Understanding the Washington Health Trust

SB.5335 and the path to universal coverage and beyond

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Slides submitted 8/2/2023

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Presentation on 8/10/2023

For the latest version of these slides and other supplemental materials go to wholewashington.org/uhcc-presentations

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Today’s presenters

Andre Stackhouse

Academic background: BS in Informatics: Human-computer interaction, University of Washington

Professional background: Software engineering at Code.org and Microsoft

Political background: 2020 Democratic Party delegate (state & national), Medicare for All Everywhere cofounder, Whole Washington campaign director (I-1471)

Erin Georgen

Academic background: AAS in Physical Therapy, AA in Graphic Design

Professional background: Currently, Technical Communications & Graphic Design. Previous Professional experience includes Health Services Technician in the USCG, Physical Therapist Assistant

Political background: Primary Sponsor of the 2018 Ballot Initiative I-1600

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Whole Washington

Whole Washington is a 501(c)4 nonprofit organization founded in 2017 to advance the passage of universal public healthcare at the state, regional, and federal level.

We are the organizers behind The Washington Health Trust (WHT) in its multiple iterations both as legislation and ballot initiative.

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Timeline of important healthcare policies

• 2018 - I-1600 - The Whole Washington Health Trust is first introduced to the public as an initiative to the people
• 2019
• SB.5222 - The Whole Washington Health Trust (WWHT) is first introduced as legislation in the WA Senate.
• Long-term Care Act (WA Cares) passes establishing taxes and benefits for long-term care
• CascadeCare signed into law
• 2021
• SB.5399 - The Washington Legislature creates the Universal Health Care Commission (UHCC)
• I-1362 - WWHT reintroduced as an initiative to the legislature, income tax removed (replaced with employment tax)
• SB.5204 - WWHT reintroduced to Senate with new sponsors and modified employer spending requirement
• Universal Healthcare Work Group Report published, examines three universal health care models for Washington
• ESSB 5096 passes - Washington introduces capital gains tax
• 2022
• I-1471 - WWHT renamed to The Washington Health Trust (WHT), individual premium removed, UHCC elevated to WHT Board
• SB.5335 - WHT reintroduced into Senate
• 1332 waiver acquired to expand coverage to undocumented residents
• 2023 - Washington State Supreme Court rules capital gains tax is constitutional

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Our goals

Today

• A shared definition of universal healthcare
• Explain how the Washington Health Trust works
• Explain our solutions to the known barriers like ERISA and Medicare waivers
• Answer your questions as best we can

The future

• Establish an ongoing and collaborative relationship with the Universal Health Care Commission (UHCC)
• A more detailed discussion of the financial considerations with the Finance Technical Advisory Committee (FTAC)
• Co-development of universal healthcare policy for recommendation to the WA legislature

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Defining Universal Healthcare

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Defining Universal Healthcare: World Health Organization

“Universal health coverage means that all people have access to the full range of quality health services they need, when and where they need them, without financial hardship.”

Key elements found in successful models:

1. Everyone is eligible to enroll or automatically enrolled
2. Universal set of essential health benefits
3. Uniform billing and reimbursement
4. Significantly publicly-funded
5. Non-profit

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“Of all the forms of inequality, injustice in health is the most shocking and inhuman because it often results in physical death”

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Models considered by the Universal Health Care Work Group

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The Washington Health Trust

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The Washington Health Trust: Origins

• Originally based on and inspired by the Washington Health Security Trust (WHST) developed by Health Care for All Washington.
• Tax funding rates and mechanisms guided by fiscal studies performed by Gerald Friedman, economics professor at the University of Massachusetts at Amherst.
• Technical language reviewed by Employment Security Department (ESD) and Department of Revenue (DOR).
• Key provisions found in Sec 101 were inspired by the core values consistently expressed by community organizations, providers, and individuals.

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The Washington Health Trust (WHT)

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Creates Public Options that any WA State individual or company can enroll in for coverage.

Generates revenue via taxes to pay for healthcare expenses.

Gives existing entities the authority and responsibilities to transition to and maintain a statewide universal healthcare system.

What will the Washington Health Trust legislation do?

