should take advantage of this option to continue its success.

Coming up: Look for our last post in the series tomorrow, where we will examine the impact Medicaid expansion will have on covering the uninsured.

See Part I, Part II, and Part IV in this series for more information.

1. Enrollment is estimated to be between 75,000 and 110,000.

Matthew Buettgens and Caitlin Carroll, The ACA Basic Health Program in Washington State (The Urban Institute, April 2012). http://www.urban.org/UploadedPDF/412572-The-ACA-Basic-Health-Program-in-Washington-State.pdf

2. 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.

3. Legal immigrants under 138% FPL are eligible if they do not have an affordable offer from an employer and are ineligible for Medicaid because they have been a resident less than five years.

4. Federal guidance on the Federal Basic Health Program has not been released, so there are many unanswered questions about how states will receive payments and whether or not the 95 percent applies to cost sharing subsidies as well as the premium tax credits.

5. Matthew Buettgens and Caitlin Carroll, The ACA Basic Health Program in Washington State (The Urban Institute, April 2012). http://www.urban.org/UploadedPDF/412572-The-ACA-Basic-Health-Program-in-Washington-State.pdf

Exact projections on increased provider rates must wait until we have more guidance from the federal government, but estimates by The Urban Institute show that rates could be increased by 4-5 percent higher than Medicaid, or even as high as 27 percent higher than Medicaid, making them comparable to commercial rates.

Part Two in Health Reform Series: Health Benefits Exchange

Kim Justice — 2012-06-27T17:51:00Z

This is the second in a series of posts on health care reform and its impact on our state. In less than two years, Washingtonians could see sweeping improvements in both cost and access to health care with the implementation of federal health care reform. Yesterday, we highlighted how the law will give 800,000 Washingtonians access to affordable insurance. Today we explore how Health Benefit Exchanges, one of the core components of health care reform, will help accomplish this.

The Health Benefits Exchange will create a new marketplace for insurance companies to offer affordable health insurance to individuals and small businesses. States must have an exchange in place by the start of 2014, and Washington is one of 15 states that have made headway toward this requirement.(1)

Benefits from the exchange include:

More competition, better value: Exchanges will offer options that help patients shop for and enroll in a private health insurance plan. Consumers will be able to compare health plans, search for ones that meet their needs, and rate the quality of their plan, which will encourage private insurers to offer better value at lower prices.
Improved affordability: People with lower- and middle incomes will be eligible for federal tax credits to help them afford private health insurance. (2) The table below displays the range of premiums that people would pay, depending on their income. In addition, some people will qualify for additional help that will limit out-of-pocket health care costs, such as co-payments and deductibles.
Reduced number of uninsured: Financial assistance within the exchange removes a significant barrier for individuals and families previously unable to afford coverage, and benefits everyone in the state. By some estimates, the exchange will increase coverage for over 400,000 previously uninsured Washingtonians. (3) With more people insured, we can expect to see less uncompensated care, which cost our state’s hospitals an estimated $700 million in 2010 and was passed on to us all, through increased premiums. The Office of the Insurance Commissioner estimates that the hidden cost of uncompensated care is estimated to be about $1,017 per insured family per year.(4)

Washington state is already working on creating an exchange. In 2011, the Legislature authorized the creation of an exchange and began to lay the groundwork (SB 5445). More measures were enacted this year to continue the work. Key provisions include leveling the playing field with insurance companies that operate outside the exchange by preventing them from offering only plans that enroll the healthiest people, and creation of a quality rating system so that consumers can rate the quality of their plan, access, services, and affordability (HB 2319).

Health and well-being are central to quality of life in Washington state. Major advances such as the creation of a health care exchange promote a healthy state and benefit us all.

Coming up: Look for our next post in the series tomorrow, where we will examine how the Federal Basic Health Option can make coverage more affordable for many Washingtonians.

See Part I, Part III, and Part IV in this series for more information.

1. Kaiser Family Foundation, State Action Toward Creating Health Insurance Exchanges, as of May 17, 2012. http://www.statehealthfacts.org/comparetable.jsp?ind=962&cat=17&sub=205&yr=1&typ=5

2. Those with employer-offered insurance are ineligible for tax credits within the exchange, unless the employer-offered insurance is deemed unaffordable or does not offer the minimum essential benefits.

