The Affordable Care Act (ACA) requires that after January 1, 2014, all health insurance policies must contain 10 benefit mandates as determined by federal regulators. Because of this rule, 16 million people nationally and 290,000 in Washington state lost their existing health insurance.
The administration realized this was a huge political problem and in November 2013, President Obama overruled this provision in the ACA. He proclaimed that people in the individual and small group markets who were facing the loss of their plans could keep their existing insurance for one additional year. He also suspended the individual mandate for one year for these people and allowed them to purchase less-expensive catastrophic plans.
The president’s announcement provided no relief, however, for people living in Washington state. The same day Insurance Commissioner Mike Kreidler announced he would not allow President Obama’s offer to be available to individuals or families in this state, and he did not allow the continuation of any existing health insurance plans.
In addition, officials in Washington state currently ban citizens from buying health insurance in other states, forcing consumers to choose among a small handful of in-state insurers. The vast majority of individual health insurance policies sold in Washington are sold by only three carriers. This further limits price competition and choices for health care consumers.
Washington state officials also ban the sale of low-cost catastrophic health insurance plans.
Legislation has been introduced, SB 6464 and HB 2221, that would allow two alternatives to the insurance commissioner’s ruling. First, people enrolled in individual and small group plans as of October 1, 2013, could continue those plans outside of the state health insurance exchange. Second, out-of-state insurance companies could offer individual and small group plans, including catastrophic plans, to residents of Washington state, as long as those plans meet the insurance laws and regulations of their home state.
SB 6464 and HB 2221 have the following features and requirements. These bills would:
• Apply only to the individual and small group market.
• Reduce costs by providing more health insurance options, including catastrophic plans, for consumers in Washington state.
• Reduce the number of uninsured by increasing the number of insurance carriers and the number of policies available in Washington state.
• Allow people to keep their existing insurance plans if they like them.
• Be in compliance with the president’s unilateral changes to the Affordable Care Act.
Ideally, to reduce costs and increase choice and the quality of health services, patients, as consumers of health care, should have as many insurance options as possible available to them. Federal regulators, through the ACA, and state regulators, through the insurance commissioner’s office, have severely restricted the choices Washington state patients have in the health insurance market. SB 6464 and HB 2221 would expand the choices for Washington state health care consumers.
The proposals would revitalize the in-state insurance market by increasing the number of insurance plans and the number of insurance companies allowed to do business in Washington state. Individuals and small groups could tailor their health insurance to their specific needs and budgets. Price competition among more insurers would likely lower costs and improve coverage options for consumers, as it does in multi-state markets for other types of insurance.
These bills have the potential to significantly reduce the number of uninsured in Washington state through the availability of more affordable health insurance plans. As public policy, the bills show respect for Washington residents by expanding the ability of families and individuals to make their own choices about where to buy health coverage and how much they want to pay. The Washington Policy Center has long been a supporter of legalizing the interstate purchase of health insurance. This is good public policy and would benefit health care users in Washington state.