For Consumers

New legislative report on affordability reveals current state of Washington’s health care system

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December 1, 2023

OLYMPIA, Wash. —  The Office of the Insurance Commissioner has delivered a preliminary report to legislators describing the current state of Washington’s health care system. The report explores recent market consolidation and a process for evaluating changes that could improve affordability. 

The Legislature provided both Insurance Commissioner Mike Kreidler and Attorney General Bob Ferguson with funding last year to review key factors impacting the affordability of health care coverage for individuals, businesses and state government. The two offices were tasked with compiling policy options for improving the affordability of health care in Washington. 

The final report is due to the Legislature in August 2024.

“Washington state has made tremendous progress in helping people access health coverage,” said Kreidler. “Our uninsured rate is one of the lowest in the country, and I’m so proud we were early adopters of Medicaid expansion. But too many people have health insurance they cannot afford to use. We need to get at the underlying costs of health care and I'm grateful the Legislature is helping us do this critical work.”  

A 2022 survey found that 62% of people in Washington had trouble affording health care in the past year and had either rationed their prescriptions, delayed care or depleted their savings to pay for health care. Eighty-one percent said they worried about affording health care in the future. 

The report describes how the cost of health care is driven by two factors: The type and number of health services people use, and the price of those services. Employers, including Washington state, have tried to reduce health care costs by promoting the use of generic drugs and high-deductible plans and encouraging the use of higher quality, lower cost health care providers and facilities. But the structure of our health care system, including consolidation of health insurers, hospitals and health care providers, has limited the impact of these efforts. 

The preliminary report includes details on: 

  • The structure of Washington’s current health care system, including information about vertical and horizontal consolidation of health insurers, hospitals and health care providers. 
  • Private equity investment trends in Washington.
  • An overview of potential policy options to improve health care affordability, some of which have already been adopted in Washington. 
  • An overview of current enforcement of federal and state antitrust laws aimed at securing strong market competition. 
  • A review of how other states monitor and challenge health care consolidation. 
  • A review of non-compete agreements in health care and anti-competitive provisions in insurer/provider contracts.

The final report will include in-depth actuarial and economic analysis of the policy options that generate the most interest from legislators and interest groups.