Cantwell Continues Push to Drive down Health Insurance Costs through Basic Health Plan

Former acting CMS administrator applauds Basic Health Plan as tool to reduce costs

Basic Health Plan would provide affordable health care for 162,000 eligible Washingtonians, per nonpartisan study

WASHINGTON, D.C. – At a hearing of the Senate Committee on Finance today, U.S. Senator Maria Cantwell (D-WA) continued her efforts to lower the cost of health insurance through the Basic Health Plan -- a health care option that would provide quality, cost-efficient coverage for 162,000 eligible Washingtonians who do not qualify for Medicaid, but struggle to afford private insurance, according to a joint study by the Kaiser Family Foundation and the Urban Institute.

The Basic Health Plan, an option through the Affordable Care Act, empowers states to use federal funding to negotiate directly with managed care plans. The Plan would significantly lower healthcare premiums and deductibles for low-income working individuals who are ineligible for Medicaid.

“If you buy in bulk, you get a discount. And that applies to negotiated rates for either drugs or for healthcare. We must put those individuals in the marketplace in a position of having the clout that you would want somebody who was with a large employer to get,” said Cantwell. “We’ve seen with the Basic Health Plan in New York that they were able to drive down costs because they bundled up a population and 13 different providers wanted to bid on that.”

Andrew Slavitt, who oversaw the implementation of the Basic Health Plan in Minnesota and New York while serving as acting administrator of the Centers for Medicare and Medicaid Services (CMS) under the Obama Administration, applauded the Cantwell-authored program.

“I live in a state, Minnesota, that’s taken advantage of [the Basic Health Plan] and it’s worked very well,” said Slavitt.

Starting in 2015, both New York and Minnesota have implemented the Basic Health Plan, leading to large decreases in health insurance costs. According to the Kaiser Family Foundation and the Urban Institute study, premiums and deductibles were far lower for people in New York and Minnesota on the respective Basic Health Plan than for people in other states with subsidized exchange plans. New York state health officials have estimated cost savings of more than $1 billion while Minnesota has had savings of more than $100 million during the first budget biennium under the program.

In addition, the Kaiser Family Foundation and Urban Institute study found that health insurance enrollment in New York increased by 42 percent after it switched from the Exchange to its Basic Health Plan (known as the Essential Plan) for individuals between 138 and 200 percent of the federal poverty level. The study also found that the Basic Health Plan did not appear to destabilize the Exchange or the individual insurance market in either state.

Key Data on the Basic Health Plan in New York and Minnesota

The Basic Health Plan provision in the Affordable Care Act is modeled on Washington state’s highly successful Basic Health Plan, a state-funded health insurance program that became the first of its kind in the nation when late Governor Booth Gardner signed it into law in 1987. The Basic Health Plan grew from a pilot program serving residents of King and Spokane Counties into a statewide program serving tens of thousands of residents. The plan was suspended in 2014 due to budget constraints.

In May of 2016, Senator Cantwell and then-Rep. Jim McDermott sent a letter to Governor Jay Inslee, Majority Leader Mark Schoesler, Democratic Leader Sharon Nelson, Speaker Frank Chopp, and Minority Leader Dan Kristiansen, urging them to make the Basic Health Plan available to Washingtonians.

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