Democratic Socialists Should Support Washington State’s I-1600
By Erin Georgen, Initiative Writing Committee Chair & ProgCode Member
Recently, an article appeared on Medium with a number of inaccuracies (or, at best, misunderstandings) about Washington State’s universal health care initiative, WA I-1600.
This is an effort to provide a rebuttal to the article. Universal health care has become the focus of many progressive efforts across the country, and I-1600 is just one of them. The current healthcare system is unnecessarily complex. Unifying and simplifying it at the state level is possible, but challenging. It’s difficult to understand (or explain) because the current system is so complex and divided. On top of this, universal health care systems result in something that’s a completely foreign concept for most Americans: health insurance motivated to meet the health needs of people instead of ensuring profits for shareholders.
Universal Nonprofit Coverage
I-1600 would create the US’s first publicly funded nonprofit health insurance, where everyone in the state can enroll in a single expanded-benefits package with the same cost protections and that is backed by dedicated funding resources. The state would be given all the authority and flexibility needed to relieve residents, businesses and providers of as much bureaucracy as possible, and to coordinate with all federally-funded benefits programs. It will even be able to coordinate with supplemental insurance of your choice or one provided by an employer. It will be the first insurance of its kind, designed to meet the needs of people in every way possible and empowered with dedicated funding resources.
There is nothing about I-1600 that would prevent state residents from obtaining different coverage, additional coverage, or from supplementing other coverage (like Medicare) through the trust. However, that doesn’t make it a “public option” any more than Medicaid coverage is an “option” for low-income residents who are eligible for Medicaid. Just as with other public benefits, residents have to electively enroll in the new trust in order to receive the benefits.
All residents will be eligible for benefits from the trust and all residents will be able to enroll in the trust, but residents will not be mandated to enroll in the trust. The benefits package is better than benefits currently available through any of the public programs. The cost protections in I-1600 ensure that the coverage will also be less expensive than any other similar coverage available on or off the Washington Health Benefits Exchange.
The the long term goal of I-1600 is not subtle. It seeks in all ways possible to achieve a single payer financing system to cover an essential set of benefits for all residents. The mission requires transitioning the healthcare spending of Washington from costly and unpredictable premiums, co-pays, coinsurance, deductibles, and out-of-pocket costs (paid by individuals and businesses) to more fair and predictable taxes (also paid by individuals and businesses). The new trust can establish premiums ($200 maximum monthly) and prescription co-pays ($250 maximum annually) for adults who are mid- to high-earners, but the premiums and co-pays are designed to phase out once a majority of residents are enrolled.
The expanded and improved coverage would be funded by the most equitable and progressive tax package in Washington state history. The opposition will call it “the largest tax increase in Washington state history!” They are right, but they want you to look your at wallet with a very narrow focus.
Also, I-1600 would offer the largest reduction in real spending for Washington’s residents and businesses, resulting in a net savings of over $9 billion each year. That savings even takes into account the temporarily displaced workers’ retraining funds, reimbursing residents for Medicare premiums, expanding coverage to 700,000 more residents, and the increases in healthcare provided to residents currently face financial barriers. The cost of healthcare would also be distributed in a more equitable way than it is now. The biggest savings would be felt by working middle class families and businesses, but 95% of residents and most employers would see some reduction in real healthcare spending in addition to a vast improvement in coverage.
Many non-residents in the state will also see reduced coverage costs. Two misconceptions about I-1600 are that it won’t cover migrants and that non-residents wouldn’t be eligible. However, non-residents attending college or employed within the state are always eligible, as well as their dependents. In fact, I-1600 is in alignment with the Health Care Authority’s definition of “resident” under the Affordable Care Act. The newly formed trust will have a board that can consider expanding eligibility even further.
Expanded Benefits and Cost Protections
Like many other state-based proposals for universal healthcare, I-1600 would expand the benefits available to Washington through a nonprofit, publicly funded health insurance program. It will reduce premiums and out-of-pocket costs, negotiate better prices, and reduce administrative waste. The largest savings in I–1600 actually comes from expanding coverage and ensuring that EVERYONE can enroll in it.
This simplifies the billing and coverage processes and improves collective bargaining power. Providers will enjoy a more simplified, fair and collective bargaining process, and will avoid the headaches of determining what is and is not covered for a patient.
It will also help eliminate the unnecessary administration by providers leading to more effective and efficient reimbursement processes. Instead of dealing with the more-than-150 plans currently available, virtually all residents would be covered on the same plan and have a specific set of baseline benefits. Everyone benefits from the cost savings achieved when prices are negotiated on behalf of providers and patients in a unified way.
Community Health Providers & Nonprofit Healthcare Financing
One of the most unique elements of I-1600 is the reimbursement options available to nonprofit providers who are coordinating to meet the healthcare needs of residents. All providers who are qualified to provide covered services will be able to negotiate collectively for fee-for-service reimbursements. Nonprofit providers will have options to negotiate with the trust for global budgets, as Community Health Providers.
