WASHINGTON, D.C. LOOKS TO THE BLUES

Volume 29. Issue 513 April 14, 2008

Anna C. Spencer

The District of Columbia is considering a plan that, if enacted, would enable the nation’s capitol to reach near-universal coverage by combining subsidies for the low-income with an individual mandate.

On April 1, Washington, D.C. City Councilman David Catania unveiled the Healthy DC Act of 2008, a proposal to offer subsidized health insurance to the roughly 25,000 uninsured District residents who can’t afford commercial plans but earn too much to enroll in Medicaid or the D.C. Health Alliance (a program that is funded solely by the District for low-income residents, including illegal immigrants, who don’t qualify for Medicaid).

The proposal is unusual in that it relies greatly on CareFirst Blue Cross Blue Shield, the largest health insurer in the mid-Atlantic region. CareFirst would be obligated to contribute $5 million, provide administration and make all of its network providers available to enrollees. The city would subsidize about $21 million of the cost.

“Healthy DC is based on the concept of shared responsibility,” said CouncilmanCatania. “It is designed for residents who can afford to contribute to a health plan, but who cannot afford several hundred dollars per month.”

Operating in D.C., Maryland and northern Virginia, CareFirst has 3.1 million enrollees, and more than 80 percent of providers in the region participate in one or more of its networks. A nonprofit, CareFirst has come under fire from District officials for allegedly not fulfilling its mission as a charitable institution.

"We continue to work with Washington, D.C. officials in an effort to shape a viable, sustainable plan to provide health-care coverage for uninsured District residents,” said a CareFirst spokesman. “It is an admirable goal and a complex undertaking.”

Residents with incomes above 200 percent of the federal poverty level would be eligible for coverage and would pay no more than 3 percent of their gross income. Those who forego coverage would be subject to a $250 penalty; the District administration would issue regulations spelling out how the mandate and the penalty would be implemented.

Residents would pay monthly premiums of $20 to $100, depending on their incomes. As an incentive for healthy behaviors, Carefirst would reduce individual deductibles by half for enrollees who select a medical home, take a health risk assessment and comply with disease management programs.

The District’s share of the financing—$21 million—would come from a 2 percent hike in the tax on health maintenance organizations, doubling the tax on cigarettes to $2 a pack, and upping the tax on commercial insurers by .3 percent. “The benefits to the District in saved health-care costs and improved quality of life for people will far outweigh the costs incurred by taxpayers,” said Benjamin Young, chief of staff for Councilman Catania.

In an effort to avoid “crowd-out,” individuals would not be eligible unless they have resided in the District and been uninsured for at least six months. In addition, employers who provide insurance would be required to prove on corporate tax returns that they continue to spend the same amount per employee on health-care benefits as they did before Healthy DC was launched.

The plan is currently being considered by the D.C. Council.