HEALTH CARE CRISIS
(also see Prescription Drug Costs)

BACKGROUND -- Our employer-based health insurance system is broken and the problem has reached a crisis stage. Jobs that used to provide affordable coverage are being replaced by jobs that either pay no benefits or shift a growing amount of the cost to workers.

More and more Washington families have been pushed into the ranks of the uninsured or underinsured. The crisis of uncompensated care is costing the state and the purchasers of health insurance in the form of increased premiums and co-pays. Nearly three times as many families file for bankruptcy due to medical emergencies than did a decade ago. Every year, our health care infrastructure is absorbing more than $550 million in costs as a result of uncompensated care, according to a 2006 report from the Office of the Insurance Commissioner.

Large businesses that don't provide affordable employee health coverage have an unfair competitive advantage over their competitors that do offer employee health care coverage. Many uninsured workers at these large employers show up on the roles of the taxpayer subsidized Basic Health Plan or their dependents end up qualifying for Medicaid. In effect, taxpayers are subsidizing these larger businesses who fail to provide adequate health care coverage.

As Gov. Chris Gregoire noted in her 2007 State of the State address, "Good family-wage jobs are those that pay well and provide affordable health insurance. For many people in Washington, they fear they are a diagnosis away from bankruptcy. I know that many of the solutions to the health care crisis facing our nation must involve the federal government. But we have to step forward and find innovative solutions for Washingtonians."

LABOR’S POSITION -- The Washington State Labor Council supports the legislative agenda of the Fair Share Health Care coalition, a group of labor, business, health-provider and religious interests working together to expand access to health care coverage in our state. Its 2007 agenda includes funding for the Small Employer Health Insurance Partnership program established last year (see Legislative History below) expanding available slots in the Basic Health Program, continuing efforts to cover uninsured children, and legislation that gives large businesses a choice: either pay a reasonable percentage of their payroll toward health coverage for their employees, or pay a fee to the state to assist in providing more coverage for uninsured adults. The Coalition also supports requiring large employers whose employees are on taxpayer-subsidized health programs to pay the state for that coverage unless they meet a similar minimum standard for providing employee health care.

Large employers should not be allowed to abandon their employees and pass on enormous costs to the entire health care system. It's not fair to employers that do the right thing and must compete with them, and it's not fair to Washington taxpayers. Investing in employee health should be a requirement of doing business in Washington, whether that coverage is provided through the employer or the state.

2004 -- HB 2785 and SB 6551 would require large employers to either provide affordable health care or pay a fee to the state so their workers can utilize the state Basic Health Plan. Neither passed.

2005 -- SB 5637 and HB 1702, the Health Care Responsibility Act, would have employers of 50 or more workers to purchase 80% of the cost of basic coverage or pay a fee to help expand public insurance programs for the uninsured. Neither passed. 
-- HB 1486, the Health Care Disclosure bill, would have required state agencies to report on the employment status of enrollees in state-subsidized plans. It passed both houses, but was vetoed by Gov. Gregoire, who cited the ERISA implications of releasing employer data to the public.

2006 -- HB 2517 and SB 6356, the Fair Share Health Care bill, would have required employers of 5,000 or more to spend at least 9% of their payroll costs on health care or pay a fee to the state making up the difference, which would be used to provide coverage for uninsured workers. Neither passed. 
-- HB 3079, the Health Care Disclosure Act, requires the state to report on the employment status of enrollees in state-subsidized health plans. This new version addressed the concerns of Gov. Gregoire, who vetoed the 2006 version. It passed, and was signed into law. 
-- HB 2572, the Small Employer Health Partnership, offers premium assistance to small businesses' employees under 200% of the federal poverty level. It passed, and was signed into law.

Return to the WSLC Legislative Issues Index

Copyright © 2007 — Washington State Labor Council, AFL-CIO