How Obamacare Saved the GOP Budget

While Republicans in the state Senate’s Majority Coalition Caucus aren’t known for their love of Obamacare, that doesn’t mean they’re against hitching their budget to it.

This much became ironically clear last week with the unveiling of the Senate’s $32.5 billion spending plan, which relies on spending reductions, savings and some nimble money juggling to throw $1 billion at basic education and close the expected $1.2 billion budget deficit. The Senate passed the budget late last week by a 30-18 vote, with seven minority Democrats joining with their more conservative colleagues to help send the budget to the House.

A not-to-be-scoffed-at chunk of the Senate budget’s expected savings come via the Affordable Care Act, or Obamacare. Much of the savings comes from accepting more federal funding to expand Medicaid – a step other Republican state legislatures are proving far less willing to take. But $127 million in savings comes from kicking low-income, part-time public employees off state-provided health care and onto a private insurance exchange created under Obamacare.

This, even though other sections of the budget halve funding for the exchange, which won’t be operational when the budget goes into effect.

“I laughed,” says Sen. Karen Keiser, D-Kent, of her initial reaction to the Senate’s proposed budget.

“It’s diabolical. It makes your head spin. And maybe that’s what they’re trying to do.” Keiser was one of 18 lawmakers to vote against the proposed budget.

“It’s a financing tool that budget writers elected to use,” counters Sen. Michael Baumgartner, R-Spokane, pointing out that shifting the cost of health-care benefits to the federal government allowed for “dramatically increasing funding for K-12 education” without raising taxes. Baumgartner says the budget is a result of a bipartisan process, and although he’s personally leery of continuing to increase the state’s dependence on the federal government, the decision was made to utilize the savings Obamacare offered.

“This legislature in Washington cannot solve the dysfunction in Washington DC, but we should be very concerned about enabling it,” says Baumgartner, who admits that the last election provided a referendum on Obamacare, whether he likes it or not. Of Obamacare, Baumgartner says, “It’s what the people of Washington want.”

Under the Senate’s budget, roughly 20,000 part-time state workers, higher education and non-certificated K-12 employees would lose their state-funded health care, and instead would be pushed into purchasing federally subsidized health care through the Washington Health Benefit Exchange. State employees who work between 20 and 30 hours a week and meet income requirements would receive a federal subsidy for the purchase. The state would then increase their pay by $2 an hour to cover what the federal subsidy doesn’t.

“Overall, the Affordable Care Act was meant to expand health care to people who don’t already have it,” says Tim Welch, a spokesman for the Washington Federation of State Employees.

But the Senate budget misuses the program as a “ploy” to make their budget pencil out, he says, and hurts state workers as it does so.

Many of these workers -- from community colleges to state parks to the Department of Agriculture -- are take the low-paying, part-time jobs largely because of the quality health care benefits they receive, according to Keiser and Welch.

“Amongst our membership, it’s unacceptable to create two classes of state employees when it comes to health care benefits,” says Welch, arguing that part-time state employees who work alongside full-time workers shouldn’t be forced to make due with health benefits that don’t stack up.

“We don’t think that’s any way for a large employer to treat employees,” he says.

The questions don’t end there. While the Senate’s budget for the 2013-15 biennium would go into effect July 1, the Washington Health Benefit Exchange is still in the early stages of crafting. The coverage offered through the program and how much plans will cost won’t be known until sometime this summer, says Washington Health Care Exchange spokesperson Bethany Frey, and registration doesn’t start until October. The Exchange won’t be fully functional until January 2014.

Further complicating matters, and in a move Keiser calls the “height of hypocrisy,” the proposed Senate budget only provides funding for the Washington Health Care Exchange at half of the amount that a previous bill this session – HB 1947 – says the program needs to operate. The Senate’s budget caps funding for the exchange at $26 million annually. As the budget writers acknowledged, “this funding level is about 50 percent of the exchange funding request.”

“They had not made a strong case for how and why they were going to use that funding,” says Sen. Baumgartner of the decision to allocate less money for the Health Care Exchange than the agency requested. The conservative lawmaker says the Exchange will be able to function with the means the Senate budget has provided.

Perhaps most importantly, lurking in the background of all this is the question of whether sending part-time state workers to the Washington Health Care Exchange will fly with the federal government. The rules and regulations of Obamacare allow for a $2,000 penalty per worker for large employers that don’t offer insurance. The Senate’s plan aims to get around this penalty by sending part-time workers to the Health Exchange as individuals, not employees of a business.

That might work, says Frey, or it might not.

“We’re not the feds,” says Frey. “I think it’s important that these types of things are cleared with the federal government.”

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