The Exchange Set To Propose a 1% Premium Tax Increase

In a meeting that drew opposition from across the health care marketplace last week, the Operations Committee of the Washington State Health Benefit Exchange heard a proposal by staff that included a major increase in the premium tax on all Washington State health insurance plans.The increase – either a 1% increase or a 50% increase, depending on your perspective – would raise the current premium tax of 2% to 3% on all revenue from fully insured products in the State of Washington.

The proposal was to cover a projected annual revenue of $50 million dollars to operate the Exchange.

The proposed budget of $50 million came as a shock to many from all parts of the health care spectrum.

A well regarded consumer advocate from the left said privately that the number was “an embarrassment.”  A key conservative legislator I spoke with a day later said it was “simply ridiculous.”

I’ve not heard anyone yet call the budgeted amount “reasonable.”  Instead, here is what I have heard over the last week as folks have started talking about it.

The Exchange wants $50 million to run a website?

 

They really have no idea how this will impact the marketplace.

 

This is joke, right?  How can they justify that amount – to say nothing of the budget context that proposal is going into?

That said, I’m sure there will be quite a bit of ongoing discussion on both the budget, and the challenge of identifying how to make the operations of the Exchange sustainable.  The Exchange is due to provide a report to the legislature by December, though the administration is putting together the governor’s budget submission now.