HB 2355 and SB 6062, to create a state reinsurance pool to care for people with high-cost medical conditions

By ROGER STARK  | 
LEGISLATIVE MEMO
|
Jan 30, 2018

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Key Findings

  1. The Affordable Care Act (ACA), also known as Obamacare, provided federal taxpayer funds for a health care reinsurance program from 2014 through 2016.
     
  2. Before enactment of the ACA, Washington state had an effective, viable state-based high-risk pool for its individual health insurance market.
     
  3. The problem with any high-risk pool is developing an equitable funding mechanism. 
     
  4. The broadest socialization of funding for this small group of high-cost health care users should come from the state General Fund.
     
  5. With the proper broad-based tax funding mechanism, reinsurance through a high-risk pool is an excellent method of providing health care for high-cost patients, while keeping individual insurance choices and low premium costs available for everyone else.
     

Introduction
The Affordable Care Act (ACA), also known as Obamacare, provided federal taxpayer funds for a health care reinsurance program from 2014 through 2016. This money was designed to stabilize the individual and small group health insurance market by using federal money to provide subsidized insurance to high-cost patients.

Before enactment of the ACA, Washington state had an effective, viable state-based high-risk pool for its individual health insurance market. The state high-risk pool ensured that patients with high health care costs could get insurance coverage.  The ACA now directs money into the state health insurance exchanges and into the expansion of Medicaid instead.  As a result, the successful Washington State Health Insurance Pool (WSHIP) is currently not taking new enrollees and is scheduled to end in 2022.

Contrary to what was promised, the ACA has failed to reduce the cost of health insurance. As in many states, patients in the individual health insurance market in Washington are faced with ever-increasing insurance premium costs. Average premium prices increased by 23 percent for 2018 in Washington state.

Two bills in the Washington State Legislature, HB 2355 and SB 6062, would establish a variation of a high-risk pool by providing reinsurance financing for those patients in the individual market who require high-cost health care.

Download file Download the full legislative memo here