Rural providers in Washington are currently at the mercy of the local economies, and we have seen many rural hospitals and clinics close as a result. Rural residents face potentially hours of driving for even routine health care, and many only have one or two insurers offering coverage in their area. Providers who participate as Community Health Providers would negotiate to achieve more advantageous reimbursement arrangements, focusing on the needs of residents in the area, and thereby fundamentally changing the dynamic of healthcare across the state. The bulk of providers in Washington would be eligible to negotiate in this way, and new opportunities for providers to compete for real healthcare demand will be created.
I-1600 would shift public funding away from multi-payer for-profit insurance and towards providers for healthcare. I-1600 would require the Health Care Authority of Washington to unify the coverage and reimbursements to coordinate with the trust. Washington spends an excess $11–12 Billion on administrative expenses each year just for the luxury of having so many confusing coverage “choices” with so many different reimbursement rates, coverages, and processes. I-1600 would eliminate this waste within our state health programs even without federal waivers. Beyond that, for-profit insurers would be phased out of publicly funded essential healthcare.
Currently, Washington contracts the health benefits under its authority (Medicaid, for example) to six insurers, four of which are for-profit entities. The new health trust created in I-1600 would not be able to contract out its duties to a for-profit insurer unless the insurer is providing you additional coverage and you elect it. The same rules would apply to the Health Care Authority of Washington by 2025. Regardless of federal waivers, for-profit insurers’ ability to contract for publicly-funded and essential healthcare can be phased out in Washington.
Ensures Financial Flexibility to Offset Reductions Possible in Federal Funding
Future federal funding cuts for programs like Medicaid and Medicare are a real threat to the current system. With an efficient universal healthcare system, that includes state-level revenues, our state will be better equipped to handle these challenges without cutting benefits for those who depend on them. The new health trust would have financial flexibility and significant dedicated revenues from within our state. In addition, the state legislators will be obligated to replace reduced funding, instead of reducing benefits (currently there is no obligation for legislators to do this).
Even without waivers, the trust can operate to administer federally-funded benefits. Those eligible for Medicaid (or other federally-funded programs) will be able to enroll in the new health trust for those benefits. The trust would be able to receive the federal funding to administer those benefits, in the same way other insurers do now. If a federal waiver is approved, the funding would go directly to the trust. In an economic upturn, less residents with be eligible for Medicaid because residents would be earning more. This results in less Medicaid funding being available to the trust, but higher revenues from the state tax revenues going directly to the trust.
I-1600 does not depend on federal waivers for success. Instead, it would give our state the financial resources and legal directives needed to rise to every occasion and weather any potential storm.
A Positive Step Towards a National Medicare for All
The authors of I-1600 considered a number of “what if” questions and recognized that I-1600 and universal healthcare is uncharted territory in the US. A considerable amount of effort went into ensuring the trust could adapt, evolve, and improve as it helps shape a new healthcare legacy for Washington. It is a journey that would also contribute to the national efforts to guarantee healthcare for all. (See, DSA’s 2017 Priorities Resolution on Universal Healthcare.)
Though our democracy is struggling with the weight of wealth disparity and corporate influence, we are still fundamentally a social democratic republic of states. Many of our nation’s greatest national achievements were grown from state and locally-led efforts to engage, educate, and empower voters to demand results from their government.
For just one example: In 1869, the territory of Wyoming was the first to give women full voting access followed by some voting access in Utah the following year. State-led efforts were built for decades, experiencing many wins and losses. Finally, in 1920, the Nineteenth Amendment was ratified by a majority of states, and access to voting could no longer be denied on the basis of sex. It wasn’t ratified by Mississippi in 1984. It is a pattern seen throughout the history and evolution of US politics. Even the current national efforts to limit government, defund programs and deregulate industries are fueled by state-based efforts.
Our democracy can move quite slowly, but it moves the direction coalitions engaged in civics lead it. It also moves a lot faster when people stand together and demand that elected leaders work on a solution. Instead of debating whether the government has a responsibility in ensuring everyone can get medically necessary care, I-1600 would send Washington’s leaders a clear message from Washington voters: “Yes, the government is responsible for ensuring healthcare and reducing financial barriers.” It is a statement that will echo across the nation, but it’s going to take all hands on deck.
I-1600 is a people’s initiative, born from volunteer-led organization. Because universal healthcare will never be championed by big donors, it must be championed by people. Often, the only thing standing in the way of realizing progress is our ability to imagine the vastness of what is possible when everyday people work together and fight for common goals. I-1600 is an opportunity and there is no time like the present. The question isn’t whether you should support this opportunity to shape the course of history, but rather whether you are ready to fight for it.
Erin Georgen is a member of Progressive Coders Network. She is a Physical Therapist Assistant and a design/marketing small business owner. Erin served in the US Coast Guard and has worked in the military, the for-profit, and the non-profit health sector totaling 14 years. She had an opportunity to expand her perspective of the healthcare and insurance industry while doing creative work for ObamacareFacts.com where she researched, fact-checked, and answered questions about provisions and implications of the Affordable Care Act (and related legislation) on different individuals and families. Recently, Erin was also appointed Secretary for the Third LD Democrats.