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State health battle brewing

Gregoire, McKenna duel as opposing bills head to Legislature

By Kathie Durbin
Published: February 13, 2011, 12:00am

A House bill dropped in the Washington Legislature’s hopper on Feb. 2 would prohibit the state from spending state money to implement “Obamacare.”

A Senate bill introduced the next day would authorize the state to continue work on creating health care exchanges — with a $1 million federal grant — as required by the 2010 federal health reform law.

The debate over Washington’s role in implementing the Patient Protection and Affordable Care Act is playing out in Olympia this session in dueling bills and in a climate of legal uncertainty.

It’s also happening against a high-stakes political backdrop: Democratic Gov. Chris Gregoire and Republican Attorney General Rob McKenna, an all-but-announced candidate for governor in 2012, are on opposite sides of the volatile health reform issue.

McKenna was one of the first state attorneys general to join a lawsuit filed by Florida after President Barack Obama signed health reform into law in March 2010. The lawsuit argues that the bill’s individual mandate, requiring people to buy health insurance or pay a fine, is unconstitutional.

Gregoire was furious that McKenna did not consult with her or with Democratic legislative leaders before joining the multi-state challenge. “I don’t know who he represents,” she fumed at the time. “He doesn’t represent me.”

McKenna argues that the measure unconstitutionally imposes new requirements on Washington and its citizens.

On Jan. 31, U.S. District Court Judge Roger Vinson of Pensacola, Fla., ruled the individual mandate unconstitutional and said that because the law’s parts are inextricably linked, the entire law must be declared void.

So far, two federal district courts have upheld the law and two have struck down all or portions of it. Pressure is building for the U.S. Supreme Court to expedite a review. In the meantime, states, caught in the middle, are in disarray.

State Rep. Joe Schmick, R-Colfax, has introduced House Bill 1804, which would prohibit the use of state funds to implement the law in Washington. Schmick, joined by nine other conservative House Republicans, cited the recent federal court ruling by Judge Vinson.

“With the court’s recent ruling, and with our state facing a $4.6 billion shortfall, it would be irresponsible for us to spend any more state dollars implementing a federal law that may never go into effect,” Schmick said in a statement. “Rather than losing time, effort and money by focusing on a federal law that looks more and more unconstitutional each day, state leaders should be working toward state-level solutions that bring quality, affordable health care to our working families here in this Washington.”

Schmick, the ranking Republican on the House Health Care and Wellness Committee, said the court ruling places Washington in a kind of “health care limbo land.”

State Rep. Eileen Cody, D-Seattle, who chairs the committee, said through a staff member that she will not give Schmick’s bill a hearing. What’s more, her office said, none of the money the Office of the Insurance Commissioner is spending to implement health reform is state money. It’s all being covered by federal grants.

Meanwhile, Sen. Karen Keiser, D-Kent, who chairs the Senate Health and Long-Term Care Committee, held a hearing Feb. 3 on her bill to move ahead with implementing health benefit exchanges, the heart of the legislation. Keiser’s bill, requested by the governor, has bipartisan support.

Keiser said a few people who spoke at the hearing expressed the view that the state should not implement the law.

“Do they prefer to have the federal government do it for the state?” she asked. “Because that is the default if the state doesn’t take on designing the approach. I though it was quite shocking at the hearing that some people in the business community said they would rather have the federal government design the plan. I think it would be a terrible mistake to allow the federal government to usurp that power. We have a much more vibrant health community than other states.”

Washington is considered a “pace car” state, a leader, when it comes to implementing health reform, Keiser said.

Janelle Guthrie, the attorney general’s spokeswoman, said McKenna hasn’t weighed in on any of the legislative bills. “We are focused on the lawsuit itself,” she said.

“At this point, we anticipate the federal government will file a motion announcing its intent to appeal Judge Vinson’s ruling,” McKenna said in a statement. “Twenty-eight state governors have written to President Obama asking him to expedite the appellate process by directing the Department of Justice to file for direct review by the U.S. Supreme Court. I agree that the Supreme Court should rule as quickly as possible on these constitutional issues so we can continue the important work of creating a health care system that provides affordable access to all Americans without violating their rights.”

“Meanwhile,” he said, “whether or not to suspend implementation of the health care law in our state is a question for our legislators and the Governor.”

Gregoire supports moving forward with implementation, said her spokeswoman, Karina Shagren.

“There have been judicial opinions, but the governor is confident that health care reform is going to be found constitutional,” Shagren said.

Though major pieces of the health reform bill don’t kick in until 2014, the clock is ticking for Washington and every other state. “We have two years to get this up and running,” Keiser said. “We have to maintain our momentum.”

The federal law requires states to establish health insurance pools, known as exchanges, by Jan. 1, 2014. These exchanges would pool a range of individual and small-group health insurance policies and allow people who lack health coverage to buy into them. Federal subsidies would make the coverage affordable for low-income enrollees.

States have many policy decisions to make about the structure and focus of the exchanges and must show good progress toward creating them by Jan. 1, 2013. In states that choose not to establish their own exchanges, the federal government will do it for them.

By Jan. 1, 2012, a new seven-member board, working with the Washington Health Care Authority, is supposed to develop a business plan and a timeline for putting the exchange in place.

The shape of Washington’s exchange is still undecided, Keiser said. She said she would prefer a public-private partnership of providers, governed by a board that operates with public transparency and is free of conflicts of interest.

In January, the state received a federal Medicaid waiver that will provide a 50 percent match for the cost of covering low-income people enrolled in its Basic Health Plan. Formerly funded entirely with state money, the program faces deep cuts as a result of the state’s current budget crisis.

Thanks to federal health reform, Keiser said, Basic Health will survive. “When we get to 2014, the federal law allows us to offer a Basic Health Plan and they will reimburse the state 95 percent for every enrollee.”

Kathie Durbin: 360-735-4523 or kathie.durbin@columbian.com.

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