Will Washington State's Experiment Work For The Nation?

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Now, while members of Congress are trying to figure out how to help the so-called working poor afford health insurance, one state has a plan that's been doing just that.

For two decades, Washington State has negotiated lower rates with insurance companies for those who can't afford the full premiums. And the U.S. Senate is now considering allowing all states to do the same.

Keith Seinfeld of member station KPLU in Seattle checked to see how it's working.

KEITH SEINFELD: You hear about small business owners, well, here's one that's tiny. It's at Seattle's Pike Place Market, where crafts and flowers and food all crowd into tight aisles. This is where you'll find Sharon Shaw(ph) in a booth the size of a cubicle.

Ms. SHARON SHAW: Okay. Just be real careful. It's all glass.

SEINFELD: She's selling kaleidoscopes made of stained glass.

Ms. SHAW: My husband is mostly the maker. I am mostly the seller.

SEINFELD: They've been at it for nearly 20 years.

Ms. SHAW: At the very beginning of this business, my husband and I were uninsured. We had a 1-year-old son.

SEINFELD: And that was very scary. She and Michael have never made enough to buy private health insurance after they put food on the table and paid the mortgage. So for the past 16 years, they've bought insurance through the state of Washington.

The program is called the Basic Health Plan. When you sign up, a state agency scrutinizes your earning. The program's designed for working adults with low incomes. In the case of the Shaw's family of four, that means under $44,000 a year. If you qualify, then you get brochures from private insurance plans.

Ms. SHAW: There's what's called open enrollment and it happens once a year. And you can switch or change.

SEINFELD: That's a lot like what you might experience through your employer, except every year, Shaw has to prove her income has stayed below the limit.

Ms. SHAW: Bank statements, W-2 forms, receipts of business expenses and so forth - it's a pretty involved process.

SEINFELD: Shaw says a lot of her fellow merchants at this market don't even bother to apply. It sounds like too much hassle. She says it's worth it.

Ms. SHAW: In the years past, I've actually had to close our business down because I know that we are capping our income. As crazy as that may seem, it's more important to us to have the health insurance than to have the extra thousand dollars that month.

SEINFELD: Currently, she pays $90 a month for herself and husband. That's gone up and down over the years. The state charges people on a sliding scale based on their ability to pay. And even the full price at 245 a month is cheaper than any comparable plan. That's because of the bargaining power of the state. The state's a tough negotiator on behalf of its clients, it has a limit on what it'll pay and only insurance plans that can meet the state's price can be offered.

Senator Maria Cantwell, a Democrat from Washington, is pushing for the final health care bill to include an option like her state's insurance program. She sees it as an alternative to the much debated public option.

Senator MARIA CANTWELL (Democrat, Washington): What we really want is to have the negotiated power. And if you can have that, you know, at the federal level, we're all for it. But if you're not going to have it at the federal level, at least let states have that clout because we've seen it work effectively.

SEINFELD: It's not clear if the version of the public insurance option that emerges from Congress will allow the federal government to negotiate with insurance plans, so giving states the power is a way of hedging their bets. Cantwell says it's a key part of cost control.

Already, more than a dozen states offer some sort of insurance subsidy for working adults. This would expand those programs. In Washington State, the program has enjoyed bipartisan support for most of its 20-year history, but the politics have been shifting. Republicans now say the current structure is broken and should not be extended nationally. The problem, they say, is the state has pushed rates too low.

State Senator Cheryl Pflug says the result is most insurance companies and doctors don't want to participate.

State Senator CHERYL PFLUG (Republican, Washington): Right now, what we're doing is we're setting up a two-tiered system in which the working poor and the poor really don't have good quality health care. The plan sounds good but nobody wants to see them.

SEINFELD: In fact, Sharon Shaw is in the process of changing her long-time family doctor because her insurance company decided not to participate next year. She's not happy about that but she'll accept it.

Ms. SHAW: Because I'm so grateful for the plan. It's like tell me the loops, tell me the hoops - I'll jump them. I'll do whatever it takes.

SEINFELD: Even if that includes paperwork and living with a smaller network of physicians.

For NPR News, I'm Keith Seinfeld in Seattle. Transcript provided by NPR, Copyright National Public Radio.