Bill calls on Washington Exchange to reduce costs

OLYMPIA — On Monday the legislature passed a rewritten version of SB 6089, a bill aimed at reforming the Washington Health Benefit Exchange. This bill instructs the Exchange to provide the legislature with annual reports and quarterly reports that detail its current cost of operations while providing a plan to reduce overall costs.

Specifically, the bill requires the Exchange to submit the following reports:

  • Five-year plan: By January 1, 2016, the Exchange must submit a five-year spending plan that identifies reductions in the Exchange per member, per month (pmpm) spending based on the levels allocated in the 2015-17 budget. Specifically, the Exchange must look at reductions in call center, information technology and staffing costs.
  • Spending metric: The Exchange must establish a metric that captures current spending levels on a pmpm basis. This metric must then be used to establish five-year benchmarks for spending reductions. Progress towards these benchmarks must be published online and reported to the legislature quarterly.
  • Annual operating cost report: The Exchange must provide the legislature with data detailing the annual cost of operating the Exchange by dividing the funds allocated to the Exchange in the 2015-17 budget by the number of QHP and Medicaid enrollees.
  • Strategic plan: The Exchange must publish an annually updated strategic plan in order to establish priorities to improve services and operations. Strategic plans must be published by September 30th of each year.

Monday’s final budget agreement included a a funding level for the Exchange that will likely double the current $4.19 per member per month carrier assessment. This legislation would appear to put the Exchange in a position to prove that it requires this level of funding and identify ways to reduce its spending.

The bill also reverses a decision made by the Exchange earlier this year to shift the verification of enrollee eligibility for a special enrollment period to insurance issuers. The bill explicitly makes this the responsibility of the Exchange.

SB 6089 passed both chambers with significant majorities. The original bill would have put significant restrictions on the Washington Exchange’s funding. It met stiff resistance from Democrats and health insurance companies and did not advance in the House.