From the Director - Affordable Health Insurance: Proposed Legislation Being Considered

The runaway cost of health insurance is an issue in our nation’s capital as well as in statehouses throughout the country.

Massachusetts and California have sought to increase accessibility and other states are positioned to follow suit. Affordable health insurance has been identified as a top priority by Governor Gregoire. Many Washington city officials also share the concern about the rising costs of health care and health insurance.

Is There A Solution?

Many suggestions have been put forth in recent years to address the health care crisis. As we’ve found, there is no easy answer. This week, the health committees in the House and Senate held joint meetings on HB 1569, a proposal to reform our state’s health care system.

This measure seeks to dramatically reduce health insurance costs by creating a "buying" consortium of over 1,000,000 individuals. It does so by combining all individual insurance purchasers, association plans, small businesses, and government plans into a single purchasing consortium. This program would be administered by the state’s Health Care Authority. The belief is that a large purchasing consortium could force down health care costs.

As proposed, the state would develop four to five health insurance plans. Employees would select which plan they wanted and employers would no longer negotiate with employees about which plans to offer. The employers would establish the amount they would contribute for insurance and employees would be able to use that contribution to defray the cost of the plan they had selected.

From the standpoint of those currently insured through the AWC Employee Benefit Trust, this proposal would create a number of problems. It would:

• Cost more than comparable AWC plans;
• Impact collective bargaining agreements;
• Increase exposure for LEOFF 1 expenses;
• Eliminate the benefits of the hugely-successful AWC Wellness programs; and
• Likely result in a doubling of costs for retirees.

These are concerns shared by a number of other association representatives who testified at the hearings.

In Closing

While we do not expect this proposal to be enacted into law, city officials should note that the state is looking for solutions to the high cost of insurance, and the lack of affordability of certain state programs. The Legislature is envious of the successes of association plans and is seeking ways to gain those benefits. While we share the state’s concerns regarding the high cost of health insurance, we do not wish to see our members harmed by the state’s efforts to address this issue.

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