03/12/2008
by Troy Nichols, Washington State Director of NFIB, on behalf of the Jobs and Health Care Coalition
A recent guest editorial painted a rosy, though incomplete picture of the state's new Health Insurance Partnership (HIP).
HIP was sold to lawmakers last year with the promise of bringing innovation, choice and portability to the small business health insurance market.
After spending $3 million and eight months trying unsuccessfully to get the program to work, HIP came back to the Legislature asking that requirements to provide plan choices and portability be delayed at least a few years. HIP also asked that the requirements for small businesses to employ at least one low-wage worker to qualify be eliminated, and explained that pooling dollars from multiple employers for part-time workers was not achievable.
The Legislature largely went along with these requests, although HIP must give priority to enrolling small businesses employing low-wage workers not currently covered by health insurance.
The Legislature also agreed to provide another $4.6 million in "seed money" through 2009 to get HIP up and running.
So, for nearly $8 million of your tax dollars, HIP will simply offer the same plans already available in the private market to a select few businesses. No innovation. No choice. No portability beyond existing law. Nothing to address rising healthcare and insurance costs.
Even more galling is that taxes from employers who already provide health insurance will be used to subsidize their competitors who do not provide coverage.
But that is just the tip of the iceberg.
Once operational, HIP hopes to provide health insurance coverage for just 9,000 people by 2013.
The projected cost? Roughly $100 million dollars -- if the Legislature funds $77.5 million in premium assistance subsidies. The other $22.5 million would go to administrative costs.
The new supplemental budget includes just $750,000 for premium assistance beginning in 2009. That is less than one percent of what is needed to achieve the program's five-year goal.
To sustain it long-term, HIP is to become the only place small businesses and individuals can obtain health insurance in our state. HIP is already studying how to absorb public employee health insurance programs as well as the private individual and small group markets.
Some 600,000 people in our state do not have health insurance.
Spending $100 million to cover just 9,000 of them sometime over the next five years is not a solution to the problem.
Sadly, the Legislature rejected proposals that would better address the needs of the uninsured and save taxpayers money in the process.
For example, the senate refused to allow insurers to design plans specifically targeted at 19-34 year olds. That group makes up more than 50 percent of the uninsured and is responsible for a substantial portion of state-paid emergency room visits. A plan designed for them would cost the state nothing, and actually save taxpayers millions. In California, analysis of a similar plan showed that 70 percent of enrollees were previously uninsured.
The senate also narrowly rejected a plan to provide subsidies directly to low-income workers without the enormous costs associated with a new government entity like HIP.
While the Legislature continues to build expensive new programs that fail to address the real problems of health insurance affordability, businesses large and small are pursuing health insurance innovations where they can.
Some large employers have chosen to self-insure. Free of unnecessary state regulations, these employers have done a better job controlling costs while providing the benefits their employees need most.
Thousands of small businesses have pooled their purchasing power through reputable Association Health Plans sponsored by legitimate Washington state membership organizations. Enrollment in these plans has doubled since 2004. AHPs now provide coverage for more than half a million Washingtonians, a third of whom were previously uninsured.
These efforts prove once again that real solutions are found in the free market, not in another government-run program.
Simply put, HIP is a "partnership" small businesses don't want and taxpayers can't afford.
Jobs and Health Care Coalition
Architects and Engineers Legislative Council
National Federation of Independent Business
Associated Builders and Contractors
Washington Association of Health Underwriters
Associated General Contractors
Washington Farm Bureau
Association of Washington Business
Washington Technology Industry Association
Building Industry Association of Washington
