U.S. House and Senate Democrats have passed two sweeping 2,000 page bills that would fundamentally and dramatically change our health care. There are significant differences between the two bills, but the more moderate Senate bill has the best chance of passing through the conference committee and being signed by the President. Both bills passed on a strict party-line vote, with essentially no support from minority Republicans.
What will this far-reaching legislation mean for Washington state?
Washington has a 13.2 percent uninsured rate and one half of these people are in the age range of 18-34. Because of the bill’s individual mandate that would require every adult to buy health insurance, 432,000 young healthy people in the state would be forced to make this purchase whether they want to or not. The bill also requires a community rating price control on all policies which would cause these young Washingtonians to pay a higher price for coverage, while older, sicker individuals would pay less for their insurance.
On the other end of the age spectrum, 890,000 seniors have Medicare coverage in Washington. Congress plans to finance the Senate bill in part by cutting Medicare by $471 billion. Physician reimbursement would be reduced by 21%, while Medicare Advantage would essentially be eliminated, forcing 205,000 Washington seniors out of the program and back into traditional Medicare. Access to doctors is already a problem for Washington seniors because of low Medicare payments compared to private insurance. Further cuts in how much Medicare pays doctors will only make this access problem worse for seniors.
An independent Medicare Commission would be established to decide what drugs, procedures, and treatments the government would allow for seniors. These decisions would ostensibly be based on evidence of treatment effectiveness, but in reality they would be based on how to cut costs for the government. As costs rise, as they predictably will, rationing of care to seniors will, by necessity, occur.
Almost 130,000 Washington residents have health savings accounts (HSAs) and high deductible insurance plans. The Senate bill reduces the HSA contribution amount by one half and doubles the penalty for non-medical withdrawals. New government limitations will probably eliminate high deductible policies and consequently eliminate HSAs. All HSA holders would lose their personal coverage and be forced to buy traditional insurance.
The Seattle area has growing industries in biotech and medical device manufacturing. The Senate bill would add a 10-20 percent tax on these businesses. The cost would either be passed on to consumers or, more likely, would cause a reduction in medical research and development.
Almost 2.7 million workers and their family members in Washington receive health insurance through their employers’ self-insured programs. These people would be allowed to keep their insurance for five years. The plans must then comply with strict government benefit plans which would cause many employers to drop their coverage and force many workers to join a government plan. In addition, generous employer-sponsored insurance will be subject to a new 40 percent tax. In three years, 20 percent of all workers will be paying this tax and in six years, 20 percent of all households making more than $50,000 a year will have to pay this tax.
Under the Senate-passed bill the number of Medicaid recipients in Washington would immediately increase by over 280,000 people. The federal taxpayers would initially pay for these new enrollees, but within five years state taxpayers would be forced to pay at least $6.8 billion more over the following ten years. The total cost of Medicaid to Washington taxpayers would then be nearly $36 billion for that ten year period. Access to doctors for Medicaid patients is even worse than for Medicare patients because of lower doctor reimbursement rates. Adding hundreds of thousands of people to Medicaid, when these patients are already being turned away by doctors, makes no sense for either patients or taxpayers.
The Senate-passed bill still would leave an estimated 480,000 people in the state without health insurance, while adding billions to the state’s tax burden. It would increase the cost of health care and increase the deficit. A reason poll shows most Americans oppose what the President and Congress are doing. The proposed reform would have a huge negative impact on our country and the people of Washington state.
Dr. Roger Stark is a retired surgeon and a health care policy analyst at Washington Policy Center, a non-partisan independent policy research organization in Washington state.
