Health­care re­peal? Take cau­tion

Wash­ing­ton state’s ef­forts to over­haul cover­age in the 1990s was eas­ier to undo than make vi­able.

Los Angeles Times - - THE NATION - By Noam N. Levey noam.levey@la­times.com

WASH­ING­TON — Repub­li­cans in the state of Wash­ing­ton didn’t wait long in the spring of 1995 to ful­fill their pledge to roll back a sweep­ing law ex­pand­ing health cover­age in the state.

Com­ing off his­toric elec­toral gains, the GOP leg­is­la­tors scrapped much of the law while pledg­ing to make health in­surance af­ford­able and to free state res­i­dents from oner­ous gov­ern­ment man­dates.

It didn’t work out that way: The re­peal left the state’s in­surance mar­ket in sham­bles, sent pre­mi­ums sky­rock­et­ing and drove health in­sur­ers from the state. It took nearly five years to re­pair the dam­age.

Two decades later, the ill­fated ex­per­i­ment, largely rel­e­gated to aca­demic jour­nals, of­fers a cau­tion to law­mak­ers at the na­tional level as Repub­li­cans in the U.S. Se­nate race to write a bill to re­peal and re­place the fed­eral Af­ford­able Care Act.

“It’s much eas­ier to break some­thing,” said Pam MacEwan, who served on a Wash­ing­ton state com­mis­sion charged with im­ple­ment­ing the law in the mid-1990s and now over­sees the state in­surance mar­ket there. “It’s more dif­fi­cult to put Humpty Dumpty back to­gether again.… And that’s when peo­ple get hurt.”

The non­par­ti­san Con­gres­sional Bud­get Of­fice echoed that warn­ing when it con­cluded that the health­care bill passed by the House last month would desta­bi­lize in­surance mar­kets in a sixth of the coun­try and nearly dou­ble the num­ber of peo­ple without health in­surance over the next decade.

Se­nate Re­pub­li­can lead­ers con­tend that their leg­is­la­tion will be dif­fer­ent. “We’re work­ing to lower the costs and give peo­ple more per­sonal, in­di­vid­ual free­dom,” Sen. John Bar­rasso (R-Wyo.) said re­cently.

There were sim­i­lar as­sur­ances in the Wash­ing­ton State­house when leg­is­la­tors there be­gan to pull apart the Wash­ing­ton Health Ser­vices Act in the mid-1990s.

“We will do ev­ery­thing we can to stop the gov­ern­ment health­care bu­reau­cracy that is now poised to limit per­sonal choices,” Clyde Bal­lard, the Re­pub­li­can speaker of the Wash­ing­ton House of Rep­re­sen­ta­tives, said at the time.

The Health Ser­vices Act, which Demo­cratic Gov. Mike Lowry signed in May 1993, was an am­bi­tious ef­fort to over­haul the state health­care sys­tem by guar­an­tee­ing res­i­dents health in­surance and putting new con­trols on ris­ing health­care costs. It was de­signed to com­ple­ment the na­tional health­care over­haul that Pres­i­dent Clin­ton and First Lady Hil­lary Clin­ton were pur­su­ing.

Wash­ing­ton state pro­hib­ited in­sur­ers from deny­ing cover­age to con­sumers, even if they were sick, a revo­lu­tion­ary pro­tec­tion then.

A state com­mis­sion was em­pow­ered to clamp down on in­surance pre­mi­ums to limit in­creases.

And to get all Wash­ing­to­ni­ans cov­ered, the state be­came the first in the na­tion to re­quire res­i­dents to have cover­age and em­ploy­ers to of­fer health ben­e­fits.

The law was con­tro­ver­sial from its in­cep­tion, as ma­jor busi­ness groups and in­sur­ers balked at its many new reg­u­la­tions. Just a few Repub­li­cans joined Democrats in the state Leg­is­la­ture to pass the leg­is­la­tion.

Within a few months, it be­came clear that there would be prob­lems im­ple­ment­ing it, in part be­cause the state couldn’t se­cure nec­es­sary fed­eral ap­proval to re­quire em­ploy­ers to pro­vide cover­age.

