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May Finance Technical Advisory Committee meeting: it was not all flowers 

By Consuelo Echeverria 

The take-home for this meeting is keep the public comments coming to ensure that we support the members as well as make single payer a reality in Washington State. 

1. Timeline

Currently ERISA is on the agenda for the next five months. Employer-sponsored benefits are largely governed by federal law through the Employee Retirement Security Act of 1974 (ERISA). ERISA supplies some rules that private employer-sponsored plans must follow. Most notably, ERISA preempts state regulation that “relates to” private employer-sponsored benefits. 

However a solution has already been suggested in The Oregon Task Force on Universal Health Care’s Final Report and Executive Summary – September 2022  which suggests employers’ payroll tax be keyed to percentage of wages paid and not to the employer’s benefits expenditures to avoid an ERISA preemption. (McCuskey & Brown, Appendix A) Considering the strategies outlined by McCuskey and Brown, it should not take almost a half a year to discuss. To learn more read ERISA and State Single-Payer Healthcare: A Primer.

Action Item: Public comments should emphasize that the next five months would be better spent focusing on adapting a single payer model like the Washington Health Security Trust along with implementing Roger Gantz’s suggestions that Washington showcase the state’s capacity to implement a universal health care system by purchasing PEBB and SEBB benefits together.

2. Medicare Waivers:

The meat of the meeting was a discussion of the various options for incorporating Medicare into the universal health care plan. 

Why option Number One is the best:

Despite the subjective slant of the Rand presentation surrounding the feasibility of a comprehensive waiver and act of Congress, as the 2023 California report states it is the "North Star" that should guide all our efforts. If the goal is state based universal health care, then Option 1 is the most feasible option to incorporate Medicare.

There were members of the commission who agreed. 

Roger Gantz stated that “The language and reports suggest not a clear pathway but a key component of the 1115a demonstration waiver is budget neutrality. I see that embedded in the waiver that Maryland has.  Essentially, at the end of the day, you must demonstrate that it creates no greater cost.”

David Digiuseppe:  “--- the September report on Model A  [State-governed and state-administered program for all state residents.] and the Commission's primary objective with Medicare is to create a vehicle to lower commercial fee schedules and extract savings system wide. The table in the November report shows  $2.4 billion in savings on the commercial side with relatively  flat expenses on the Medicare side. When I think about that primary objective, Option Number 1 is really the only effective method of the six options to achieve that objective of the commission.”     

Action Item: Advocate to establish communication with the Dept. of Health and Human Services to guide the iterative process of preparing the groundwork in Washington State. Comments may include potentially partnering with Oregon and California to increase leverage at CMS and achieve the cost-sharing reduction objectives.     

 3.  Population-Based Payment model

A population-based Payment model is an iteration of a capitated model with egregious problems, and should not be the model adopted by our Universal Health Care Commission.

Capitation incentivizes providers to treat those that are healthy and drop those that are sick as the provider saves money when fewer services are delivered. And we know that those who are the sickest are often the oldest, poorest and from BIPOC and/or rural communities.

Capitation penalizes providers who care for those patients as payments may not be adjusted for patients with complex medical needs or those who face non-medical barriers to care as many rural patients do.

Capitation incentivizes investors and other financial intermediaries because private entities can profit from fixed capitation payments through cherry-picking and lemon-dropping of patients. 

Action Item: Keep advocating in public comments for a single payer model such as the Washington Health Security Trust (WHST).

To read or watch the May FTAC meeting  

Next Meeting is the Universal Health Care Commission 

Tuesday, June 13, 2023   2–4 p.m. 

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