Health proposals in Gov. Inslee’s 2021-23 budget plan

Gov. Jay Inslee announced his 2021-2023 budget proposals on Thursday, proposing new taxes to pay for COVID-19 related efforts and economic relief. The $57.6 billion operating budget prioritizes investments in addressing homelessness, behavioral health reform, and supporting public health systems.

To fund these various investments, the governor’s budget relies on dipping into reserves, reinvesting unused education funds, and as some expected, the introduction of a new capital gains tax. The tax would go into effect the second year of the 2021-23 biennium, and is projected to bring over $3.5 billion over the next 4 years.


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Here are the budgets’ health-related items that lawmakers will evaluate as they get to work in the 2021 legislative session:


Public Health & the COVID-19 response:

Inslee is proposing $397 million for the biennium to support Washington’s response to COVID-19. The funding would be used for personal protective equipment, contact tracing, lab costs, and epidemiology work. The budget states that the Department of Health will need additional resources for vaccine distribution and administration.

“As the state prepares for a vaccine and moves through the worst of the COVID-19 pandemic, there are still major issues to address in our chronically underfunded public health system,” reads the budget.

To address this chronic underfunding, Inslee is proposing a new per member/per month assessment on health insurance carriers. The budget estimates the new tax will raise $205 million during the second year of the next biennium, then $343 million in 2023-25.


Department of Social and Health Services (DSHS):

Within DSHS, the budget includes investments in behavioral health, aging and long-term care, and economic services administration. Notable spending proposals include:

  • $27.4 million general fund-state (GF-S) to fund operating costs for two new forensic competency restoration wards at Western State Hospital, and $3.7 million for direct care staff at the hospital
  • $3.4 million GF-S to operate two new forensic competency restoration wards at Eastern State Hospital
  • $11.5 million GF-S to increase the cost base to nursing facility Medicaid rates
  • $22.9 million GF-S to operate and maintain the Transitional Care Center of Seattle
  • $10 million GF-S to fund the Washington Immigrant Relief Fund, $9 million to fund the Disaster Cash Assistance Program, and $6.7 million to fund maximum food benefit payments for those who qualify for the Food Assistance Program during certain months in FY2021


Health Care Authority (HCA):

Among several funding allocations to the Health Care Authority, the budget makes significant investments in behavioral health. Investments include $7.4 million in state funds to increase behavioral health service rates for Medicaid clients, $7.8 million to expand youth mobile crisis teams statewide, $2 million for co-responder grants, $13.5 million to implement plans to increase inpatient treatment capacity in community behavioral health settings, and $15.7 million to increase rates for tribal substance use disorder resident treatment facilities.



The budget proposal also puts an emphasis on addressing homelessness in the state, which it estimates grew by 13% in 2020. Over 85,000 households, as of November, reported they were likely to experience evictions or foreclosure in the next few months, reads the report, and when the eviction moratorium is eventually lifted, there could be mass evictions of low-income households.

The state has already used $120 million in federal relief funds for rent assistance, reads the report. With CARES Act funding running out, Inslee is proposing $164 million in state funds for rental assistance through June 30, 2021 and an additional $164 million to extend the assistance into the next biennium.

The proposal also includes continued funding for the Anchor Community Initiative – which works to reduce youth and young adult homelessness – and an additional investment to expand the program into four new anchor communities.


Capital Budget:

Inslee’s capital budget proposal also includes several health-related investments including $51 million for design and demolition work for a new 350-bed forensic psychiatric hospital, almost $120 million for a new 120-bed nursing facility, and nearly $400 million toward building and preserving affordable housing.


The legislature will consider the budget proposals when it convenes for a 105-day session on January 11.