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Bill

SB 5638

Funding health care access by imposing an excise tax on the annual compensation paid to certain highly compensated hospital employees.

2025-2026 Regular Session Introduced by Bob Hasegawa and 2 co-sponsors

Washington would tax hospital executive compensation above a threshold to fund health care access, creating revenue from the health sector to support broader coverage goals.

By resolution, reintroduced and retained in present status.
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Bill Summary · SB 5638

Legislative bill overview

SB 5638 proposes an excise tax on annual compensation paid to highly compensated hospital employees in Washington State. The revenue generated would fund health care access initiatives. The bill targets executives and upper-level hospital staff earning above a specified threshold.

Why this is important

Health care access funding is a persistent challenge in Washington, and this bill attempts to create a new revenue stream from within the health care sector itself. The approach directly ties executive compensation levels to broader health care access goals, potentially reshaping how hospital leadership pay is viewed in policy discussions.

Potential points of contention

  • Defining "highly compensated": Disagreement likely over what compensation threshold triggers the tax and whether it captures intended targets without affecting mid-level management
  • Hospital cost impacts: Hospitals may argue the tax increases operational costs, potentially passed to patients through higher premiums or reduced services in certain areas
  • Competitive disadvantage: Concerns that Washington hospitals face disadvantage recruiting talent compared to out-of-state facilities not subject to similar taxes, or that executives relocate
  • Tax sufficiency and allocation: Questions about whether revenue projections are realistic and whether dedicated health care access spending actually reaches underserved populations

Compiled from official sources — confirm details with the bill’s official record.

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