Washington state experimented with guaranteeing health insurance coverage while removing mandates. It didn't end well, yet here we are again.
If you need a history lesson, the Seattle Times ran a terrific article reminding Washingtonians of our State’s illustrious experiment with healthcare reform. Spoiler alert. It didn’t end well. Ah but yes, it started out so promising. Healthcare mandated for all citizens, no pre-existing condition waiting periods, no health underwriting, set standards for benefits offered, and Medicaid expansion. Wait. What? Yes…..I am talking about Washington State, 15 years ago.
Cue Bill Murray and his blasted alarm clock…“I Got You Babe.”
Back in the 90’s we were truly cutting edge. If you were not in the ‘biz back then, here’s a quick rundown: The Democratic-majority legislature essentially implemented a state-wide version of Obamacare. Two years later, after a resounding victory at the polls, the Republican-held legislature pulled the mandate. But they left all the stuff people liked. Starting to sound familiar? Our individual medical market went from 19 carriers in the early 90’s to only 2 in 1998. By 1999, there were none actively selling in the state.
Lost your job and your employer was too small to offer COBRA? Out of luck. Moved to the state and needed coverage while looking for a job? Not so much. Even if you were healthy, you couldn’t get coverage – because the “good stuff” was still required. If the carriers could not ask you health questions, they had no idea if you were a good risk or not. Those were the days, my friends. People scared to lose their jobs for fear of losing coverage. Becoming too sick to work, and subsequently losing their healthcare, just when they needed it most. Those phone conversations were not pleasant. At all.
So what tanked the marketplace? Repealing the individual mandate while keeping the guarantee issue. Without a financial incentive for healthy people to maintain coverage, they dropped their coverage. And without those premiums to stabilize the pool, it just didn’t pencil out for the insurance companies. After losing hundreds of millions of dollars, the last two bailed.
“Those that fail to learn from history, are doomed to repeat it.”
Now, almost two decades later, the other Washington is poised to make changes to the ACA, with talk of removing the mandate or ridding of the individual penalties (which will have the same effect). All while keeping the “stuff we like”. We’ll be having some déjà vu over here in the “real” Washington.
My fear is that our insurance carriers have been around this block before. They know what’s around this particular corner. And, they won’t wait years to pull out of the market this time. Don’t think that a carrier’s submitting 2018 individual plans/rates to the Office of the Insurance Commissioner by this April’s deadline will guarantee anything. They can file, but they can also rescind. Let’s just hope for a little bit of certainty from the Feds. Hmmm, guess that kind of thinking makes me Alice after all.
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I love numbers. I'm a math geek. I read benefits industry articles and periodicals for relaxation (but, honestly, I'm still a fun gal). I also like to share what I've learned and you'll find it all here.