More on the Medicaid problem

Plus the greens go big for Upthegrove, updates on the 6th CD and the 14th LD, and the PDC sends some nastygram

Editor’s Note: We’ve got lots of good stuff for you this morning. We open with Part II of Sara’s look at the Medicaid problem in Washington. If you missed it, check out Part 1.

A bill introduced by the Washington State Medical Association in 2024 proposed a tax on managed care organizations and commercial health insurers to help fund a broad increase in the Medicaid reimbursement rate in Washington. 

The bill didn’t make it very far after receiving pushback from health insurance carriers, such as Premera and Blue Shield, and a lukewarm reception from a key implementation partner, the state Health Care Authority, sending WSMA back to the drawing board before the 2025 session. 

One of the biggest arguments against lifting the Medicaid reimbursement rate to the Medicare reimbursement rate is the overwhelming cost to the state. 

In 2022, 33% of all births in Washington state were paid for by Medicaid. Side note: We’re a lean operation, which is why we rely Shutterstock for photos. The team gave this stock photo a 5.2 out of 10 on the cheesy scale. Photo by Shutterstock.

The actual cost of the increased reimbursement rate is just one expense. The administrative costs to the state Health Care Authority, which manages Medicaid in partnership with the federal Center for Medicare and Medicaid Services, and the state Insurance Commissioner’s Office, which monitors insurers, would also be substantial. 

The financial barriers around raising the Medicaid reimbursement rate make progressive efforts to establish universal health coverage in Washington seem all the more remote. After all, if the state can’t afford to boost Medicaid reimbursement to the same levels as Medicare—an investment that only addresses roughly two million of the 8 million people living in Washington—how could the state possibly afford to insure all 8 million residents and administer such a program? 

The short answer is that, given the existing sources of revenue for the state budget, it can’t afford the investment. Some other tax revenue base will be necessary to make it happen. Still, the goal of providing affordable health insurance to all who need it remains a core priority for health care reformers. 

Why you should care about this: The Affordable Care Act gave states that expanded Medicaid to include low-income adults a lot of federal money as an incentive to expand coverage. Now, nearly 25 million Americans are insured under Medicaid. Washington state opted into Medicaid expansion nearly 10 years ago, enrolling 800,000 previously uninsured adults in Medicaid. Still, the state has struggled to keep reimbursement rates for physicians competitive, making it challenging for many Medicaid recipients to access care. This article untangles how the upstream health policy decisions in Washington D.C. and Olympia, pre- and post-COVID, impact patients and providers.