Print this page- Begun as a pilot project
- Created in 1987 to provide access to health insurance for low-income Washington residents
- A state-sponsored introduction to health care and health insurance
- Everyone participates financially; an insurance program, not an entitlement
- Partnership with private sector, using market-based, not regulatory approach
Chronology
2007
Savings result in better benefits
Basic Health contracted rates were lower than anticipated for 2007. A portion of the resulting savings were used to pay for enhanced benefits that are expected to reduce overall costs to the health plans over time, while still keeping the trend for BH lower than projected. Benefits changes are described below.
- Oxygen is covered with no copay or coinsurance.
- Durable medical equipment and supplies (things such as C-PAP machines, ostomy supplies, and crutches) are covered as follows:
- $25 copay for outpatient supplies (those used in the home for medical treatment).
- $500 maximum benefit per member per year for outpatient supplies.
- Inpatient durable medical equipment (used while in the hospital or medical facility) continues to be covered in full.
- Inpatient and outpatient physical therapy, occupational therapy, and chiropractic care are covered, up to a combined maximum of 12 visits per year. (Of the 12 visits, no more than six can be for chiropractic care.) These visits qualify for coverage only when used as post-operative treatment for reconstructive joint surgery – such as hip or knee replacement – when received within one year following surgery.
- Coverage for sleep studies is limited to one per member per year.
2006
Iraq/Afghanistan Veterans priority enrollment
Effective June 7, 2006, WAC 182-25-030(6) was amended to grant enrollment priority status in Basic Health to members of the Washington National Guard and Reserves who served in Operation Enduring Freedom, Operation Iraqi Freedom, or Operation Noble Eagle, and their spouses and dependents. This means these people don’t have to wait for space to become available in Basic Health.
Income and IRS documentation
Effective July 1, 2006, WAC 182-25-010(17) is amended to change the way Basic Health calculates income, going forward:
- Self-employed people may be able to deduct expenses for “business use of the home” if they can prove more than half of their home is used for business most of the year, or if they have a separate building on their residential property that is used only for business.
- Basic Health no longer counts long-term capital gains as income. We continue to count short-term capital gains.
- Crime victims’ compensation is no longer counted as income.
- Labor and Industries (L&I) one-time payments are not counted as income.
- One-time gambling or lottery winnings are not counted as income if they are received more than one month before applying for Basic Health. They are counted if received within 30 days of applying for coverage or after application.
HCTC final report to Legislature
In May, the Health Care Authority submitted its final report on the Health Coverage Tax Credit program to the Legislature. The report evaluates the impact of HCTC on Basic Health.
Basic Health given 6,500 additional slots
The Legislature gave Basic Health 6,500 additional “slots” during session. This brought program capacity to 106,500, with the expectation that enrollment would increase over the remainder of the biennium.
Employment information
Beginning in July, and in response to the Legislature, Basic Health began requesting employment-related information from applicants and members, including the name and address of the employer, the hire date, and how many hours are worked each week. The answers to these questions do not affect coverage. It will be reported annually to the Legislature.
JLARC study
The Washington State Legislature required the Joint Legislative Audit and Review Committee (JLARC) to do a study of Basic Health. As part of that study, JLARC developed a survey to determine how members use Basic Health services and benefits, and how Basic Health can best meet their needs. The results are reported here.
2005
Health Coverage Tax Credit
Basic Health became a qualified health plan for purposes of the Health Coverage Tax Credit (HCTC) – a federal tax credit that pays 65 percent of the health plan premium for eligible people enrolled in qualified health plans, either as an advance tax credit or as a credit at the end of the year.
Regence BlueShield no longer available
Regence BlueShield is not a Basic Health contracted plan for 2005. Members enrolled in Regence at the end of 2004 chose – or were assigned to – another health plan. Members enrolled in Basic Health Plus and the Maternity Benefits Program were allowed to remain in Regence for 2005 coverage.
No new employer groups
Basic Health stopped taking applications for new employer groups in July 2005. The program continues to take applications for new employees in existing groups.
International students
Effective July 24, 2005, full-time students studying in the U.S. on a temporary visa are not eligible for Basic Health coverage, under Chapter 188, Laws of 2005.
2004
The 2003 Legislature passed significant changes to the Basic Health program for implementation January 1, 2004.
