A Washington state-sponsored health insurance plan intended to be a step toward universal health care while lowering consumer costs is facing resistance from providers and hospitals that are hemorrhaging revenue because of the coronavirus pandemic.
The Cascade Care plan would offer standardized benefits on the individual market beginning in January 2021 through the state’s online insurance exchange. The plan seeks to contain costs by capping reimbursement to providers at an average of 160% of Medicare rates.
The Affordable Care Act-compliant plan was designed by the state, which is sorting through proposals from five insurance carriers to administer Cascade Care plans in various geographic parts of the state, according to Mich’l Needham, chief policy officer for the state Health Care Authority. She declined to identify the companies.
“This public option will help consumers in every part of the state by making high-quality, affordable health coverage more accessible to all Washingtonians,” Gov. Jay Inslee (D) said in a March 2019 email before the state Legislature passed the bill and he signed it into law that May.
But it’s uncertain whether consumers in every part of the state will have access to Cascade Care, whether the plan’s networks of providers and hospitals will be robust enough to meet state regulatory standards and consumer expectations, and how much money the plan will save.
Industry Seeks Delay
Hospitals, physicians, and insurance carriers have asked Inslee to delay implementation of his public option for one year.
“Hospitals are bleeding money right now,” said Chelene Whiteaker, senior vice president for government affairs at the Washington State Hospital Association. “At a point when you’re in survival mode, you’re not thinking about how you’re going to participate in the public option, a new public policy arena.”
The cancellation of non-urgent procedures is hitting hospitals hard because profits at commercial insurance reimbursement rates on those procedures make up for losses incurred for a range of services, such as ones provided to Medicaid recipients and to a lesser extent, people on Medicare, Whiteaker said.
It’s a similar story with the state’s doctors, who along with hospitals raised concerns about the bill last year.
“We have been and are dubious of the ability of physician practices to contract with insurance carriers given the rate cap in the law,” said Sean Graham, Washington State Medical Association director of government affairs.
“Physician practices across the state are hemorrhaging money right now,” he said. An April 2 Washington State Medical Association survey showed that 99.4% of physician practices are seeing a drop in patient volumes, which Graham attributes to Inslee’s order to delay non-urgent medical procedures and because many patients are postponing routine care.
Asked whether doctors will contract with Cascade Care carriers, he said, “I just don’t think a lot of physician practices are going to be in the position to do that financially.”
The Association of Washington Healthcare Plans, an insurance carrier trade group, joined with the doctors and hospitals to ask Inslee to delay implementation.
In a March 23 letter, the group said that while it supports Inslee’s social distancing measures, as well as the halt to elective procedures, “the cancellation of elective procedures combined with significant declines in outpatient services have left many hospitals and physician practices reeling financially.”
The letter essentially says there’s no bandwidth to address implementation of Cascade Care while the state’s health-care sector is 100% engaged in the battle against Covid-19.
For these reasons, the associations and the insurance trade group asked Inslee to delay the plan “until the virus’ impacts are better understood, and we can launch a successful Cascade Care Public Option Plan in 2022.”
No Hold So Far
Inslee has not answered the letter. Press Secretary Mike Faulk said the governor’s senior health-care policy adviser, Molly Voris, would not be available for an interview until next week.
“We have not put it on hold at this point,” Needham said April 20. She added that insurers are sharing with her the challenges of assembling adequate provider networks.
The Association of Washington Healthcare Plans represents big carriers, including Premera Blue Cross, Regence BlueShield, Kaiser Permanente, and Molina Healthcare. Its executive director, Christopher Bandoli, said the letter represents the position of all members, some of whom are not in the individual health insurance market.
“Some number of plans will make it through,” Bandoli said. “I think the bigger question moving forward is will they be demonstrably cheaper than what else is on the individual market and what do they look like from a network perspective and a geographic coverage perspective.”