3. Mike Kreidler, What’s at stake: The Affordable Care Act in Washington state: A county‐by‐county analysis (Washington state Insurance Commissioner, May 2012) http://www.insurance.wa.gov/legislative/reports/Whats-at-stake.pdf

4. Washington state Office of the Insurance Commissioner, State of the Uninsured, Health Coverage in Washington state (December, 2011). www.insurance.wa.gov/legislative/reports/2011-uninsured-report.pdf

Series on Health Reform - Increase Care, Reduce Costs

Kim Justice — 2012-07-06T17:31:49Z

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.

See Part II, Part III, and Part IV in this series for more information.

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.

Health Care Infrastructure is Straining to Keep Up With Demand

Kim Justice — 2012-02-17T20:19:36Z

One in seven Washingtonians are without health insurance— an increase of about 170,000 people since the start of the recession (see graph below). Community health centers and hospitals serve as the providers of last resort for those who do not have access to regular care. But as our recent brief, “Cuts on the Rise, Health in Decline,” shows, they have been weakened by recent cuts despite growing demand for their services because of the weak economy and reductions in other areas of health care spending.

In the last legislative session alone, community health centers (CHCs) sustained over $300 million in cuts. Because CHCs serve anyone, regardless of ability to pay, the loss of state funds puts enormous strain on them. In 2010, CHCs served roughly 728,000 patients, 35 percent of whom were uninsured. The number of uninsured patients has increased 75 percent since 2000. Health centers have responded to the cuts by freezing salaries, laying off providers, and reducing hours of operation. If cuts continue and the number of uninsured rises, some CHCs will be faced with closing their doors.

Hospitals are another setting for serving people who lack insurance and often are not compensated. In 2010, Washington state hospitals provided an estimated $700 million in uncompensated care – $378 million in charity care and $311 million in bad debt write-offs – a 24 percent increase from 2008. By 2013 that figure is expected to rise to nearly $1.2 billion.

The health and well-being of Washingtonians is in jeopardy unless policymakers move away from cutting services and toward a solution that embraces revenue as part of the answer. Short-term solutions could include temporarily increasing the state sales tax and eliminating unproductive tax breaks. In addition, we need to make broader changes in the way Washington takes in revenue, to ensure long-term stability. This can be accomplished through a new tax on capital gains received by the wealthiest households.

To read the full brief, click here.

Seniors Getting Less Care and Paying More

Kim Justice — 2012-02-15T21:41:17Z

Public investments play a critical role in ensuring that people with long-term health needs, particularly elderly men and women, receive a full range of support and services. Yet as our recent brief, “Cuts on the Rise, Health in Decline” shows, that commitment has been fading for many in need of long-term care:

More than 50,000 older Washingtonians had to pay more for their medication last year because of elimination of a program that covers drug co-pays for low-income seniors and people with disabilities who are eligible for both Medicaid and Medicare. Even a co-pay of $2 to $6 can force seniors to make tough choices between paying for medication and paying for other essential needs, such as food and housing.
Over 40,000 seniors and people with developmental disabilities who need help with things others take for granted – bathing, dressing, eating and getting around – have had their home health care hours cut by an average of 14.1 percent since 2009.

Without day-to-day assistance, the health of seniors and people with disabilities could deteriorate and result in a need for more urgent care or institutionalization, a much more costly alternative. The average daily cost of care for someone in a nursing home is $138; the average cost of in-home care is $53 per day.

Even if seniors avoid seeking care in a nursing home, they still may end up turning to more expensive alternatives such as emergency rooms. A recent study found that reductions in funding for home care were associated with increases in hospitalizations and emergency room visits. As the graph below shows, at an average of $300 per visit, a trip to the emergency room is the most costly of all options.

To read the full brief, click here.

New Policy Brief: Cuts on the Rise, Health in Decline

Kim Justice — 2012-02-07T18:20:04Z

Our new policy brief, “Cuts on the Rise, Health on the Decline” details the impact of deep budget cuts on our state's health care structures. Since the recession began, health care opportunities for Washington residents have declined at the same time that public need increased as people lost jobs and health care coverage.