• Creates the Washington Health Trust (WHT)
• A bank account to store funds and send reimbursements from
• A unified financing system for essential health benefits
• Creates the Washington Health Trust Board (WHTB)
• Manages the Washington Health Trust
• Defines a single essential health benefits package
• Ensures all individuals (and their employers) can opt in voluntarily
• Establishes the mechanisms for annual collective negotiations with qualified providers for reimbursement rates
• Coordinates with Health Care Authority (HCA) to allocate funding for Community Health Providers to improve access to community-based care
• Contracts with Centers for Medicare & Medicaid Services (CMS) to offer essential health benefits package to Medicare enrollees as a Medicare Advantage plan managed by CMS
• Creates a transitional Health Options Program
• Managed by Health Care Authority (HCA)
• Provides cost assistance & enrollment support to uninsured or underinsured
• Provides oversight on impacts to coverage during transition & recommends policy improvements
• Establishes funding mechanisms through taxes and enforced by Employment Security Department (ESD) & Department of Revenue (DOR)
• New long term capital gains tax (DOR)
• Employment contribution (payroll tax) to enforce a required health care expenditure for each employee by employers (ESD)
• Sole-proprietor contribution

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In a nutshell … a Model A/B hybrid

The Washington Health Trust is an All Payer model

with a Pay-to-Play requirement for employers

It includes Public Options for all Washington residents,

Public Health funding for participating Community Health Providers,

As well as the financing and transition plans necessary to achieve universal coverage

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Governance

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Governance: Washington Health Trust Board

• UHCC members given the option to be appointed to the board immediately
• Expands the board to include new members
• Creates committees to represent and collaborate with key stakeholders
• Citizen committee - publishes reports and holds public meetings
• Provider committee - facilitates collective bargaining agreement & negotiates reimbursement rates
• Finance committee - manages the WHT and maintains its revenues and solvency.
• Allocates funding to community health providers
• Supports HCA to acquire federal waivers

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Governance: Health Care Authority

• Provides Accountability and Oversight: The HCA is the contracting authority for most state-managed publicly funded health benefits. The HCA’s existing authorities, responsibilities, and structures are in line with these responsibilities.
• Coordinates integration efforts: The HCA leads all Direct Integration efforts for state-managed publicly funded health benefits programs & facilitate enrollment for all residents prior to integration.
• Acquires federal waivers: to integrate federal programs and funding into the WHT.

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Eligibility

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Eligibility: Individuals

• Individual eligibility is based on residency regardless of social determinants of health. All Washington residents are eligible, but so are some nonresidents.
• Based on Washington state’s residency definition (30 days)
• Eligible nonresidents includes the following and can be expanded by the board
• Students Attending College
• Workers Employed in WA
• Spouses and Dependents of Eligible nonresidents

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Eligibility: Employers

• All employers can voluntarily pay ESD to enroll their employees in the WHT.�The cost for an employee equals the employers per-employee required health expenditure.
• All employees in Washington are eligible to enroll even if their employer offers different coverage.�Employers can choose to meet their required health spending for an employee in a different way. The employee can still enroll in the WHT voluntarily and apply any amount the employer has paid to ESD towards the cost of enrollment in the WHT.

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Benefits & Services

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Benefits & Services: Essential Benefits Package

• Hospital services, including inpatient and hospital-based outpatient care and 24-hour emergency services
• Ambulatory primary and specialty services, including preventative care and chronic disease management
• Prescription drugs, medical devices, and biological products
• Mental health and substance use disorder treatment services
• Laboratory and other diagnostic services, including diagnostic imaging services
• Reproductive, maternity, and newborn care
• Pediatric primary and specialty care
• Palliative care and end-of-life care services
• Oral health, audiology, and vision services
• Short-term rehabilitative and habilitative services and devices
• Licensed naturopathic, acupuncture, and massage therapies

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Benefits & Services: Essential Benefits Package

Defining the details of the benefits coverage is the responsibility of the WHT Board (WHTB).

• Must offer the same set of benefits to all enrollees.
• Must meet criteria required for contracting with HCA for existing publicly funded health benefits.
• Can be expanded by the WHTB.

Transitional Benefits Alignment: HCA takes steps to align the benefits for all state-managed publicly funded benefits (including the new Health Options Program) towards this benefits package.

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Provider Reimbursement & Participation

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All licensed providers are eligible to receive reimbursement for services from the WHT, but participation is optional.

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All providers and health systems giving care to a WHT enrollee:

• can accept the fee-for-service (FFS) rates set by the WHT Board
• can’t be denied reimbursement by the WHT for any essential health benefits

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Rate Estimation: Negotiated by WHTB, but analysis was based on reimbursement rate above Medicare.

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Providers

Aligned Reimbursement Rates

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Negotiated Annually & Set by WHTB in coordination with the HCA

All Providers & Health Systems can accept the negotiated FFS reimbursement rates.�WA Providers & Health Systems can participate in annual collective negotiations to set the rates via

• Fee-for-service (FFS) for Private Practice Providers.
• Global Budgets in combination with FFS for nonprofit coordinating private practice providers & health systems.

Transitional Rate Alignment: HCA takes steps to align the reimbursement rates for all state-managed publicly funded benefits (including the new Health Options Program) towards these rates.

