The Washington Legislature is sharpening its ax for another round of budget cuts, with additional billions to be pared from the next state budget.
But the news isn’t all bad in Olympia — or in Clallam County.
Olympic Medical Center CEO Eric Lewis said as the state incorporates changes required by the federal Affordable Care Act — “Obamacare” — the number of Clallam County’s uninsured may drop from an estimated 10,000 to as few as 3,000-4,000.
Lewis is quick to note these are just rough estimates, based on early and incomplete information.
But he sees it as good news, particularly for those who work full time and earn a modest salary at a company that doesn’t provide health insurance.
The changes are twofold. Medicaid, the state’s program for providing health care to those living in poverty, will be greatly expanded. To be eligible for the program today an individual or family must be living at or below the poverty level. Under the Affordable Care Act, eligibility will be expanded to those with an income of up to 138 percent of the poverty level.
Lewis said that alone may bring as many as 3,000-4,000 Clallam residents onto the Medicaid rolls.
The news for the state budget is doubly good. Through two programs, Washington Basic Health and the Disability Lifeline, the state now provides health care to those in households with an income between 100 percent and 138 percent of the poverty level.
Those two programs likely will be folded into the new Medicaid expansion.
Because the federal government will for the first three years pick up 100 percent of the cost of those newly eligible for Medicaid, the state may save up to $100 million that it otherwise would have spent on the two existing programs.
Those making more than 138 percent of the poverty level, but who are uninsured, will be able to turn to a new “health insurance exchange” to shop for the best prices on health insurance. Those who purchase through the system are expected enjoy the cost savings of “group” plans and may qualify for additional government assistance, including tax credits.
State Rep. Ross Hunter recently discussed the exchange, saying it “will cover an additional 400,000 or so people, leaving almost everyone in Washington covered.”
“It’s good news for our community and for Olympic Medical,” Lewis said. “Come Jan. 1, 2014, a lot of good things will happen to provide access to those who aren’t covered.”
Lewis said the changes aren’t all good, noting that the expansion of Medicaid coverage was partly funded by cuts in reimbursements to Medicare, a significant source of funding for OMC. He said the cuts, which began in 2011, will over a 10-year period reduce Medicare reimbursements to OMC by $26 million.
He added, “We’re very excited about the Medicaid expansion because the Medicare cuts are already in law.”
Lewis said that while the Affordable Care Act provides few specifics on means to hold down medical costs, the industry knows it has to step up to the challenge.
“There is a lot of work going on throughout the medical care system to bring down the cost of delivery,” Lewis said. “There’s a major emphasis by pretty much everybody — we know we’ve got to control costs. We’re under a lot of pressure.”
State Rep. Steve Tharinger agreed the changes are positive, but also noted the details have yet to be worked out.
Managing the new health care exchange will be the task of the Exchange Board, which was established and funded by the Washington Legislature in 2012. “The exchange will give us a marketplace where people who aren’t insured, and the smaller employers, can shop around for a reasonable price,” Tharinger said.
He also said the new program may not serve everyone’s needs, noting there likely will be a gap in coverage for those earning more than 138 percent of the poverty level but who are still unable to purchase private insurance, even through the exchange.
Nevertheless, he said, “The Medicaid expansion is huge. This will provide OMC with compensation for the providers.”
He added that providing universal coverage, which the Affordable Care Act seeks to achieve, serves as a “first step in getting us to a more cost-effective coverage.”
He also noted the new program is complicated. “It seems like if you had a single-payer system it would be a lot simpler, and you would probably save money. But it’s a good start.”