States Go Their Own Way in Response to ACA Uncertainty

With the extended battle over health care reform far from resolved, some states are beginning to make long-term plans of their own, and the most recent examples of state actions show the divergent directions states are taking. One health insurance analyst says plans should prepare for this pattern to continue.

Republican Idaho Gov. Butch Otter signed an executive order Jan. 5 that will allow health plans in that state to offer products that don’t meet Affordable Care Act (ACA) benefit requirements, in an effort to lower premiums.

“We have been waiting patiently while Congress has been unable to find a solution and Idaho families have been forced to buy products that are too expensive and loaded with benefits they don’t want or need,” Otter said in a Jan. 5 statement. “Now the door is open for states to pursue our own reasonable solutions. We believe Idaho will lead the way in states taking back control of their insurance markets.”

Idaho Insurance Director Dean Cameron said he hopes the new insurance plans from Idaho carriers will be available as early as March to reduce costs for essential health care coverage by 30% to 50%.

By contrast, this week two Democrat state lawmakers in Maryland — Sen. Brian Feldman and Del. Joseline Peña-Melnyk — said they plan to propose a bill this year to contradict the Republican effort to repeal the individual mandate, The Washington Post reported. The bill would charge a fee to residents who do not buy insurance and use that money “as a ‘down payment’ to enroll them in coverage from the state’s health care exchange,” according to the Post.

Justin Giovannelli, an associate research professor and project director at the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute, tells AIS Health that these two recent state actions “are broadly related.”

“States are responding to federal changes and the uncertainty from the administration’s tax bill, which has serious implications for health care,” Giovannelli says. But obviously, he says, states will have different approaches.

“States have been in a difficult position this past year,” he says. They currently have “somewhat more clarity” now, compared to what they had this time last year, “but there continues to be the prospect for large changes, so some states are forging ahead, taking the steps that they think are right for their markets.”

Giovannelli says there is also a lot of uncertainty around the Trump administration’s decision to broaden the ability of small employers and individuals to join association health plans. Consumer protections will also likely be a hot spot for this, as some states will take action to make sure their constituents are protected with minimal benefits, while others won’t.

The ACA’s Section 1332 State Innovation Waivers will also bring some insight as the year unfolds. “This is going to be a potentially interesting year, to see what states do with the innovation waiver program,” he says. “By and large, we have seen states use waivers to support state reinsurance programs. A couple of states are seeking much broader changes, but it’s unclear how the administration will react to them.”

Giovannelli says, “It’s also interesting to note,” that Idaho is also pursuing a 1332 waiver that is looking at ways to broadly increase coverage for the Medicaid expansion gap, potentially through tax credits for beneficiaries. It’s unclear how the state is planning to accomplish this, so far. But both the executive order and Idaho’s 1332 waiver “are worth keeping a close eye on,” he says.

“What’s brewing in Maryland deserves to be monitored,” as well, because more states might follow suit, Giovannelli says. “In general, I would expect to see the states that have embraced the ACA trying to protect their marketplaces.”

by Diana Manos

Adapted from the 1/15/18 issue of AIS’s Health Plan Week