Notice of Public Hearing for Senate Bill 5372 - 10 Year Analysis Complete

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SB 5372, titled AN ACT Relating to creating the medicaid access program, has been scheduled for a public hearing by the Senate Committee on Health & Long-Term Care.

Date and Time: 02/20/2025 8:00AM (Subject to change by the Legislature.)
Location: J.A. Cherberg Building, Senate Hearing Rm 4 and Virtual, Olympia, WA

The Office of Financial Management has identified this bill as requiring a ten-year projection of increased cost to the taxpayers or affected fee payers.

Ten-year projection:

Fiscal Year		Covered Lives Assessment
2026		$0
2027		$116,598,000
2028		$239,753,294
2029		$239,753,294
2030		$239,753,294
2031		$239,753,294
2032		$239,753,294
2033		$239,753,294
2034		$239,753,294
2035		$239,753,294
Total:		$2,034,624,352

Office of Insurance Commissioner:

Section 3(1)(a) requires all health carriers to pay an annual covered lives assessment beginning January 1st of the plan year following the final approval by CMS. For assessments due the first plan year, the OIC is required to access a per member per month assessment of $0.50 per covered life on health carriers.  Based on October 2024 data for the fully insured commercial market, and limiting the assessment to 3 million member months per carrier, there were 1,093,049 persons covered under a fully insured individual or group health plan in CY2024.  Assuming, for purposes of this fiscal note, that $0.50 per covered life will be assessed and that the number of covered lives for CY2026 will remain the same as CY2024, estimated revenue of $6,558,294 (1,093,049 covered lives x $0.50 x 12 member months) will be collected in the first year.  The number of covered lives will be captured from health carriers via the CY2026 insurance premium tax return, which is due in March 2027.   OIC will then calculate and bill health carriers for the first plan year with a due date of July 2027. 

Section 3(1)(b) requires that each year, on or before May 15th, HCA must determine the covered lives assessment for the calendar year.  Section 3(2)(b) limits the assessments to the first 3,000,000 member months of fully insured lives per health carrier.  For each health carrier, the assessment shall apply to member months of all group health plan lives first, followed by member months of individual health plan lives.  The HCA is unable to provide the amount needed to fund the professional services rate increases for CY2027 and beyond at this time.  For purposes of this fiscal note, the OIC assumes the same assessment as the first plan year.

Wash State Health Care Authority:

Section 3: All health carriers and Managed Care Organizations (MCOs) will pay an assessment beginning January 1 of the year following the approval by Centers for Medicare and Medicaid Services (CMS).  

For health carriers, the first year covered lives assessment is set at $0.50 per covered life. Subsequent assessments shall be made by the Health Care Authority (HCA) by May 15 each year. The covered lives assessment shall apply to the health carrier group plan lives followed by individual health plan lives, applicable to the first three million (3 million) member months (or 250,000 covered lives) within the group plan then individual plan.

For MCOs, the first plan year, HCA will assess a per member per month assessment of $18 for MCOs. On or before May 15 of the first plan year and on or before May 15 of each subsequent year, HCA will determine the assessment rate necessary to fund the professional services rate increase. HCA will notify MCOs annually of the estimated assessment for the upcoming year. Payment collections are to be made no more frequently than quarterly. 

Assessment fees are applied to the first 3,000,000 member months per MCOs. Payments from MCOs are due within 45 days of the payment schedule determined by HCA, with interest accrued on the amounts received after the 45-day period.  

Assumptions are based on CMS approval not being provided until sometime in calendar year 2026, resulting in Plan Year 1 starting January 1, 2027.

HCA Impact:

The bill requires HCA and the Office of the Insurance Commissioner (OIC) to collect covered lives assessment from MCO and commercial health plans. The assessment is capped at 3,000,000 member months per plan. The revenue is determined by multiplying member months by $18 (MCOs) and $0.50 (commercial plans) for the initial year. HCA assumes that the assessment on Medicaid MCOs would be included as part of the non-benefit component of the MCO rates effective January 2027. MCOs will pay the assessment to HCA which will be deposited into a designated account with the state Treasurer. This revenue is intended to fund the rate increase for Apple Health professional services performed. It is unknown how the assessment rate may change over time.  

Assumptions:

The total collected amount will change every year based on changes in the assessment fee that are driven by:

•           Changes in the client caseload/enrollments.

•           Recalculation of the assessment fee based on funding needs for the professional rate increase.

•           Remaining fund balance available to pay the rates.

HBE Impacts:

Indeterminate. The assessment for health carriers applies to the first 3,000,000 member months per health carrier, with group health plan lives being charged the assessment before individual health plans, like those offered on the Exchange. It is unknown how this assessment would impact premiums for qualified health plans (QHP) offered on the exchange, and the number of exchange customers the assessment would apply to will likely differ by carrier so any premium impacts would be different by carrier. Any increase to premiums would be subject to the two percent premium tax the Exchange earns on QHP enrolled through Washington Healthplanfinder which would be deposited to the Health Benefit Exchange Account in the state treasury.

Ten-year projection prepared in consultation with the following agencies:

Wash State Health Care Authority
Office of Insurance Commissioner


Bill sponsors and contact information:

Senator Marcus Riccelli, Prime Sponsor
Democrat
(360) 786-7604
marcus.riccelli@leg.wa.gov

Senator Paul Harris
Republican
(360) 786-7632
paul.harris@leg.wa.gov

Senator Jessica Bateman
Democrat
(360) 786-7642
jessica.bateman@leg.wa.gov

Senator Marko Liias
Democrat
(360) 786-7640
marko.liias@leg.wa.gov

Senator T'wina Nobles
Democrat
(360) 786-7654
T'wina.Nobles@leg.wa.gov

Senator Javier Valdez
Democrat
(360) 786-7690
javier.valdez@leg.wa.gov


Senate Committee on Health & Long-Term Care members and contact information:

Senator Jessica Bateman
Democrat
(360) 786-7642
jessica.bateman@leg.wa.gov

Senator Mike Chapman
Democrat
(360) 786-7646
mike.chapman@leg.wa.gov

Senator Leonard Christian
Republican
(360) 786-7606
leonard.christian@leg.wa.gov

Senator Annette Cleveland
Democrat
(360) 786-7696
annette.cleveland@leg.wa.gov

Senator Paul Harris
Republican
(360) 786-7632
paul.harris@leg.wa.gov

Senator Jeff Holy
Republican
(360) 786-7610
jeff.holy@leg.wa.gov

Senator Ron Muzzall
Republican
(360) 786-7618
ron.muzzall@leg.wa.gov

Senator Tina Orwall
Democrat
(360) 786-7664
tina.orwall@leg.wa.gov

Senator Marcus Riccelli
Democrat
(360) 786-7604
marcus.riccelli@leg.wa.gov

Senator June Robinson
Democrat
(360) 786-7674
june.robinson@leg.wa.gov

Senator Vandana Slatter
Democrat
(360) 786-7694
vandana.slatter@leg.wa.gov



Legislative Bill Information Website: http://apps.leg.wa.gov/billinfo/

Initiative 960 Website: http://www.ofm.wa.gov/tax/default.asp