PeaceHealth employees say changes to hospital’s health insurance limiting access to care
Amid contract bargaining and talks of a possible strike among PeaceHealth St. Joseph Medical Center employees, many continue to express concern after they say the hospital — Whatcom County’s largest employer — internalized much of its employee health insurance plan, effectively limiting the local health care options for employees and their families while also significantly increasing out-of-pocket costs for patients.
The employees and their union claim the hospital is more or less forcing its employees to seek health care from within PeaceHealth by creating its own self-insured plan and limiting care options for employees outside of the hospital’s facilities by charging higher costs for visits to specialist doctors and pharmacies outside of its network.
“It’s deplorable that a Catholic-based hospital with a mission statement of ‘We carry on the healing mission of Jesus Christ by promoting personal and community health, relieving pain and suffering, and treating each person in a loving and caring way’ is treating their own employees this way,” PeaceHealth Labor and Delivery Nurse Kristin Malmo told The Bellingham Herald.
PeaceHealth employees are able to choose between three tiers of insurance coverage offered by the hospital. Tier I and Tier II plans are considered to be in-network, with Tier 1 offering care “within the PeaceHealth ecosystem,” according to benefit guide documents.
Tier I: In-Network
▪ Patients can access health care within PeaceHealth facilities and by its employed providers, as well as within the organization’s other partner providers. This option costs the least out-of-pocket.
Tier II: In-Network
▪ This option aligns more with the location where patients live. For those living in Whatcom County or nearby, they are covered by the Aetna PPO network, excluding coverage by Family Care Network (FCN).
Tier III: Out-of-Network
▪ Tier III providers are not contracted and are out-of-network.
Although it appears more affordable, employees say the Tier I plan isn’t adequate because local PeaceHealth facilities do not provide sufficient access to the range of care that patients are seeking. Employees told The Herald everything from receiving anesthesia at PeaceHealth to accessing a pharmacy nearby is unavailable under the Tier 1 plan.
Many specialty-care doctors simply do not exist through the hospital, and those that do have wait lists of six months or longer, if they are accepting new patients at all, employees said. This means some patients are having to decide whether to drive hundreds of miles to seek proper care under the Tier I plan or pay higher prices to get the same care locally, employees told The Herald.
Employees said that one patient whose child receives reoccurring infusions at a local clinic to treat an autoimmune disease would no longer receive coverage for the treatments locally. To get the treatments covered by PeaceHealth’s insurance plan at a reasonable cost, the employee would instead have to travel with their child to Eugene, Oregon, where the closest in-network clinic is located.
Employees say the Tier II plan also comes with its challenges. PeaceHealth employees told The Herald of numerous accounts of premiums going up this year, prescription drugs increasing in cost or no longer being covered at all, and co-pays increasing by up to 240% for some services.
Family Care Network (FCN), the largest primary care physician (PCP) network in Whatcom County, is excluded from coverage under the Tier II plan, something employees say has forced many of them to decide whether to give up years-long relationships with their local physicians to instead seek primary care directly through PeaceHealth.
“They had a relationship with that provider,” said PeaceHealth Labor and Delivery Nurse Jen Hampton. “They knew who they were. They went and saw them every year. Now, we’re down 100 primary care providers that we have access to, and PeaceHealth simply doesn’t have enough.”
PeaceHealth employees told The Herald that the hospital lacks enough PCPs to see all of these new patients in a timely fashion, and they sometimes offer ZoomCare or visits to PeaceHealth Urgent Care as alternatives.
“For many non-emergent issues like medication adjustments, or follow-up to previous problems, this does not make sense and does not suffice,” Malmo told The Herald.
Robin Cully works in patient care support services at the hospital and has been at PeaceHealth for eight years. He is currently a co-chair for the local Washington State Nurses Association union. Cully told The Herald the insurance changes prevented him from continuing to see his longstanding providers. So, he transitioned to his wife’s health care plan to maintain his access to care.
“It just feels really weird to work for the largest health care provider in the county and get better medical insurance by saying, ‘No, I can’t take yours,’” Cully said.
Employees say they are frustrated the insurance changes weren’t part of a bargaining process, as their contract with the hospital states substantial insurance changes should be. Employees told The Herald that PeaceHealth has claimed the changes were not substantial enough to warrant bargaining.
The employees say they want their health insurance restored to “a more usable, cost-effective plan.” At a minimum, they are asking PeaceHealth to offset insurance costs to employees if the hospital is increasing profits by internalizing its health care plans, something PeaceHealth has also told them is not feasible, according to employees.
In response to specific questions from The Herald about the changes to PeaceHealth’s insurance plans, increasing costs, access to care and whether the hospital would bargain for any of the changes, the nonprofit health care organization responded with the following statement:
“PeaceHealth is committed to supporting our caregivers with medical and pharmacy plans that provide access to whole-person care. Our plans are also flexible enough to accommodate the unique needs and provider network options available in the varied communities where PeaceHealth caregivers live. We chose to partner with Northwest-based Moda Health to administer the PeaceHealth medical and pharmacy plans. As a local, established partner who values a personalized experience, Moda Health will provide caregivers with specialty navigation support and access to clinical programs that caregivers can use to maintain and improve their health. Across the country, the cost of health care continues to rise. For 2025, PeaceHealth plan costs are also experiencing increases, which vary by plan. While a portion of these costs are paid by caregivers through payroll deductions, to keep our plans as affordable as possible PeaceHealth continues to pay approximately 89% of the total cost for full-time caregivers and 80% for part-time caregivers. Included in the multiple choices caregivers have for health plans is a non-cost option. Additionally, through our Care Navigation hotline, caregivers receive priority scheduling and help determining available care options. For all our caregivers, we are committed to providing competitive compensation and benefits, safe and respectful working conditions.”
This story was originally published April 9, 2025 at 5:00 AM.
