Patty Kuderer

Patty Kuderer, D-Bellevue, serves as a state senator for Washington’s 48th district. Kuderer’s campaign website.

State of the healthcare system

1. In August, the Office of the Insurance Commissioner released a report highlighting five data-driven steps to lower health care costs in Washington. If elected, do you plan to work with the legislature to take action on those steps? What are additional steps you would want to implement to reduce health care costs in Washington? If not, how do you plan to address the health care cost crisis in Washington?

Kuderer: I fully support working with the legislature to address the five data-driven steps outlined by the Office of the Insurance Commissioner (OIC) to lower healthcare costs in Washington. In addition to these steps, I would focus on improving transparency in billing, promoting competition within the healthcare marketplace, and incentivizing preventive care to reduce long-term costs. Addressing administrative inefficiencies and cutting down on unnecessary procedures would also be key strategies in tackling the healthcare cost crisis. I will also ensure the laws we have on the books, including the recent law to reduce prescription drug prices, are fully and fairly implemented.

2. The state is interested in doubling spending on primary care. What is OIC’s role, if any, in achieving the target of 12% of total medical spending in primary care delivery?

Kuderer: The OIC plays a crucial role in ensuring that insurance companies prioritize primary care spending as part of their broader coverage offerings. By setting clear guidelines and working closely with healthcare providers, insurers, and the legislature, the OIC can help the state achieve the target of 12% of medical spending on primary care. Encouraging early intervention and preventive care should also be part of the OIC’s mandate to improve overall health outcomes and reduce long-term costs. Additionally, the Commissioner has a role to play in public outreach and providing information to consumers to assist them in their healthcare insurance choices.

3. There is strong and growing evidence that High Deductible Health Plan (HDHPs) adversely impact patients with chronic disease, and there are equity impacts for low-income members on HDHPs.  For example, a recent study showed that people with diabetes in HDHPs were at significantly greater risk for eight serious disease complications. Should our state continue to promote HDHPs, or is there a different alternative?

Kuderer: It is my understanding the OIC does not promote HDHPs and I do not intend to do so, either. This is because, as you noted, HDHPs can adversely impact individuals with chronic diseases and low-income members. I believe the state should explore alternative solutions, such as tiered healthcare plans that provide more coverage for essential services and chronic conditions, capping deductibles and supporting standardization of health plans. This would reduce the equity gap and ensure that those with ongoing healthcare needs are not disproportionately burdened by out-of-pocket costs, while still offering flexibility in coverage options.

4. This question concerns federal Mental Health Parity legislation. Even though it is federal law, would the OIC nonetheless take up an enforcement role for our state? If so, to what extent?

Kuderer: Although federal legislation mandates mental health parity, the fact is we are far from mental health parity. Yes, the OIC should take an active role in enforcement within Washington state, but I believe the OIC should also work collaboratively with our federal delegation toward this goal. The OIC should ensure that all insurers comply with parity laws, meaning mental health services must be covered to the same extent as physical health services. By conducting regular audits and investigations, we can ensure mental health services are accessible and affordable, promoting equitable care for all residents.

Administrative procedures and regulation

5. It takes a long time to have newly filed plans reviewed in our state compared with other states. How would your administration ensure that new, innovative products could enter the Washington marketplace more quickly while adequately protecting consumers?

Kuderer: To expedite the review process for new insurance plans, I would work to streamline the OIC’s procedures while maintaining rigorous consumer protection standards. This could involve increasing staffing and/or implementing technology to reduce backlogs. The goal would be to allow innovative insurance products to enter the marketplace more quickly, ensuring Washingtonians have access to the best possible coverage without sacrificing regulatory oversight.

6. The DOI reviews rate filings for health insurers which is costly and time consuming.  How would you approach rate filings, assess operating margin, and assess the appropriate amount of risk-based capital that is required? Does your approach differ for a non-profit versus a publicly traded health plan?

Kuderer: The OIC’s role is to approve rates if actuarially reasonable per the statute, based on negotiated rates with providers and trends in medical spending. The statute requires the rates to be adequate, and not excessive nor unfairly discriminatory, which relate specifically to operating margin and amount of risk=based capital. Simply put, when assessing rate filings, I will prioritize consumer protection while adhering to the statutory requirements. That is true whether it is a not-for-profit or publicly traded health plan. However, I would ensure a balanced approach, recognizing the goal that not-for-profit companies maintain financial stability while reinvesting in care. For publicly traded plans, I would ensure that profits are not made at the expense of fair pricing or quality care for consumers.

Phil Fortunato

Phil Fortunato, R-Auburn, currently serves as as a state senator for Washington’s 31st district. Phil Fortunato’s campaign website. 

State of the healthcare system

1. In August, the Office of the Insurance Commissioner released a report highlighting five data-driven steps to lower health care costs in Washington. If elected, do you plan to work with the legislature to take action on those steps? What are additional steps you would want to implement to reduce health care costs in Washington? If not, how do you plan to address the health care cost crisis in Washington?