Some of the findings include:

The Great Recession has left more people in our state without health insurance. One in seven Washingtonians have no health care coverage—880,000 people. An increase of about 170,000 since the start of the recession.
Basic health care services have been eliminated or drastically reduced for tens of thousands of people. Due to budget cuts more than 60,000 low income working adults have lost health coverage; over 40,000 elderly and people with disabilities are getting less care in their homes, potentially forcing them into more expensive options.
The health care infrastructure is straining to keep up. At community health clinics, the number of patients without health insurance has increased 75 percent since 2000, while hospitals provided $700 million in uncompensated care last year.

The full policy brief can be found here.

Cuts on the Rise, Health in Decline

Kim Justice — 2012-02-17T20:23:48Z

Introduction

Deep cuts in support for a range of public health services are threatening the well-being of Washingtonians, eroding our quality of life, and jeopardizing the state’s economic future.

Another round of damaging reductions is on the way unless state policymakers decide to take a more balanced approach – one that includes revenue – to the state’s economic challenges.

The timing of the health cuts couldn’t be worse, putting working people and the elderly in a double bind as care and insurance options have been greatly diminished just as the need for them is rising.

Since 2009, that state has cut over $3 billion from investments in healthy people and the environment (Figure 1).(1) Today, Washingtonians face this distressing situation:

The Great Recession has left more people without health insurance: One in seven Washingtonians – 880,000 people – have no health care coverage, an increase of about 170,000 since the start of the recession. That could jump by another 50,000 if two vital programs for low-income workers and disabled residents are eliminated, as the Governor recently proposed. For those who still have coverage, costs are on the rise.
Cuts limit access to health care for people who need it the most: Over 60,000 low-income working adults have lost health coverage; over 40,000 elderly and disabled Washingtonians are getting less care in their homes, potentially forcing them into more expensive options; and over 180,000 people have been hurt by cuts in coverage for critical medical devices such as hearing aids and eyeglasses.
The health care infrastructure is straining to keep up: Community clinics and hospitals, critical components of our health care system, are facing a dramatic – and costly – increase in demand, directly tied to the cuts made elsewhere. The number of patients without health insurance at clinics has surged 75 percent since 2000, and hospitals provided $700 million in uncompensated care last year.

It is vital that we have healthy people in order to build and maintain a strong workforce; we owe it to our children to make sure they grow up healthy and in safe homes; and we have a responsibility to care for those who are aging and disabled.

Those things are in jeopardy unless policymakers move away from cutting services and toward a solution that embraces revenue as part of the answer. Short-term solutions could include temporarily increasing the state sales tax and eliminating unproductive tax breaks.

In addition, we need to make broader changes in the way Washington takes in revenue, to ensure long-term stability. This can be accomplished through a new tax on capital gains received by the wealthiest households, strengthening our state Rainy Day Fund, reducing taxes for lower- and middle- income families through the Working Families Tax Rebate, and bringing tax breaks in line with the rest of the budget. Tax breaks should be reviewed regularly to determine effectiveness so they can be reauthorized or eliminated, depending on whether they are delivering the results they’re supposed to.

The Great Recession has left more people without health insurance

Extensive job losses during the Great Recession and the economy’s slow recovery have dramatically reduced access to health care. Because health insurance is closely linked to employment, when the number of people out of work in our state rose – hitting 10 percent in 2009 – many Washingtonians were left without health insurance or a viable alternative.(2) That helped push the number of people without health insurance today to 880,000 – one in seven Washingtonians – an increase of about 170,000 since the start of the recession (Figure 2).(3)

Consequently, more people have turned to public health supports, such as Medicaid. In fact, over 200,000 more Washingtonians used the state-federal program in 2010 compared to 2006 (Figure 3). Without our system for providing health coverage- including Medicaid- the increase in the number of Washingtonians without insurance would have been even greater.