Initiative 773 was modified, directing that new revenues may still only be used for basic health enrollment. However, the requirement was deleted that 125,000 enrollments must first be funded from other state sources. The program was also directed to reduce the actuarial value of the benefit package by approximately 18%. This was primarily achieved through changes in member cost sharing.
Most notable changes to the benefit package include:
- A $150 per person deductible
- 20% coinsurance requirement for certain services.
- A $1,500 (per person) out of pocket maximum. Copayments for office visits and prescription drugs do not count toward the maximum.
- An office copayment increase from $10 to $15
- The pharmacy benefit changed from three to two tiers. Copayments: $10 for tier 1 (generic, within the plans formulary) and 50% of the cost of the drug for Tier 2 (brand name within the plans formulary).
Seven of the eight plans contracted for 2003 Basic Health coverage agreed to contract for 2004. For the second consecutive year, there were no bidders for a nonsubsidized (full cost) product. A Basic Health study will be conducted to determine the impacts of cost-sharing changes on Basic Health enrollees and providers.
Premera members moved to Molina
Effective June 1, 2004, Molina Healthcare of Washington, Inc., purchased the Basic Health membership from Premera Blue Cross. All Basic Health members enrolled with Premera were moved to Molina.
Members surveyed about cost-sharing
In November 2004, Basic Health members were surveyed on the impact of the cost-sharing changes implemented at the beginning of the year. It revealed that about 90 percent of the people enrolled in December 2003 stayed in the program, and that the average health status of those who remained in Basic Health did not deteriorate.
2003
All remaining contracted plans agree to continue to offer subsidized Basic Health coverage. One new plan is added for 2003, serving in Spokane County as a benchmark (low cost) plan. A total of eight health plans will be participating in Basic Health for contract year 2003.
Nonsubsidized coverage is not available for new or continuous members in 2003.
No copayment increases or benefit changes for contract year 2003.
Basic Health moves from coverage criteria to Stanford model on medical necessity.
Enrollment phase in related to Initiative 773 funding appropriation to begin January 1 to add 20,000 new enrollees by June 2003.
2002
All 2001 contracted health plans agree to continue to offer subsidized Basic Health. 15 counties have only one plan available. No plan will allow new enrollment into nonsubsidized coverage. Two plans participating in 2002 will retain their 2001 nonsubsidized enrollees. One of these two plans will allow their subsidized enrollees who experience income changes the opportunity to purchase nonsubsidized coverage.
Copayments for prescription drugs will increase from 2001 levels:
- Tier 1 Drugs Subsidized enrollees from $1 to $3
- Tier 1 Drugs Nonsubsidized enrollees from $3 to $10
- Tier 2 Drugs Subsidized enrollees from $5 to $7
- Tier 2 Drugs Nonsubsidized enrollees from $15 to $20
Office visit copay increases for nonsubsidized nnrollees
Full-premium copayments for office calls increase from $10 to $15 for a child, from $18 to $25 for an adult.
Benefit changes
Basic Health will cover up to six chiropractic and/ or physical therapy visits per year for post-operative treatment following reconstructive joint surgery, as long as they are within one year of the surgery. A $10 copayment will be required per visit.
Up to 3 months credit will be given towards the 9 month PEC for eligible applicants whose enrollment is delayed due to enrollment limits. The credit begins the coverage month the applicant would have been able to enroll if space were available.
Initiative 773 passed (allows for revenues collected from increased tobacco tax to fund additional Basic Health enrollment slots).
2002 supplemental budget appropriated Initiative 773 funds to pay for enrollment of 27,025 individuals formerly eligible for medical coverage through Medical Assistance Administration (MAA) that are no longer eligible based solely on their immigration status. This transition was targeted to occur between July and September 2002 with coverage through MAA terminating October 1, 2002. Additional enrollment phase in of 20,000 members beginning January 1, 2003 to June 2003 was approved. Enrollment in subsidized BH could climb to over 172,000 members.
The 2002 supplemental budget included separation of enrollment categories to distinguish BH base population of 123,550 regular subsidized enrollees with the remaining 1,450 Home Care Worker enrollee's (funded by Department of Social and Health Services). To achieve access to Initiative 773 funding a subsidized enrollment base of 125,000 must be maintained.
One Basic Health contracted health plan merges with another plan effective July 1, 2002.