Fortunato: 1. Establish a reinsurance program in the individual and small group

While the OIC is not a policy maker, this proposal is an important initiative to lower health care cost and improve and stabilize the individual and small group market. In 2017 the State of Alaska filed for a waiver from the Affordable Care Act (ACA) under section 1332. This waiver allows Alaska to receive federal pass-through funding which is used to support the reinsurance program.

As a result of this program, it has reduced premium in the individual market and enhanced market stability. By lowering premiums and stabilizing the market it has helped small businesses and their employees have access to more options.

Other cost saving ideas include eliminating the state Certificate of Need, increasing provider reimbursement rates, lessening regulation on purchasing or providing insurance.

I will embrace innovative approaches to reduce premium, increase insurer participation, stabilize the market and access Federal support.

2. Increase the medical loss ratio (MLR) standard

As the report indicates, this proposal will have a limited impact on actually lowering premiums. Many of the insurers are already above the 88% threshold for most of their product lines. In addition, the study includes 2020 and 2021 which generally had lower loss ratios as a result of Covid 19. Finally, there is a growing trend in group insurance to offer partially self-insured products with stop loss protections.

3. Use Reference-based pricing (RBP)

Within the provider community Reference Based Pricing is controversial. As indicated in the study the data analysis also has limitations and many caveats. This approach is not yet refined and runs the risk of alienating the provider community. I would bring the various stakeholders together to improve the quality and accessibility of healthcare.

4. Hospital global budgeting (HGB)

This approach tackles the challenge of a policy that is limited in scope as it applies to all payers – Medicare, Medicaid and commercial health insurers. It will also allow the state to work directly with the payers to increase spending on primary care and behavioral health. As outlined in the report it also requires a waiver from CMS which could potentially take a long time and require State resources to secure. It merits further consideration which I will support.

5. Meeting the HCCT Board cost growth benchmarks

Imposing price controls has shown to be very challenging and confrontational. The disadvantages in the report outweigh the advantages. A better approach is to foster cooperation amongst all the stakeholders.

2. The state is interested in doubling spending on primary What is OIC’s role, if any, in achieving the target of 12% of total medical spending in primary care delivery?

Fortunato: The OIC’s role is to be proactive in soliciting input from a variety of sources to encourage a dialog on how to achieve this goal. I would look for guidance and advice from successful models for managing, educating and addressing co-morbidities, similar to the approach Molina Healthcare has developed for Medicare and Medicaid. Educating and incenting Providers to address primary care is important as is the reimbursement paid to Primary Care providers.

3. There is strong and growing evidence that High Deductible Health Plan (HDHPs) adversely impact patients with chronic disease, and there are equity impacts for low-income members on HDHPs. For example, a recent study showed that people with diabetes in HDHPs were at significantly greater risk for eight serious disease complications. Should our state continue to promote HDHPs, or is there a different alternative?

Fortunato: HDHP plans are not a panacea. They appeal to a more sophisticated patient who has the financial wherewithal to budget and manage an investment side fund. Many insurance companies price their HDHP plans as the lowest cost option. Before HCA, companies like Whole Foods offered their employees a $2500 HDHP coupled with a $2500 HSA effectively giving the employee 100% coverage with pre-tax dollars.

Unfortunately, without the HSA coupling, patients do not fully understand exactly how they work. For this segment of the population a better approach is to have a traditional PPO or HMO plan design which includes co- pays for office visits and co-pays for pharmacy. HDHP plans are not geared toward patients with comorbidities. For a patient with serious/chronic illnesses, high risk pools are the answer. High-risk pool plans offer health insurance coverage subsidized by a state government.

4. This question concerns federal Mental Health Parity legislation. Even though it is federal law, would the OIC nonetheless take up an enforcement role for our state? If so, to what extent?

Fortunato: The shortage of Mental Health providers is a significant challenge and is one reason I was a sponsor of SB 5920 to lift the state’s Certificate of Need requirement for psychiatric hospitals and beds.

Accessing care for behavioral health treatment does not have the stigma it once did. We need to promote this all-important care into the delivery model. Financial resources should be assigned to development of program to integrate Behavioral Health into Primary Care which will improve outcomes and have a favorable impact on reducing costs. Taking up an enforcement role is not a good use of budget dollars.

Administrative procedures and regulation

5. It takes a long time to have newly filed plans reviewed in our state compared with other How would your administration ensure that new, innovative products could enter the Washington marketplace more quickly while adequately protecting consumers?

Fortunato: I will work with my staff to evaluate how other states are using streamlined methods and systems to evaluate new products and services. We will also conduct an industry survey to solicit thoughts and ideas from stakeholders. We will explore technologies and automation utilizing digital platforms and AI machine learning. We will tap into the National Association of Insurance Commissioners (NAIC) to access their resources and evaluation of various technologies and systems.

6. The DOI reviews rate filings for health insurers which is costly and time How would you approach rate filings, assess operating margin, and assess the appropriate amount of risk-based capital that is required? Does your approach differ for a non-profit versus a publicly traded health plan?

Fortunato: Similar to my answer above I will seek the counsel of the stakeholders, the NAIC and vendors to evaluate the current system and target opportunities for improvement. All plans should be treated equally