Even for those who remain employed, health coverage is not a guarantee, and the cost is growing as employers shift more of the expense onto employees. The average contribution to employee health benefits rose by 13 percent for Washington families and by 24 percent for individuals from 2008 to 2010.(4)

The rising cost can prompt people to forgo coverage altogether, putting more strain on other health services. The percentage of employees eligible for coverage who chose not to take it rose to 21 percent in 2010, from 15 percent in 2008.(5) Continued investments in public health insurance are vital to stemming the impact of the recession.

Cuts limit access to health care for people who need it the most

Even as the need for health care options has grown, cuts have taken an enormous toll on Washington’s most vulnerable residents:

People with low incomes have lost entire treatments and services;
Seniors and people with developmental disabilities have had their care reduced and costs raised;
Preventive mental health services are rapidly disappearing; and
Many low-income, working adults who don’t qualify for traditional health insurance are unable to get affordable care.

People with low incomes lose access to services

Washingtonians with lower incomes are seeing entire components of their health care eliminated. In 2011, Medicaid – which provides coverage to some lower-income families with children, elderly people, and people with disabilities – stopped covering preventive and restorative dental care, eyeglasses, most hearing devices, and most podiatry services for adults.(6) More than 180,000 people were affected.(7)

Lack of these services can have consequences beyond immediate health. For instance, people who do not have the vision or hearing devices they need could have difficulty finding or keeping a job.

In addition, eliminating preventive services and access to important medical devices forces people to turn to more expensive care, such as emergency rooms, when their health deteriorates, canceling out any short-term savings from the cuts. In the case of dental care, it has been found that lack of paid-for preventive dental care is the main cause for untreated dental disease and the percentage of such patients showing up in the emergency room as a last resort.(8)

Under the Governor’s proposed budget for the remainder of the 2011-13 biennium, people with low incomes would be required to pay a portion of the cost for a variety of medical services, such as prescription drugs, physician services and non-emergent medical transportation and emergency room visits. Although the amounts might be minimal, they would present a huge barrier. While results are mixed as to the impact of cost-sharing on health outcomes, one thing is clear – utilization of health services decreases as a result of cost-sharing. Even modest cost-sharing may dissuade people from preventive care that might provide great value in the future.(9)

Seniors get less care and pay more

Public investments play a critical role in ensuring that people with long-term health needs, particularly elderly men and women, receive a full range of support and services. In recent years, that commitment has been fading for many in need of long-term care.

For instance, more than 50,000 older Washingtonians had to pay more for their medication last year because of elimination of a program that covers drug co-pays for low-income seniors and people with disabilities who are eligible for both Medicaid and Medicare. Even a co-pay of $2 to $6 can force seniors to make tough choices between paying for medication and paying for other essential needs, such as food and housing.

Additionally, over 40,000 seniors and people with developmental disabilities who need help with things others take for granted – bathing, dressing, eating and getting around – have had their home health care hours cut by an average of 14.1 percent since 2009. Under the Governor’s 2012 Supplemental budget proposal, 1,600 people would lose access to long-term care services altogether. Although considered to have the least-severe needs, without day-to-day assistance, their health could deteriorate and result in a need for more urgent care or institutionalization, a much more costly alternative.

The average daily cost of care for someone in a nursing home is $138; the average cost of in-home care is $53 per day (Figure 4).(10) Cost-effectiveness is a key reason why states had been expanding home and community-based care. Washington state had been seen as a pioneer in this effort, reducing the portion of the long-term care budget spent on nursing homes to 45 percent in the 2005-07 budget from 82 percent in 1991-93.(11) We cannot afford to reverse this trend.

Even if seniors avoid seeking care in a nursing home, they still may end up turning to more expensive alternatives. A recent study found that reductions in funding for home care were associated with increases in hospitalizations and emergency room visits.(12) As Figure 4 shows, at an average of $300 per visit, a trip to the emergency room is the most costly of all options.

Cost-saving preventive mental health services drastically reduced

Preventive mental health services, which have been an integral, cost-saving component of our public health system, have been cut severely. By addressing mental health problems in the early stages, the state saves millions of dollars in higher costs associated with later-stage treatments and public safety.

In Washington state, Regional Support Networks (RSNs) manage and coordinate mental health care for over 120,000 people. Funding for RSNs has been drastically reduced since the start of the recession and further cuts are being considered, another example of a short-term choice that will end up costing taxpayers more in the long-run.

