by Consuelo Echeverria
The Finance Technical Advisory Committee is recommending an actuarial analysis; however, the Milliman actuaries seem unsure of which data to use and need help defining what they are measuring, which comes as no surprise as there is no overarching vision or plan to guide them.
So they will be modeling Medicaid, PEBB/SEBB and Cascade Silver scenarios with various cost sharing options. But in reality they are modeling the 3 iterations of the same model of health care: that delivered by private insurance. Furthermore, we all know that the private model comes with substantial administrative costs that will be excluded from their analysis!
This is a real oversight as it is well documented in previous actuarial reports that removing the administrative burden of prior approvals, coding, complicated billing systems, variable contractual agreements, and non-standard authorization processes can save the state $2.56 billion dollars in the first year. (Oregon CBIZ Optumas Universal Health Care Financing Modeling Report and WA Universal Health Care Work Group (p.) 10)
Furthermore, the literature has shown time and time again that cost sharing indeed saves money because poor folks who are often the sickest do not have the money to pay the copays on doctor visits or medications, so they just don’t go to the doctor! Milliman themselves said that cost sharing will reduce utilization. See my previous article documenting the literature that cost sharing harms the most vulnerable and the fallacy of moral hazard and ‘skin in the game”!
Finally, without comparing a single payer model to a private insurance model this exercise is of limited use. They will not find the savings that a single payer model may give because they are excluding the very model that will give the most savings not to mention the most equitable access.
The WA Universal Health Care Work Group (WA UHC) outlined three health care delivery models that would provide a more meaningful and accurate actuarial analysis.
- Model A, a single coverage plan is offered to everyone in Washington State, with the state establishing the delivery system rules and administering the coverage. It includes residents who previously had other sources of public or private (individual or group) coverage. (WA UHC Work Group, p. 16)
- Model B establishes a single, state-designed coverage plan available to everyone in Washington. The state also develops the delivery system rules. Unlike in Model A, Model B insurance companies contract with the state to offer plans to Washington residents. As they do today, insurers will develop and maintain provider networks and administrators, for modest projected savings over today’s system.(WA UHC Work Group, p. 25)
- Model C is designed to provide coverage to Washingtonians who are now uninsured. As in Models A and B, the state sets the program and delivery system rules, but insurers that meet participation requirements provide coverage to eligible individuals. (WA UHC Work Group, p. 29) This model is projected to actually increase costs due to the substantial administrative burden caused by multiple carriers and plans.
The actuarial analysis needs to be a real comparison of a single payer universal health care system (Model A) with what we have now. Or the FTAC could just commission an update of the previous work that can be found in the WA UHC Work Group report.
Our vision is a single payer state-run program that delivers health care for all: Everybody In - Nobody Out.