WA hospitals push for veto of lower state insurance reimbursements

Washington hospitals are urging Governor Bob Ferguson to veto a bill that would limit health insurance reimbursement rates for state workers and public school employees. The Washington State Hospital Association warns that the legislation could result in a $100 million annual loss for hospitals. Supporters of the bill argue it will alleviate healthcare costs for patients, suggesting hospitals should reduce executive compensation rather than cut services or jobs. Independent rural hospitals would be exempt from these changes, but other facilities could face increased care costs as they negotiate with insurers to offset losses. Reports indicate that two hospitals in Chelan and Clallam counties are already operating at a loss.

The financial struggles of hospitals have intensified since the COVID-19 pandemic, exacerbated by rising costs for labor and supplies. Additionally, the bill imposes higher business and occupation tax rates, which could add another $60 million in annual expenses for hospitals. An unsuccessful amendment sought to exempt hospitals from the tax increase after 2027.