Shifting over to a universal health care system would likely impose large new taxes on Washington residents

TJ Martinell
The Center Square Washington

For several years Washington state has looked at the concept of a universal or single-payer system that would guarantee some form of health care for all residents. Per the state Legislature’s directive, the state Universal Health Care Commission is examining the many practical challenges in doing so, which could influence their recommendations moving forward. 

Currently, through Cascade Select, Washington offers government-subsidized health plans that pay providers publicly determined rates. However, shifting over to a universal health care system “would impose large new taxes, as is done in other countries, as the system shifts from a combination of public and private coverage to public coverage,” according to the commission’s 2022 report to the Legislature.

One legal hurdle for the commission is the federal Employee Retirement Income Security Act, which preempts state laws on various aspects of health care.

At its Oct. 12 meeting, the UHCC voted to take recommendations from its Finance Technical Advisory Committee “under advisement” on how the different models could navigate existing federal laws while also allowing a transition toward a single payer system. 

Offering various options to the commission that would either avoid or survive a legal challenge, FTAC outlined several possible changes to the state’s health care system that included:

• Allowing employers to continue offering plans while developing “a universal health care plan attractive enough that employers forgo offering their own coverage.”
  
• Allowing employers to continue offering health coverage or pay a payroll tax, i.e. “pay or play.”
  
• Expanding the existing public option that employees could opt into.

According to meeting documents, “FTAC members agreed that ‘pay or play’ is an option that should be further explored to be considered in the design of the universal system.”

One idea that may get a second look in the Legislature is Senate Bill 5335 introduced this year by Sen. Bob Hasegawa. The bill would create the Washington Health Trust within the state Department of Health and provide “essential health benefits” to all state residents. The trust would be funded through a variety of new taxes on employers and their employees, sole proprietors and 8.5% tax on capital gains, with homes or retirement accounts exempted. 

At the request of a group of state legislators, the commission is conducting an analysis of the concept with stakeholders, including Whole Washington, with a report anticipated in June 2024.

Equity is expected to heavily influence whatever system is proposed. Earlier this year the commission voted to incorporate the Washington State Health Care Authority (HCA) health “equity toolkit” and framework through which proposals are considered. Health equity is defined in the toolkit as “everyone has a fair and just opportunity to be as healthy as possible. This requires removing obstacles to health such as poverty, discrimination, and their consequences, including powerlessness and lack of access to good jobs with fair pay, quality education and housing, safe environments, and health care.”

According to the commission’s newly-approved 2023 report to the Legislature, “financing and coverage policies and structures in the current health care system have contributed to the discrimination and marginalization of individuals with disabilities, low-income individuals, and people of color. Further, in the current system, an individual’s coverage and access to quality care is largely determined by how the care is financed.

“The development and implementation of a unified financing system to support universal health care is an opportunity to examine existing structures and to establish a new system that ensures equitable access to affordable and quality care and wellbeing for all Washingtonians, including the health care workforce.”

This report was first published by The Center Square Washington.