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  WA State Medical Insurance              

    Robert S. Mori, CPA, President      7429 East Heather Way, Everett, WA  98203-542424

WA State Medical Insurance

The beginning of the first major medical insurance policies in 1949 was another milestone, and one that made a big difference in healthcare choices and delivery in WA state. The policies were characterized  by much higher benefit limits than before, and usually they were combined with a deductible and coinsurance.  This design made the coverage include catastrophic events and was comprehensive including outpatient services but also required patients to cover more of those bills up front.  These policies used a number of internal limits, consisting of varying deductibles or coinsurance provisions for selected services (e.g. mental health services) this had the dual effect of containing costs and affecting choices of service. 

Another catalyst in the acceptance of greater WA state group insurance benefits was another wage and price freeze that was instituted during the Korean War.  During the War, the Blue Shields and Blue Crosses of the world gave back some of their market share as the commercial medical insurance firms cherry picked the healthiest groups offering lower rates.  As a result, in order to compete, the Blues also used  health to distinguish groups in order to offer better rates to those groups who deserved it.  Through the 1950's more and more working age people were being covered by WA state employer group health insurance coverage. and  the benefits continued to get better and cover more procedures and needs.  Other developments during the 1950's were upward pressure on health insurance premiums and the costs of insuring the elderly was getting attention.

During the 1950s the issues surrounding health insurance for the retired became front and center. The first wave of retirements under the federal Social Security law began to appear.  During World War II, because the war effort required those 65 and older to stay in the workforce, during the 1950's many of those decided to call it quit and retire.  Social Security defined old age as 65 and so many people started retiring at that age.  Many firms had designed their retirement programs around the age of 65 and those workers who had by then got used to the idea of getting health insurance thru their place of employment found out all at once that they had no insurance.  At the same time, there weren't many WA state medical insurance companies willing to offer coverage that was  affordable. 

As the need became more pressing, some WA state medical insurance companies, afraid that the government was going to step in and put them out of business, partnered with  state-65 plans, where groups of states allowed medical insurance companies  to pool their resources on a nonprofit basis in to create an affordable marketplace for medical insurance for the elderly. Unfortunately, these partnerships were insufficient to provide for the growing need and the relative modest means that senior citizens had at the time.  Ultimately, of course, the federal government stepped in with the Medicare program in the mid 1960's.

Later in the  1960s and 1970s, WA state medical insurance benefits continued to become more comprehensive.  One of the major additions to the benefit mix was the substantial increase in mental health benefits, which had been completely neglected or very limited before.   As the benefits increased, costs went up as well.  The single biggest event of the decade was the enactment of the Medicare and Medicaid programs.  Medical  care prices  which already were rising faster than the general inflation rate, increased at a breakneck rate.  The combination of new technologies and patents in treatment and medicine along with the population's average age increasing added to the medical inflation rate.  Attitudes changed and more were viewing health care as a right rather than a privilege. Medicare and Medicaid programs were focused on helping seniors get the care they needed and not on keeping costs under control.    The government originally reimbursed hospitals and physicians the full cost of services rather than encouraging folks to get alternative, lower cost delivery systems like private physicians or other lower cost facilities.  By increasing the demand for expensive medical treatment through the use  of hospitals, and with a limited increase in supply of these facilities over the short run,  Prices had no where to go but up. In combination with the other inflationary factors listed here, the cost of WA state medical insurance  plans were ever increasing  at unsustainable rates and has not abated till even now.