issue area reports | education, workforce and health care health care
Legislators introduced several health care bills this session that were intended to promote affordability and transparency but could have devastating impacts on health care access in communities across Washington.
AWB and our members spent a considerable amount of time educating lawmakers on the actual impact of proposed health care policies. For example, several bills would have imposed significant regulatory burdens and increased overhead costs without improving access to care for patients. These costs are often passed on to consumers, including employers who provide health insurance benefits to their employees. Throughout our testimony, AWB highlighted the impact of rising premium rates on our small business members and their employees.
Despite passing the largest tax increase in state history, lawmakers made significant cuts to health care services, especially for some of Washington’ s most vulnerable residents. The Legislature cut Medicaid managed care organizations by 1 %, reducing reimbursements to health care providers for physical health by $ 106.2 million($ 32.1 million in state funds and an additional $ 74.1 million in federal matching funds). A similar cut for behavioral health was also passed, totaling $ 27.7 million in lost state and federal funding. Further, Medicaid reimbursement rates for laboratory services were capped at 80 % of Medicare, cutting health care provider funding by an additional $ 10.5 million in state funding and $ 22.1 million in federal funding.
Washington’ s hospitals were hit especially hard this session, threatening the financial solvency of health care centers in rural and urban communities across the state. In an attempt to save the state money, the Legislature capped the amount that hospitals can be reimbursed for care provided to public employees, including teachers. Hospitals are expected to lose $ 100 million a year from this cut. Our hospitals are already undercompensated for care provided to residents on Medicaid( representing 25 % of Washingtonians) and now will be similarly undercompensated for care provided to the 15-20 % of residents on the public employee and school employee benefit board health plans. These cuts do not reduce the cost of providing health care. They will only shift the costs to payers on commercial plans, including employer-sponsored healthcare.
Hospitals are subject to several new taxes passed this year. Hospitals must now pay sales tax on certain services, expected to cost $ 80 million a year. They also are now subject to a business and occupation surcharge, expected to cost an additional $ 77 million per year. It is concerning to note that these decisions were made against the backdrop of looming cuts to federal health care programs, which would further reduce resources for hospitals.
These cuts are already reducing access to health care services in Washington. Shortly after the session ended, Valley Medical Center in Renton laid off 101 employees and announced the closure of several hospital units and clinics, citing the loss of state and federal Medicaid funding. These units include maternal fetal medicine, primary care, inpatient pediatrics, pediatric neurology and occupational health services.
SB 5083 cutting hospital funding
Passed / AWB Opposed sponsor: Sen. June Robinson, D-Everett
This bill caps the reimbursements that the state’ s public employee insurance plans pay to hospitals for services. It was improved with amendments, but AWB still has concerns about its impact on hospitals and patient care. The final bill passed the Senate by a vote of 29-19 and the House 57-39, with several Democrats joining Republicans in voting against it.
HB 1589 insurance carriers
Failed / AWB Opposed sponsor: Rep. Dan Bronoske, D-Lakewood
This bill would have required health carriers to follow so-called good faith legal standards when negotiating with providers and prohibited certain provisions from provider contracts. It would have created an administrative burden and significantly increased the cost of health insurance. The bill passed the House 73-23 but failed to advance in the Senate.
SB 5118 international medical grads
Passed / AWB supported sponsor: Sen. Javier Valdez, D-Seattle
This bill updates the requirements for the clinical experience license for international medical graduates. It removes outdated
Bill considered as part of AWB’ s voting record
Favorable outcome for Washington businesses
Missed Opportunities
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