Since 2009, funding to serve vulnerable clients who do not qualify for Medicaid (low-income, working-age adults who are not pregnant, disabled or do not have children) has been cut by approximately $44 million. The Governor’s proposed budget would cut non-Medicaid funding for Regional Support Networks by an additional 3 percent, or $4.6 million.

Reductions in funding impede the RSNs’ ability to provide treatment that would otherwise reduce the use of expensive crisis services for their clients. Outpatient services for non-Medicaid clients in some counties have disappeared entirely, meaning that individuals must be in a crisis to receive any services. In addition, RSNs around the state are reporting longer waits in emergency rooms, staff layoffs, and a decline in services for people transitioning to the community from institutional care.(13) This puts more pressure on law enforcement and local emergency rooms and endangers clients. If service cuts continue, more lives will be put on the line.

Over 150,000 low-income, working adults can’t get Basic Health coverage

Another forward-thinking asset on the chopping block is the state’s Basic Health Plan (BHP). Since 1987, Basic Health has provided affordable health coverage for low-income, working adults who do not qualify for traditional health care programs, do not get coverage through their employer, and are unable to afford private insurance. At its peak, in December of 2000, the plan served just over 130,000 people who chipped in co-payments, premiums and deductibles. Today there are a mere 40,000 people enrolled and over 150,000 on a waiting list (Figure 5).(14) The Governor has proposed eliminating the plan.

In 2001, voters confirmed the value of the BHP by overwhelmingly approving (by two-thirds) a measure to increase enrollments by 175,000. It even served as a model for a provision in the federal health care reform law. Despite its success and popularity, the plan was hit with a series of budget cuts, imploding enrollment.

The state has also maintained a commitment to provide health coverage for people who cannot work due to a disability, through what has commonly been known as the Disability Lifeline program. The program provides much-needed health services for people who suffer from physical and mental disabilities. However, under the Governor’s proposed budget, that program is slated for elimination.

With the approaching implementation of federal health care reform, it would be prudent for policymakers to preserve the valuable infrastructure of both Disability Lifeline and Basic Health (see Box 1).

Health care infrastructure is straining to keep up

Community health centers and hospitals play a critical role in our state’s health care system, particularly for low-income families and those who have no health coverage.

But they have been weakened by recent cuts, despite growing demand for their services because of the weak economy and reductions in other areas of health care spending. In the last legislative session alone, community health centers (CHCs) sustained over $300 million in cuts. Because CHCs serve anyone, regardless of ability to pay, the loss of state funds puts enormous strain on them. In 2010, CHCs served roughly 728,000 patients, 35 percent of whom were uninsured. The number of uninsured patients has increased 75 percent since 2000. Health centers have responded by freezing salaries, laying off providers, and reducing hours of operation.(15) If cuts continue and the number of uninsured rises, some CHCs will be faced with closing their doors.

Hospitals are another setting for serving people who lack insurance and often are not compensated. In 2010, Washington state hospitals provided an estimated $700 million in uncompensated care – $378 million in charity care and $311 million in bad debt write-offs – a 24 percent increase from 2008.(16) By 2013, that figure is expected to rise to nearly $1.2 billion.(17)

If the Basic Health Plan and Disability Lifeline programs are eliminated, as the Governor’s 2012 budget proposal recommends, over 50,000 people would lose insurance. This would result in a loss of roughly $154 million for community clinics and $181 million for hospitals.(18) This means more layoffs of hospital and clinic staff, longer waits for patients, and less time for patients to spend with their doctors.

Box 1: Federal health care reform offers compelling reasons to preserve Disability Lifeline and Basic Health

Elements of federal health care reform provide compelling reasons to preserve both Disability Lifeline medical and the Basic Health Plan until 2014, when national reform is fully implemented. Doing so, we can prevent more people from being without insurance in the meantime and preserve some of the systems the state will need to provide expanded care.

In January 2011, Washington state’s plan for early implementation of Medicaid expansion, a key component of health care reform that will extend coverage to childless adults with annual incomes up to $15,028, was approved by the federal government.(19) Under the expansion, the federal government will pick up half the costs for covering approximately 55,000 people who are on Disability Lifeline medical and the Basic Health Plan.

