As Republicans in Congress move to repeal the Affordable Care Act, Washington state’s experience in 1990s with health-care reform may offer a lesson. Repealing unpopular parts of the state’s health-care law led to the collapse of the insurance market.
Boeing. Microsoft. Amazon. The Washington Health Services Act of 1993.
Washington has long been on the national vanguard, be it in aerospace, software, e-commerce or wide-ranging health-care laws undone by subsequent Republican electoral victories.
As congressional Republicans look to repeal the Affordable Care Act (aka Obamacare), Washington’s experience with health-care reform in the 1990s offers an illustrative example of the possible consequences of repealing only the unpopular parts of a law designed with many interlocking pieces.
What began as the most ambitious health-care overhaul in the nation was hacked away to the point where it became impossible to buy individual health insurance anywhere in the state.
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Here’s what happened:
The Legislature passed a comprehensive health-care law in 1993, after several years of study and debate.
More than 15 years in advance, it looked a lot like the ACA.
It required most employers to provide health insurance to employees. It required individuals to get health insurance or pay a penalty. It required insurance companies to sell policies to anybody — whether they had pre-existing medical conditions or not. It required those policies to cover a set of basic benefits — things like prescription drugs and maternity care. It expanded Medicaid to give insurance to those who couldn’t afford it.
Like the passage of the ACA, the 1993 law led to huge Republican victories in the next election.
In 1994, Washington Republicans won their biggest victory in nearly 50 years, winning back the state House and coming within one seat in the state Senate.
They campaigned on ditching the unpopular parts of the health-care law, most specifically the mandates.
And they followed through.
The 1993 law, unlike Obamacare, never went into full effect.
The 1995 Legislature repealed most of it, including the individual mandate to carry health insurance. But they kept the ban on denying insurance for pre-existing conditions, known in insurance-speak as “guaranteed issue” — you’re guaranteed to be offered insurance, regardless of your health.
“Republicans came in, and they decided to gut the bill, not dissimilar to right now,” said Dr. Bob Crittenden, an aide to Gov. Jay Inslee, who, working for then-Gov. Booth Gardner, wrote the original version of the health-care bill. “They took out the mandate and left the guaranteed issue. The market went into a tailspin one-and-a-half years later.”
The defanged health-care law cratered the market for individual insurance policies (as opposed to employer-provided insurance or government-provided insurance, like Medicare and Medicaid, which was largely unaffected).
By 1998, three years after the changes to the law went through, 17 of the 19 insurers selling individual policies in Washington had left the state, according to a study by an insurance-industry group.
By 1999, it was impossible to buy an individual policy in Washington. Every insurer had pulled out.
Premera Blue Cross said it lost more than $120 million in Washington before it stopped selling individual policies.
With no requirement to buy insurance — and the guarantee that people could buy insurance if they got sick — healthy people could hold off, only signing up if they needed medical care.
A sicker population of people buying insurance pushed premiums up. Which, in turn, led more healthy people to hold off. Which pushed premiums up.
“They call it a death spiral,” Crittenden said.
“The whole principle of insurance is you buy it before you need it,” a health adviser to then-Gov. Gary Locke said in 1999, just before the last two insurers left the state. “You can’t buy fire insurance when your house is burning down.”
State Senate Majority Leader Mark Schoesler, R-Ritzville, was in the House when the health-care legislation was passed, then later changed.
He voted against the legislation (it got only two Republican votes in the Senate and none in the House) and for the partial repeals.
He said lawmakers made some mistakes, like keeping the list of basic benefits that policies had to cover, which helped drive up premiums.
But Wednesday, after first denying that the Washington law had an individual mandate, he praised President-elect Donald Trump for looking at doing much of what Washington did in the 1990s.
“We did keep some of those very popular parts, and I think you’ve heard the president-elect talk about it,” Schoesler said. “The governor focuses on scaring people; the president-elect has said there’s some popular parts he would like to keep.”
Inslee has been issuing warnings in recent weeks that repeal of the ACA would leave thousands of Washington residents without health coverage.
Trump has promised both to repeal the ACA wholesale — “completely repeal Obamacare,” it says on his campaign website — and to maintain its ban on denying coverage to people with pre-existing conditions.
Republicans can repeal much of the law — including the individual mandate and subsidies that help make private insurance plans affordable — without any Democratic votes.
But it would almost certainly take Democratic votes in the Senate to repeal the pre-existing conditions provision or to pass a replacement health-care plan, both of which would be subject to a filibuster.
It’s unclear what will happen next.
House Speaker Paul Ryan, R-Wis., has favored a so-called “repeal and delay” strategy, in which Congress votes immediately to repeal parts of the law, but with an effective date years in the future, to give them more time to develop a replacement.
But Trump on Tuesday told The New York Times he wants an immediate repeal and a replacement within weeks.
In Washington, the law has cut the number of people without health insurance in half, but also left some with escalating premiums and sky-high deductibles.
U.S. Rep. Jaime Herrera Beutler, R-Vancouver, said Tuesday she opposes repeal and delay. Any repeal, she wrote in a letter to Ryan, “should be accompanied by a simultaneous and immediate strategy for replacing it.”
Rep. Cathy McMorris Rodgers, R-Spokane, and a member of Ryan’s leadership team, wrote Tuesday of a “stable and smooth transition period when the law is repealed.”
In a joint statement, Washington’s four Republican representatives — Herrera Beutler, McMorris Rodgers, Rep. Dave Reichert of Auburn and Rep. Dan Newhouse of Sunnyside — said their goal is a “replacement in concurrence with repeal,” but did not elaborate.
None responded to questions about the effects of repealing the mandate, but leaving in place guaranteed issue, or what they’d like in a replacement bill.
The uncertainty has left state Democrats and health-care officials wary of a national repeat of the 1990s in Washington.
“The president-elect has said just keep protection for pre-existing conditions but we won’t require people to get in the pool,” Inslee said at a health-care conference last week. “We know what happens then. We had a total collapse in ’93 because people got insured only when they’re sick.”
Melanie Coon, a Premera spokeswoman, said the insurer would like to see something almost no one is proposing: a stiffer individual mandate.
“The penalty just isn’t high enough,” she said. “It’s the only way you can get people to get in and stay in.”
Pam MacEwan was on the commission that was to work out the specific provisions of Washington’s health reform after it passed in 1993, and now runs the state’s health-insurance exchange.
Her warning about repeal, issued at the health-care conference last week, also served, perhaps unintentionally, as a warning about the future of the ACA, which passed seven years ago without a single Republican vote.
“I worked on reform in the ’90s; it took two years to pass, two years to implement and 20 minutes to repeal by Republicans. They kept the parts they liked, took out the parts they didn’t, which caused collapse,” MacEwan said.
“Things that endure are done in a bipartisan way.”
Information in this article, originally published Jan. 12, 2017, was corrected Jan. 13, 2017. A previous version of this story incorrectly stated how many votes it would take in the U.S. Senate to repeal the Obamacare requirement that people get health insurance. That could be done with a simple majority vote.