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Gov. Gregoire enacts health care reforms

For Immediate Release: May 11, 2011

Gov. Chris Gregoire today signed six bills that will continue to transform health care in Washington state and help fulfill her commitment to improve patient care and reduce health care costs. The governor also discussed Health Innovation for Washington, the most comprehensive state proposal to reform health care made in decades.

“This is health care reform by Washingtonians for Washingtonians,” Gregoire said. “We must continue to step up to this challenge and cut the cost of health care for families, businesses and taxpayers. By improving care and cutting costs, we can forge a path that businesses and other states will follow.”

The Washington way
For six years, Washington state has been pursuing its own plan to reform health care. Most recently, the state submitted a blueprint for Medicaid reform to the federal Center for Medicare and Medicaid Innovation.

This goal of this effort is to reduce costs for taxpayers and improve care for Medicaid users, which requires the federal government to provide the state flexibility, waivers, resources and technical assistance. For example, the state cannot currently use Medicaid funds for smoking cessation, even though it could reduce the prevalence of lung cancer, heart disease and other smoking-related illnesses. The state also wants to use co-pays and cost-sharing to encourage Medicaid clients to use less expensive generic drugs that are as effective as name-brand pharmaceuticals.

With federal approval, the governor plans to:
• Use evidence-based guidelines to purchase the most effective supplies and medications across all public coverage
• Adopt national payment reform strategies, like ending payments for botched surgeries and other preventable medical mistakes
• Pay for positive patient outcomes, rather than tests, services and unproven treatments

Reforming health care the Washington Way goes beyond this proposal and includes legislation to cut health care costs and increase transparency in the insurance market.

The governor signed SSB 5394 today, Senator Keiser’s bill that requires the state to ensure care for employees and Medicaid clients is patient-focused, evidence-based and coordinated.

She also signed ESHB 1311, which was sponsored by Representative Cody. The bill establishes a collaborative to identify misused or overused health care services and then develop and encourage best practices to improve the service’s efficacy.

And she signed ESHB 1220, sponsored at the request of Insurance Commissioner Kreidler by Representative Rolfes, to increase transparency in the state’s individual and small-group insurance markets. Consumers will be able to review the information that insurance companies submit to justify any rate increase and see for themselves how insurance companies spend premiums.

Affordable Care Act
Even as Governor Gregoire is pushing to reform health care within the state, she is also a leading implementation of the federal Affordable Care Act (ACA).

The ACA requires a health insurance exchange to be established in each state, either by the federal government or the state. Exchanges are consumer-friendly marketplaces where individuals and small employers can shop for insurance coverage. Low-income residents will also be able to access subsidized coverage through the exchange. Governor Gregoire requested legislation to create Washington’s exchange and signed SSB 5445 into law today. Washington is now the fourth state in the nation since passage of the ACA to establish an Insurance Exchange. The exchange must be up and running by January 1, 2014.

Gregoire also signed ESSB 5122 and ESSB 5371 today, both sponsored by Senator Keiser. ESSB 5122, passed at the request of the Insurance Commissioner, conforms state law with the ACA by extending insurance coverage to dependents under the age of 26, removing lifetime benefit maximums and preventing insurance companies from denying coverage to people under 19 because of pre-existing conditions. ESSB 5371 provides an insurance open enrollment period for those under the age of 19. Those who miss open enrollment can to join the Washington State Health Insurance Pool until they are able to get other coverage. Washington is one of the first state’s in the nation to implement this provision of the ACA.

State government is one of Washington’s largest health care providers, serving 335,000 public employees, retirees and family members, and 1.2 million low-income children and adults. Due to the size and cost of the state’s health care programs, Governor Gregoire formed a Blue Ribbon Commission on Health care six years ago and outlined a plan to reduce health care spending and increase access. The results have been exceptional.

The state has successfully held the growth of per capita costs in its Medicaid program to 2.6 percent per year – one third below the national average – by increasing use of generic drugs, improving care for patients with recurring or long-lasting illnesses and scrubbing waste from medical supply purchasing. Prescription drug costs alone have decreased by 23 percent – despite increased caseload – and saved the state $100 million a year. Evidence-based reviews have eliminated health care services with no proven health benefit and saved taxpayers $30 million a year.

“My goal is to limit the overall increase in health care costs to 4 percent each year,” Gregoire said. “We have shown this goal is within reach and the cost of health care is not beyond our control. By making better use of our resources and helping families and employers control costs, we are helping taxpayers and businesses save money and helping patients improve their health.”

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