“We had to re­form the re­form,” said Phil Dyer, a Re­pub­li­can who would help lead the re­peal ef­fort as chair­man of the Se­nate health com­mit­tee.

GOP leg­isla­tive can­di­dates railed against the law on the cam­paign trail in 1994. That fall, the party picked up 30 seats, tak­ing control of the House and com­ing within one seat of tak­ing the Se­nate.

When the new Leg­is­la­ture con­vened in 1995, GOP law­mak­ers set about pulling apart the law, bring­ing along Democrats who feared Repub­li­cans would re­peal it through a bal­lot mea­sure if they didn’t co­op­er­ate.

The hastily crafted re­peal — which the Leg­is­la­ture sent to the gov­er­nor in three months — kept some pop­u­lar parts of the law such as the guar­an­tee that ev­ery­one could get cover­age, even if they were sick. It scrapped parts vot­ers didn’t like, in­clud­ing the re­quire­ment that state res­i­dents have health in­surance.

The state’s in­surance mar­ket started tee­ter­ing soon af­ter­ward.

First, health in­sur­ers sought a se­ries of dou­bledigit rate in­creases in 1995 and 1996. The health plans warned that with no re­quire­ment to have cover­age, peo­ple were sign­ing up for in­surance only when they got sick, send­ing costs sky­rock­et­ing.

Then, in Novem­ber 1998, Pre­mera Blue Cross, one of the state’s lead­ing in­sur­ers, an­nounced it would stop sell­ing health plans, cit­ing more than $100 mil­lion in losses. Re­gence and Group Health Co­op­er­a­tive, the state’s other two lead­ing plans, quickly fol­lowed.

“This was a cri­sis,” for­mer Gov. Gary Locke said in a re­cent in­ter­view.

Locke, a Demo­crat elected in 1996, brought to­gether in­surance ex­ec­u­tives, state leg­is­la­tors and oth­ers to try to sal­vage the mar­ket.

The res­cue ef­fort took un­til 2000. That year, state law­mak­ers passed leg­is­la­tion al­low­ing in­sur­ers to once again screen out sick cus­tomers and reestab­lish­ing a spe­cial gov­ern­ment “high-risk pool” plan for those who couldn’t get health cover­age be­cause of a pre­ex­ist­ing med­i­cal con­di­tion.

Even those who worked on the res­cue pack­age ac­knowl­edge it was an im­per­fect so­lu­tion. When Pres­i­dent Obama signed the Af­ford­able Care Act in 2010, 1 in 7 Wash­ing­ton state res­i­dents still lacked health cover­age, fed­eral data show.

Now, the unin­sured rate in the state has been cut in half, thanks to the fed­eral health­care law.

Oba­macare not only guar­an­tees cover­age — it re­quires Amer­i­cans to have in­surance. The law also pro­vides fed­eral money to help states of­fer Med­i­caid cover­age to very low-in­come Amer­i­cans. And it funds sub­si­dies for low- and mod­er­ate-in­come peo­ple to off­set the cost of pri­vate health plans they can buy on in­surance mar­ket­places.

Wash­ing­ton’s Oba­macare mar­ket­place, which the state runs it­self, has done bet­ter than most, though even its de­fend­ers ac­knowl­edge that more must be done to control pre­mi­ums, which have risen dra­mat­i­cally for some con­sumers in re­cent years.

But many state lead­ers cau­tion that con­gres­sional Repub­li­cans rush­ing to roll back Oba­macare risk sow­ing the same kind of chaos that crip­pled Wash­ing­ton state’s in­surance mar­ket two decades ago.

“That’s what scares me,” said Ch­eryl Scott, the for­mer chief ex­ec­u­tive of Group Health Co­op­er­a­tive, who worked with the gov­er­nor to res­cue the mar­ket in the late 1990s.

“If we’re not care­ful, we are go­ing to be re­peat­ing his­tory.”

Louie Balukoff Associated Press

THEN-GOV. Mike Lowry signed the Health Ser­vices Act into law in 1993. But the re­peal crafted by GOP law­mak­ers left the state’s in­surance mar­ket in tat­ters.

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