2001
All health plans agree to continue to offer subsidized Basic Health. Four counties have 4 or more health plans available for subsidized enrollment; 12 counties have only one plan available. One plan agrees to continue to offer nonsubsidized coverage in 5 counties; 3 plans agree to continue to provide nonsubsidized coverage for current nonsubsidized enrollees (one will also provide nonsubsidized coverage for their subsidized enrollees who lose eligibility for subsidy). Transition coverage ends.
Basic Health changes waiting period for pre-existing conditions from 3 months to 9 months Basic Health reached enrollment capacity (funding limitations) in February 2001, resulting in enrollment delays of 90-120 days.
Voter approval of Initiative 773 in November 2001. No impact till 2002 enrollment.
2000
Because of rising costs associated with nonsubsidized BH, health plans are reluctant to bid to provide BH coverage if required to provide both subsidized and nonsubsidized coverage. To protect the subsidized program, during procurement for 2000 coverage, health plans who bid to provide subsidized BH coverage no longer required to bid for nonsubsidized BH.
Most health plans do not bid to continue to offer nonsubsidized Basic Health. Only one plan in one county will continue to offer nonsubsidized coverage to new enrollees; 5 plans agree to continue nonsubsidized coverage for their current enrollees only. Three counties have no nonsubsidized coverage and enrollees are disenrolled.
Basic Health implements transition coverage for enrollees who lose eligibility for premium subsidy, to continue coverage with the enrollee's current plan through December 2000.
39 counties continue participation in subsidized Basic Health, but some service areas are reduced. 3 counties have 4 or more plans available; 6 have only one.
HCA and DSHS MAA continue meeting with stakeholders and advisory groups to solicit input to develop workable solutions to increase heath plan participation, increase provider network stability, and lower or maintain health plan costs.
Premium subsidy reverts back to 1997 percentages, which increases minimum premiums for enrollees with incomes between 65 and 125 percent FPL. D
SHS implements the CHIP program January 2000.
Legislature approves additional $1 million, intended to increase enrollment to 133,000 subsidized enrollees. Subsidized enrollment peaks at 131,580 in December 2000; Basic Health Plus enrollment remains at approximately 80,000 through most of the year. Nonsubsidized enrollment again drops to under 3,000 in January 2000, and continues to decrease. Approximately 2,500 enrollees are covered under transition coverage by mid-year.
Legislature passes changes to individual insurance laws, allowing for health screening of applicants, 9-month waiting period for pre-existing conditions and changes to portability law.
1999
Rates increase over the 1998 rates by 9.1 percent for subsidized BH and 61 percent for nonsubsidized.
Some plans discontinue participation and service areas become more unstable, leaving 10 plans offering BH for 1999, reduced to 9 in October 1999 when KPS Health Plans withdrew (versus 14 in 1998). Member choice is reduced, as only 9 counties offer 4 or more plans (versus 28 in 1998); 3 counties have only one plan available (versus 1 county in 1998).
Legislature provides funding for enrollment to reach 133,000 subsidized enrollees by January 2000. Subsidized enrollment increases to approximately 133,000 in May 1999, BH Plus enrollment remains at approximately 80,000. Nonsubsidized enrollment drops dramatically January 1999, from approximately 13,600 to 8,400 and to just under 6,000 by the end of the year.
HCA begins meeting regularly with DSHS Medical Assistance Administration, health plans, provider groups, and representatives of labor, hospitals, and medical groups, to start re-evaluating its approach to purchasing health care coverage.
Basic Health increases the number of enrollees recertified each month and begins recoupment efforts, billing enrollees for subsidy overpayments caused by the enrollee's failure to correctly report income.
HCA requests legislation to allow the agency to pursue alternative contracting measures, but it is not approved by the Legislature.
Legislature approves CHIP program through DSHS.
1998
Changes to the subsidy scale and member copays are implemented in accordance with 1997 legislative budget assumptions, resulting in members paying a greater portion of the costs of the program. "Managed competition" is expanded to premiums for subsidized members below 125% of Federal Poverty Level. The average monthly premium paid by subsidized members doubles for 1998. The 106% linkage of subsidized and nonsubsidized rates is eliminated. January enrollment in Basic Health drops dramatically, particularly in the nonsubsidized program.
Legislature provides subsidized Basic Health with $11 million for the remaining 97-99 biennium to meet the enrollment goal of 137,200 members established in 1997 (8,000 new members from HCA's projected average biennium enrollment of 129,200).
