A Princeton University School of Public and International Affairs lecturer informed stakeholders of possible avenues for funding a universal health care system in Washington Thursday.
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Dan Meuse–Deputy Director of State Health and Value Strategies of the Robert Wood Johnson Foundation–spoke during the Washington Universal Health Care Commission’s meeting. The commission was created after Senate Bill 5399 passed during the 2021 legislative session, to establish a universal health care system for all residents. Meuse outlined the three post-Affordable Care Act options available to a person seeking health care coverage which include: public programs, self-coverage purchased through the marketplace, and employer-based coverage.
Meuse said Medicare is likely the largest hurdle for establishing a state-run health system. Medicare covers approximately 1.29 million Washingtonians. Funding decisions are made under federal control, including those made for hospital rates, physician rates, drug costs, covered services, and purchasing structures, he said.
“Medicare is portable and functions basically the same across the country,” Meuse said. “I live in Rhode Island. I have grandparents that moved to a warmer climate and took their Medicare with them. Every hospital in the country takes Medicare. It’s the biggest single revenue line for most hospitals.”
Two states–Maryland and Pennsylvania–have some control over Medicare payments through waivers, however, Meuse said. A statewide waiver allows Maryland to set rates for Medicare payments in an Affordable Care Act context. It’s important for Washington stakeholders to keep these types of waivers in mind when considering funding options for a universal health care system, he said.
“Maryland has a commission that says ‘This is what hospitals are going to get paid in our system,’” Meuse said. “There are rates set by a commission. They created an opt-in waiver to allow hospitals to transition away from fee-for-service. So hospitals don’t have to worry about how many MRIs [they’re] doing. It’s important to know those waivers are out there to have some control over Medicare. If Washington can find savings in Medicare, it could fund coverage. Depending on how a waiver is structured, Medicare is a place to find savings. There is an opportunity to dig in. These waivers represent a point of flexibility that states have taken advantage of, and Washington could take advantage of.”
Meuse said finding funding in the employer market is unlikely without some form of legislative change. The employer market is the biggest coverage option in the state, representing 4.38 million people, which is more than 58 percent of the population, he said. But the Employee Retirement Income Security Act (ERISA) presents challenges with finding funding in the employer market. ERISA protects the interests of employee benefit plan participants and their beneficiaries. It works under federal guidelines, as opposed to state rules.
“Here’s the kicker with the employer market; it’s protected by ERISA,” Meuse said. “States can’t mess with it. Multi-state employers seek national coverage. A big company will seek to have their insurance be self-insured, so their employees in all 50 states have the same coverage.”
ERISA is a federal law that preempts state law claims.
In transitioning to a unified funding model for health coverage, federal entitlements like Medicaid and Medicare would have to be considered. Any state funding model would need to maintain those entitlements, Meuse said.
“There is no single payment structure that can be used for all services,” he said. “Managing a budget will likely require payment model innovations that require provider system participation. It will require global budgeting on hospitals, and state-operated benefit managers. What does the federal government allow you to do? The real question is how do the flexibilities work with each other? The model of flexibility looks different to federal officials than to state officials.”