5 Things We’re Watching – Washington, March 2013

After our conferences, we often get requests to send out information about what’s happening in the market and in policy circles.  It’s the driving force behind this email, actually – to keep the conversation started at our conference going throughout the year.

So, put simply, these are 5 topics we think are important to keep our eye on.  You may have others.  And, if you do, we’d love to hear about them.

1. Dueling budgets out in the next few weeks

This week, the Economic and Revenue Forecast Council predicted a budget shortfall of $1.3 billion.  That’s akin to the shortfalls during the recession, though news wasn’t all bad.

This sets the stage for the House and Senate budgets to be released in the next two weeks.  With the Republicans making education funding a priority (“I can’t fund anything else“), and Democrats making a point of closing tax loopholes (and edging closer to calling for new revenue), it could take a while to sort things out.

2. Only three plans on the small group exchange

That’s almost an overstatement, but not much.  We’ll see who submits their full application at the April 1 deadline, but based on the (non-binding) letters of intent in January, it’s a pretty thin market.

CHPW, United and Regence will likely be on, at least in some regions. (Regence submitted four plans but I expect will only have one per region: Regence, Regence of OR, Asuris and Bridgespan.)  Kaiser is also listed for Clark County, but other than that, that’s it.

Notably absent:  Group Health and Premera.



3. An interview with Kevin Quigley, D

SHS Secretary

Following the recent front page Seattle Times story on the new DSHS Secretary, Kevin Quigley, we thought we’d interview him for our readers as well.

Here’s what you’ll read in our two part series:  insight into how Governor Inslee addresses policy challenges, how Sen. Murray and Quigley struck up a unique rapport, and how Quigley is taking a businessman’s approach to reforming DSHS.

4. A new contract arrangement for Medicaid

The state contracts with Medicaid plans expire Dec 31st.  Recent history  suggests that the state will roll those contracts over for a new year.  But, I’m not sure that conclusion is as clear today as it might have been previously.

The state’s announced it’s not saving the money it had hoped – $301 million – from the last RFP.  Gov. Inslee has appointed a reformer to head the HCA, and a veteran to a new post to lead Medicaid.  The state is getting sued over the details of the last RFP implementation.  And, smart intentions to address ‘churn’ between Medicaid and the exchange will require significant changes to the existing contracts.

Sure seems like the case is getting stronger for a fresh start.


5. The homogenization of Medicaid and the exchange markets

The devil is in the details, and these two markets won’t be entirely the same, but you’re seeing this trend of homogenization in a number of innovative approaches to implementing reform.  The Apple Health Plus program is one example here in Washington, but it’s happening in other states as well.

Governor Rick Perry in Texas is looking to a block grant model to support Medicaid beneficiaries purchasing benefits, likely on the federal exchange.  Arkansas Gov. Mike Beebe wants to expand the exchange subsidies to newly eligible Medicaid beneficiaries rather than increase the size of Medicaid itself.  Even Florida and Idaho are looking to fundamentally change Medicaid into a more private market.

This trends seems clearer and clearer as states move through implementation.