Legislature provides $330,000 for income recertification efforts in subsidized Basic Health.
Effective July 1, the minimum financial sponsor contribution for subsidized Basic Health members is reduced to $15/$20.
In May, Basic Health eliminates the reservation list for the subsidized program (applies both to individuals and to employer groups).
SSI managed care program ends.
Estimated 11 percent of Washington State residents are uninsured.
High risk pool enrollment is less than 800 members.
1997
Legislature provides funding to achieve enrollment of 137,200 subsidized members in Basic Health (adding 8,000 new members to the subsidized program). However, health plan premium increases and other unrealized assumptions only allow HCA to add 2,400 new members.
"Model plans" that must be offered by carriers in the individual market are "delinked" from changes in Basic Health benefits.
Legislation on the high risk pool prevents denial of eligibility because of the availability of Basic Health coverage; but the High Risk Pool Board determines that the model plans are considered "comparable."
The HCA implements a legislative budget proviso requiring financial sponsors who are paid to deliver Basic Health services to contribute a minimum of $30 per sponsored member per month.
The HCA implements 1997 legislation authorizing BHP to limit eligibility for persons in institutions.
Legislature does not fund commissions for agents and brokers selling Basic Health.
In June, Basic Health implements an employer group reservation list for employers with subsidized members.
SSI managed care begins in Spokane.
Health plans incur underwriting losses.
The HCA and MAA conduct joint procurement for Basic Health, Healthy Options, and PEBB.
1996
Based on 1995 legislative budget assumptions, HCA implements a new premium scale for Basic Health members, making the plan more affordable. "Managed competition" is implemented in premiums charged to subsidized members over 125% of Federal Poverty Level. Improvements in the application process are implemented to reduce the period of time required to enroll applicants.
HCA implements 1995 legislation expanding Basic Health benefits to include mental health, chemical dependency and organ transplants; provide subsidized coverage at reduced premiums for home care workers and personal care workers funded by DSHS; and pay commissions to agents and brokers.
The Legislature funds reduced Basic Health premiums for foster parents. Coverage begins in 1996.
Demand for individual subsidized Basic Health coverage exceeds budgetary limitations. In September, Basic Health creates a reservation list for individuals wanting reduced-premium coverage. Marketing and outreach are curtailed.
Basic Health employer group enrollment reaches only approximately 2,000 members.
HCA's contracts with health plans are based on a two-year bid (covering the 1996 and 1997 plan years). Payments to plans for nonsubsidized enrollees are linked to the subsidized rates by a factor of 106%.
For the first time, the Healthy Options contracting process includes submittal of bids; health plans are no longer "rate takers" in this process.
Planning begins for SSI managed care.
The High Risk Pool Board determines that Basic Health is equivalent to the high risk pool benefits, effectively closing access to the high risk pool for nonMedicare enrollees.
1995
HB 1046 repeals much of the Health Services Act, substantially altering provisions regarding community rating, and eliminating the minimum benefits package and the employer/individual mandate. However, the Legislature reaffirms provisions on guaranteed issue, portability, limitations on waiting periods for pre-existing conditions, and elimination of individual underwriting.
The Legislature establishes a statutory enrollment target of 200,000 adults in subsidized BHP and 130,000 children in expanded Medicaid coverage/Basic Health Plus. Budget appropriations assume that half of the subsidized enrollment target (or 100,000 members) will be enrolled through employer groups. The Legislature requires health plans in the individual market to offer "model plans" based on the Basic Health schedule of benefits ("Basic Health look-alikes"). The Basic Health schedule of benefits is expanded to include mental health, chemical dependency, and organ transplants. Unlike the "uniform benefit plan" provision from the 1993 Health Services Act, which was repealed, the model plans are not a minimum benefits package. Individual insurance products with lower benefit levels (for example, policies with little or no maternity or pharmacy benefits, or with high deductibles) become common.
Individual underwriting ends.
Basic Health's waiting period for pre-existing conditions is reduced from 12 months to 3 months, the same PEC as that mandated by the Legislature for private insurance products.
Basic Health's Financial Sponsor Program experiences fast growth.
The 1995 Legislature funds reductions in Basic Health premiums (including a $10 minimum premium); coverage for mental health, chemical dependency, and organ transplants; commissions for agents and brokers; and reduced premiums for home care agencies and personal care workers. These program changes are implemented in 1996.
