WA hospitals push for veto of lower state insurance reimbursements

Washington hospitals are calling on 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 projects that if enacted, the bill could result in losses of around $100 million annually for hospitals. Proponents of the legislation argue it aims to lower healthcare costs and reduce out-of-pocket expenses for patients. However, the hospital association warns that reduced state payments could force hospitals to negotiate higher rates with other insurers, potentially leading to increased costs for all patients. Independent rural hospitals would be exempt, but two hospitals in Chelan and Clallam counties recently reported negative operating margins, highlighting financial struggles.

The situation is exacerbated by a new higher business and occupation tax, estimated to cost hospitals an additional $60 million yearly. The amendment to exempt hospitals from this tax after 2027 was unsuccessful. Since the COVID-19 pandemic, healthcare systems have faced significant financial challenges, raising concerns about job reductions and service cuts in the sector.