This early expansion provides great relief to the state’s cash-strapped budget, and shows the importance of investments in health care. It also serves as an important bridge to 2014 when federal health care reform goes into full effect, at which point the costs will be fully covered by the federal government for these low-income populations.(20) It is expected that 328,000 Washingtonians (37 percent of the state’s uninsured population) will have access to health coverage by 2014.(21)

Indeed, the Basic Health Plan has been viewed as such a successful model for providing health care to those with low incomes that a federal Basic Health Option was included as part of federal health care reform. Beginning in 2014, the Basic Health Option could provide viable, affordable coverage for people with incomes between 138 percent and 200 percent of FPL who may not be able to afford coverage in the insurance market that the federal law will establish (known as the exchange), but earn too much to qualify for Medicaid. Individuals at this income level could greatly benefit from the improved affordability that the Federal Basic Health Option offers compared with the insurance exchange. A study conducted by the Urban Institute found that under the Basic Health Option, premium payments would drop from $1,218 to $100. Out-of-pocket costs would decline from $434 to $96 a year.(22)

Conclusion

Since the recession began, health care opportunities for Washington residents have declined at the same time that public need increased as people lost jobs and health care coverage. Any financial savings to the state over this period from reducing services will only cause more expensive problems in the long-term. More significantly, cuts have put the health and well-being of Washingtonians at risk. More harmful reductions are on the horizon unless the legislature takes steps to raise revenue now and set our state on track for future prosperity and job growth.

With federal health care reform coming, we must build on the crucial assets that in the past have contributed to a healthier state. This will require bold action to get the economy back on track, create jobs, and get our state healthy again. To stave off further cuts, we can temporarily increase the state sales tax and eliminate unproductive tax breaks. But these short-term solutions must be combined with long-term reform. Meaningful, lasting change to our tax system can be accomplished through a new tax on capital gains for high-income households, strengthening our Rainy Day Fund, reducing taxes for lower- and middle- income families through the Working Families Tax Rebate, and bringing tax breaks in-line with the rest of the budget by requiring regular assessment of their effectiveness, continuing or ending them depending on the results.

The health and well-being of our state and its people are among the most important investments we can make – our quality of life and our prosperity depend on it.

Acknowledgments

The Budget & Policy Center gratefully acknowledges the support of the Annie E. Casey Foundation, Bill & Melinda Gates Foundation, Paul G. Allen Family Foundation, Campion Foundation, Northwest Area Foundation, Stoneman Family Foundation, and The Seattle Foundation. The findings and conclusions presented in this report are those of the Budget &Policy Center, and do not necessarily reflect the opinions of these organizations.

Endnotes

To review the endnotes of this report, please download the PDF version.

New Census Data Show Importance of Public Health Insurance Programs

Andy Nicholas — 2010-09-24T18:19:33Z

The state-level health insurance data released by the U.S. Census Bureau last week vividly highlight the growing importance of public health programs in our state. At a time when thousands of Washingtonians have lost employer-sponsored health insurance, the data show that public health insurance is providing a crucial backstop for workers and families as the economy recovers. Yet, while the need for state-sponsored health insurance has grown rapidly throughout the recession, policymakers have enacted deep and painful cuts to these services in the current biennium. A new round of cuts announced last week will weaken our public health infrastructure even more.

The graph below shows that share of Washingtonians (population under 65) covered by employer-sponsored health insurance declined by 3.6 percentage points from 66.6 percent in 2006-07 to 63.0 percent in 2008-09. The availability of state-supported public health programs – such as Medicaid, Apple Health for Kids (S-CHIP), and the Basic Health Plan – has enabled many Washingtonians to continue receiving care, however. During the same period, the share of the population accessing public health insurance increased by 2.3 percentage points from 13.2 percent to 15.5 percent.

As the graph shows, public health programs in Washington have been particularly important in preserving coverage for children. Before the recession, about 24.8 percent of children in Washington were covered by public health insurance. By 2008-09, that share had grown to 34.2 percent – an increase of 9.4 percentage points.

