HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Wednesday, February 10, 2010

Washington State Considers Cheap, Limited Health Insurance

A special health insurance program for low-income adults in Washington State is set to close later this year, ending coverage for about 65,000 low income people who do not qualify for Medicaid, unless lawmakers come up with $160 million in new funding. This program is not alone. USA Today reports that 

[t]he troubled economy is forcing Washington and other states to pare back health insurance programs for low-income people, even as growing joblessness boosts demand for help. Five of six states that use state funds to assist adults not covered by Medicaid are considering cuts, barring new enrollment or raising fees.

The more than 250,000 people in the state programs are adults who don't qualify for the joint federal-state Medicaid program, either because they don't have children or earn more than the tight limits states impose on Medicaid eligibility. They represent a tiny fraction of people who get government health insurance, yet the state programs are often their sole option for coverage.

"They're not offered insurance through their jobs," says Rebecca Kavoussi of the Community Health Network of Washington state, which runs clinics and an insurance plan.

The U.S. Senate passed a health bill that includes some funding for the state programs. That bill and one the House of Representatives passed would also expand Medicaid and offer federal subsidies to help low- and middle-income Americans buy insurance. The fate of the bills is uncertain as Democrats regroup after recently losing a key Senate seat to Republican Scott Brown of Massachusetts.

According to the Puget Sound Business Journal Report, Washington State is considering controlling premiums by capping how much a plan will pay for health care. According to the WSJ Health Blog 

[t]he state has asked insurers to submit bids for a program that would include coinsurance payments of 30% for inpatient treatment, and pay out a maximum of $75,000 a year ....That may sound like a lot, but people who are really sick or seriously injured can easily run up far higher costs. Current state regulations don’t allow insurers to sell policies like this ....

A few years back, Tennessee put in place a somewhat similar plan with an even lower annual cap ($25,000). As of 2007, the premium was about $150 a month.

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