Global budgeting

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The WHTB will work with the HCA to make considerations and recommendations with Community Health Providers negotiating for Global Budgets based on:

• Health needs of those living in each regional health district
• The scope of services the provider offers
• Quality and effectiveness of the providers care standards
• Needs-based assistance in each regional health district

Cost Containment

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Cost containment

The WHT Board is given the responsibility and authority to enact cost controls for the WHT without limiting access to or reducing quality of care.

Cost controls designed into SB.5335:

• One single Essential Health Benefits package with reliable and just reimbursement rates.
• HCA can take steps to align Benefits & Reimbursement rates for publicly funded benefits programs they manage.

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Financing

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Financing

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Employer / Employee Contribution Flexibility

The bulk of new funding comes from employers

Examples of Employer Expenditures

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Context

Currently, the average WA employee earns $57,290 annually. The average WA employee pays a monthly average of $475 for individual plans and $1,174 for families. The average cost of employer-sponsored health insurance for employers' annual premiums was $7,739 for single coverage and $22,221 for family coverage. The report also found that the average annual deductible amount, for employees, was $1,669 for covered workers.

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Infrastructure

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Infrastructure

WHT Board (under the Department of Health)

Develop & maintain policies, budgets & mechanisms to operate the WHT

Health Care Authority

Provide Oversight & Accountability

Enrollment Support & Infrastructure

Coordinate Integration Efforts

Ensure Equitable Access to Benefits and Cost Assistance for All During Transition

Governor & Legislature

Make Startup Budget Appropriations

Review Reports & Follow-up on Recommendations

Employment Security Department (ESD)

Enforce Required Health Care Expenditures

Facilitate Employer/Employee Participation

Department of Revenue (DOR)

Enforce Capital Gains tax

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Enrollment

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Enrollment

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• The enrollment process is not specified in legislation but is managed by the WHTB & HCA
• Can be done through existing infrastructure like WAHealthPlanFinder
• Businesses may pay for employee enrollment for all employees or on a per-employee basis by paying the employer contribution to ESD
• Small businesses may apply for business assistance with ESD

Working with ERISA

ERISA laws prevent WA from requiring employers who provide ERISA protected health benefits to participate directly in the WHT. However, Washington State Can:

• Require employers to provide coverage for minimum essential coverage.
• Require employers to spend an amount on each employee’s health care equal to the cost for enrolling the employee in the WHT.
• Define the health spending that counts towards employers’ required health care spending.
• Create a framework to provide Health Coverage & Cost Equity for employees that are not enrolled in the WHT (as well as those who are uninsured or underinsured).
• Cover all kids. This is a benefit to working families that supports all of their employers too.

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The Washington Health Trust’s ERISA workaround was modeled after Healthy San Francisco’s city-option which has survived legal challenges based on ERISA.

Employer Health Spending Equity

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10.5%

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Required �Health Care Expenditure

All employers are required to pay the same percentage �of each employee’s payroll toward the employee’s health care.

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Private Insurance Option

Direct employee healthcare funding

WA Cares

(Long Term Care)

If the employer-sponsored coverage or contributions don’t meet or exceed 10.5%, the difference must be paid to the ESD.

Transition

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Transition:

Health Options Plan - Support for the Uninsured & Underinsured

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Managed by the HCA - The Health Options Plan provides support for enrollment during transition. Ensures Health Coverage & Cost Equity for those not enrolled in WHT.

Infrastructure: The HCA can expand existing structures/programs currently used to support insurance enrollment and provide insurance assistance (Navigators Program & WAHealthPlanFinder.org).

Transition: Medicare integration & waivers

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• The bill instructs HCA to work on a Demonstration waiver (#2)
• During the transition, the WHT is a Medicare Advantage Plan with Part D for those who voluntarily enroll (#4)
• The Health Options Program reimburses for any gaps for those that don’t enroll (#6)

We must pass state law & create a universal health care infrastructure before a Federal Waiver for integration can be approved.

Transition: The WA Health Benefit Exchange

• The federal funds for the cost assistance provided through the exchanges are folded into the WHT
• The WHT would be the only plan with cost assistance
• The exchange infrastructure can still be used by HCA to support health coverage enrollment and assessing eligibility for medicaid benefits
• Happens after 51% enrollment across all state-managed plans (current: 40%)

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Transition: Year-by-year

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In a nutshell … a pathway to single payer

The Washington Health Trust establishes a single benefits package and a public option that can immediately begin to offer everyone coverage.

It outlines a framework and transition plan through voluntary enrollment, employer participation, and integration of state and federal programs which can achieve universal single payer healthcare.

The Washington Health Trust is an All Payer model

with a Pay-to-Play requirement for employers

It includes a Public Option for everyone,

Public Health funding for participating Community Health Providers,

As well as the financing and transition plans necessary to achieve universal coverage

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Washington can lead

A road to national single payer through the states

Questions

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