Healthcare is one of the most heavily regulated industries in the country. While complex, the current layers of state and federal regulations act as a safeguard to protect patients, preserve access to care, and help control costs.
Regulations also serve to maintain stability across the market. For example, the Washington Office of the Insurance Commissioner (OIC) requires health plans to maintain financial reserves. This is money set aside to respond to crises, ensure plans can pay claims when the unexpected happens, and invest in new solutions to better serve members and customers. Reserves are reviewed annually by the OIC as part of the rate-setting process to ensure they are sufficient to protect a health plan’s membership.
A path paved with risk
Proposed legislation is threatening this safety net. Bills under consideration in the coming legislative session could require Washington’s miscellaneous nonprofit health plans, such as Premera Blue Cross, to remit a portion of their financial reserves to the state.
As a miscellaneous nonprofit health plan:
- Premera operates to serve our members and communities rather than to generate financial returns for stockholders or investors.
- Any operating profit is reinvested in the company to improve technology, service, and innovations for customers and members.
- Premera does not receive any financial benefits from the state and pays the same taxes and fees as any for-profit entity. In 2025 alone, Premera paid more than $76 million in Washington state taxes that directly contributed to the state’s general fund.
But unlike vertically integrated, for-profit health plans, Washington’s nonprofit health plans have one source of capital from which to draw. They cannot raise funds through stock sales or private investments. These surplus reserves have been built over decades of strong financial stewardship and cover anything from the cost of a new drug or new program to a natural disaster or pandemic.
The costs are clear
Insurance premiums must reflect the total cost of doing business. This means legislation that taxes the reserves of Washington’s nonprofit health plans would result in higher costs for individuals and employers purchasing coverage.
Exempting national for-profit insurers would weaken the financial stability of Washington-based nonprofit health carriers while setting them at a distinct competitive disadvantage. The result of legislation like this would shift resources out of Washington communities and toward out-of-state companies.
Reducing reserves would also limit the ability of local nonprofit plans to reinvest in the communities we serve. For more than 90 years in Washington and before statehood in Alaska, strong reserves have enabled us to support our communities when they needed it most, including:
- Advancing $100 million to hospitals and clinics, providing $65 million in premium relief to customers, and waiving cost shares during the COVID-19 pandemic.
- Investing more than $100 million into communities and organizations across Washington and Alaska to support rural health, expand behavioral health care capacity, and bolster the healthcare workforce pipeline.
- Collaborating with Kinwell Medical Group to establish a network of 16 clinics across Washington, created in response to the state’s acute primary care shortage.
No other health plan has made similar investments in the communities we serve. While we share the state’s goals of improving affordability and stability, this proposed legislation would have unintended consequences and add unnecessary risk to Washington’s healthcare system.