Now more than ever, workers and families in Washington are in need of public health services. But new, across-the-board budget cuts announced last week will substantially weaken our state’s ability to maintain this important support system – which has already weathered cuts amounting to 10.6 percent in the current biennium. (For more information, see the latest Budget & Policy Center Policy Brief, A Step Backward: The 2009-11 State Budget.)

Furthermore, several initiatives slated to appear on the November would substantially reduce state resources in the current year and coming years, forcing even deeper cuts in public health and other vital state systems.

Note: Next week, the Census Bureau will release more detailed state-and county-level statistics on poverty, health insurance status, and host of other statistics. Stay tuned to schmudget.

Basic Health in Your County

Jeff Chapman — 2010-03-03T20:09:33Z

The interactive graph below allows you to look up the number of people currently enrolled in Basic Health in your county, the number of people that have been disenrolled since January 2009, and the number of people on the Basic Health waiting list. Simply select your county (or "statewide") from the drop down selector.

Basic Health is the only source of affordable health insurance for 70,000 Washingtonians, most of whom are working but have no access to employer-provided care. While Basic Health is a core part of the state's health care safety net, it falls far short of the need. Over the last year, budget cuts have eliminated coverage for over 35,000 people while a sour economy has dramatically increased the need for the program. As a result, the waiting list for Basic Health has grown by over 90,000 people and is now larger than total enrollment.

While the Governor's Book 2, the Senate, and the House Ways and Means budgets all preserve Basic Health, they all rely on passing revenue increases (and federal funding in the case of the House). Without moving quickly on revenue, Basic Health remains in jeopardy. And none of the proposals deal with the enormous and growing unmet need for the program.

Wait list for the Basic Health Plan now exceeds enrollment

Andy Nicholas — 2009-12-11T04:14:53Z

There are now more Washingtonians waiting to receive health coverage through the state’s Basic Health Plan (BHP) than are actually enrolled in the program. As of today, the number of people on the wait list for the program reached 79,013, while the number of enrollees stands at 78,830.

The Basic Health Plan provides affordable health insurance coverage for low-income adults in Washington State. According to the Bureau of Labor Statistics, nearly 130,000 jobs have been lost in Washington since the start of the current recession, which began in December of 2007. The BHP provides a crucial backstop for Washingtonians that have lost employer-sponsored health coverage.

Though demand for BHP coverage continues to rise, monthly premiums and annual deductibles charged to enrollees are scheduled to increase sharply in January as a result of budget cuts enacted earlier this year.

DSHS Budget Proposal would Harm Health Care, Cost Federal Funding

Jeff Chapman — 2009-12-14T21:34:01Z

Even with the specter of I-1033 behind us, the state budget situation is bleak because of the lingering impact of the economic recession. The deficit facing the Governor as she prepares her budget could be as high as $1.8 billion.

A recent memo from the Department of Social and Health Services' Health and Recovery Services Administration —- written in response to the Governor’s request for budget reduction proposals -- helps illustrate the size of the problem. Acknowledging that "these are serious cuts, and cuts on top of cuts," the Department proposed deep reductions in key health care programs:

The largest reduction ($69.2 million) would come by eliminating important benefits for lower income adults receiving Medical Assistance, including maternity support services, hospice, hearing, non-emergent dental, vision, podiatry, physical therapy, occupational therapy, speech therapy, interpreters for medical services, and Medicare Part D (prescription drugs) copays. Funding for school-based Medicaid services would also be eliminated ($5.6 million).
The proposal would eliminate access to state programs that provide health care to lower income children between 205 percent and 300 percent of the federal poverty line, taking a step backward on the state’s commitment to "Cover All Kids" in order to save $11.6 million.
Reductions in mental health care ($12.9 million) would include eliminating funding for the Program for Adaptive Living Skills and eliminating funding for community support services for individuals discharged from state hospitals.
The proposal would also eliminate drug and alcohol treatment for all low-income adults not enrolled in a separate DSHS program ($5.5 million).
There are also $8.3 million in administrative cuts and staff reductions included in the proposal.

The reductions in state spending are only part of the story. These proposed cuts would cost the state an estimated $101.4 million in federal matching funds.