By the end of the year, Health Options is offered in all counties statewide.
1994
Children's eligibility for Medicaid is expanded to 200 percent of Federal Poverty Level. Basic Health and DSHS Medical Assistance implement a "seamless" eligibility system to enroll children below 200% FPL in Basic Health Plus. In July, Basic Health subsidized enrollment drops as families transfer enrollment of children from Basic Health to Basic Health Plus.
Basic Health enrollment doubles since becoming a statewide program and merging with the HCA. However, growth in subsidized coverage is slower than anticipated; marketing and outreach efforts are expanded. Nonsubsidized enrollment begins to grow.
Limited prescription drug benefit is added to Basic Health coverage.
The State Insurance Commissioner adopts rules to accommodate market pooling reforms enacted in 1993 and implement other provisions of the Health Services Act affecting individual insurance products, including:
- A 60-day open enrollment period;
- Portability and "guaranteed issue";
- Limitation of waiting periods for pre-existing conditions (PEC); and
- Elimination of individual underwriting.
Large balances build up in the Health Services Account; the Legislature funds several other health-related programs from this source.
Health plans begin to experience losses in the individual market.
Health plans are aggressively competing for market share in the commercial market, and for public programs such as Basic Health.
Independent provider associations (IPAs) and physician hospital organizations (PHOs) begin to develop and become common throughout the state. Enrollment in the state high risk pool drops off.
1993
Legislature passes the Health Services Act, a comprehensive restructuring of the individual insurance market. The Health Services Act includes provisions on: portability and "guaranteed issue"; limitations on waiting periods for pre-existing conditions; elimination of individual underwriting; insurance market pooling and community rating; a minimum benefits package; and an employer/individual insurance mandate.
Legislature makes Basic Health a permanent program. It is offered statewide, and the plan is merged with the HCA.
Legislature directs the HCA and DSHS to create a seamless system to coordinate eligibility and benefit coverage for Basic Health and Medicaid enrollees. Establishes Basic Health Plus (BH Plus) program for children, and the Maternity Benefits Program.
Basic Health nonsubsidized program is established for employers and individuals who are not low income.
Legislature establishes the Health Services Account and enacts taxes to support it.
Healthy Options expands to King, Stevens, Ferry, and Pend Oreille counties in October.
1992
Basic Health adds capacity for 2,000 more enrollees in Grays Harbor, Klickitat, and Skamania counties, areas affected by cutbacks in the northwest timber industry.
Sunset clause would terminate Basic Health effective July 1, 1992, unless the program is reauthorized. Legislature funds Basic Health to continue for an additional year.
Medicaid managed care (Healthy Options) begins in Spokane County in July. In the Healthy Options contracting process, health plans participate as "rate takers."
1991
Basic Health reaches mandated enrollment of 22,000 enrollees; waiting list implemented.
1990
Basic Health expands to Clark, Snohomish, Yakima, and Walla Walla counties, and the northeast tri-counties and Othello areas. Capacity added in King, Pierce, and Spokane counties.
1989
Basic Health expands to Pierce and Clallam counties. Capacity added in King County. Enrollment growth in "Value Plans" is slow.
1988
Basic Health begins as a pilot demonstration program, open to 4,000 residents in King and Spokane counties. Benefits include preventive care, hospital, physician services, emergency room, ambulance, and maternity (through DSHS Medicaid).
Health plans request legislative authorization to offer "Value Plans," exempt from statutorily mandated benefits. Enabling legislation passes. "Value Plans" are marketed (with underwriting).
The Legislature creates the Health Care Authority and the Public Employees Benefits Board (PEBB). PEBB is authorized to offer a self-insured plan. The high risk pool is established.
1987
The Health Care Access Act of 1987 establishes the Washington Basic Health Plan, the first program of its kind in the nation. The enabling legislation allows dual eligibility with Medicaid, but not with Medicare.
1986
Washington Health Care Project Commission issues the "McPhaden Report." The report's recommendations become the basis for the Basic Health Plan and a state high-risk pool.
Estimated 12-14 percent of Washington State residents are uninsured.
Soundcare (KPS) pilot continues.
Washington State has a healthy individual insurance market, with around 30 plans participating. In the individual market, individual underwriting, riders, etc., are common (continues through 1994).
