March
9, 2018
As President Donald Trump and congressional Republicans
tirelessly try to dismantle the Affordable Care Act, a number of states are
scrambling to enact laws that safeguard its central provisions.
The GOP tax plan approved by Congress in the last days of 2017
repealed the ACA penalty for people who fail to carry health insurance, a
provision called the “individual mandate.” On Jan. 30, in Trump’s first State
of the Union address, he claimed victory in killing off this part of the health
law, saying Obamacare was effectively dead without it.
But before that federal action kicks in next year, some states
are enacting measures to preserve the effects of the mandate by creating their
own versions of it.
Maryland is on the cutting edge with legislation moving through
both chambers of the Statehouse.
“We’ve been just struggling since Trump became president with
how to protect the ACA in our state,” said Vincent DeMarco, president of the
Maryland Citizens’ Health Initiative, a nonprofit organization that has been
instrumental in pushing the measure.
Proposals have been discussed or advanced in at
least nine states,
including California, Washington and Connecticut, and
the District of Columbia.
Creating an individual mandate is just one way that states —
generally blue states where Democrats control the legislature — seek to ensure
what many lawmakers view as key advances made by the ACA don’t disappear.
They’re looking to one another as test cases to see how
state-level legislation can either buttress or alter the ACA, according to
Trish Riley, the executive director of the National Academy for State Health
Policy.
“One state will try one approach, others will try it,” Riley
said. “It’s an experiment, and an important one.”
Time is short, since most states have limited legislative
calendars and are fast approaching the deadlines for insurers to file their
2019 rate plans.
A bill to create a state-based individual mandate has not been
introduced in California, but the trade group that represents the state’s
health insurers is among those urging lawmakers to adopt one.
Without a mandate, more Californians would lose their coverage
and premiums could spike, said Charles Bacchi, president and CEO of
the California Association of Health
Plans.
“The requirement to buy coverage is the best method to stabilize
California’s health care marketplace,” he said.
But passing and implementing these kinds of measures will
be tough, said Sabrina Corlette, a research professor at Georgetown
University’s Health Policy Institute. “I think there’s still a window of
opportunity for states to do something and have an impact on 2019 premiums,” she
said.
Maryland’s Take On The Individual Mandate
Maryland’s effort began last April when the state
legislature created the
Maryland Health Insurance Coverage Protection Commission “both in response to
and in anticipation of efforts at the federal level to repeal and replace the
ACA,” according to a report by the
state’s legislative services department and the commission itself.
The commission, chartered for three years, is charged with
studying how federal action could affect the state’s health insurance market
and Medicaid program and offering recommendations to mitigate any negative
impacts. The panel began meeting months before the Maryland General Assembly
started its 90-day session in January.
Based on the commission’s initial recommendations, Sen. Brian
Feldman and House Del. Joseline Peña-Melnyk introduced the Protect Maryland Health Care Act of 2018,
which lays out a framework for preserving an individual mandate in the state.
The federal individual mandate was put in place to make sure
that younger, healthier people joined the insurance risk pool, helping to
stabilize the market. The idea is that those relatively healthy customers help
cover the insurers’ costs for sicker customers’ care, which keeps premium costs
manageable for everyone.
The Congressional Budget Office estimated that 13
million people nationwide would become uninsured without the individual
mandate. Some will choose to go without insurance or will not be able to find
an affordable plan. Insurers could opt to leave local markets because they
could not make money covering only sick patients.
Feldman said insurers and health care experts testified before
the commission that Maryland’s insurance exchange would collapse in 2019 if the
state didn’t act.
“Because of uncertainty at the federal level, it’s going to be
up to states in this arena to pick up the slack and to enact legislation that
responds to that uncertainty,” he said.
The federal mandate imposed a tax penalty on people who could
afford to but chose not to buy insurance, depositing the money in a general
Treasury fund.
In Maryland, the penalty fee will effectively be used, according
to advocates, as a “down payment” on an insurance policy.
Beginning in 2020, if someone indicates on their taxes that
they’re uninsured, the state would use the fine, plus any tax credits from the
federal government, to buy an insurance plan for them.
Maryland would match its residents only with plans that cost
nothing more than the fine plus the federal subsidy. So, if such a plan isn’t
available in a person’s area, the state will hold on to the money in an
interest-bearing account until the next open enrollment season. Then, the
person has another chance to buy insurance. If at this time they don’t purchase
a plan, the state will deposit the money into an insurance stabilization fund.
Politics And Policy On The Ground
Maryland is fertile ground for such health care experiments. The
ACA remains popular within the state.
Polling commissioned by DeMarco’s group puts the law’s support
at 62 percent.
In addition, about 52 percent of Marylanders favored a
state-based individual mandate, to make up for the federal provision that was
repealed.
Democrats control the general assembly, but Gov. Larry Hogan, a
Republican, has not offered a specific position on the issue — rather, he
alluded to health reform efforts in his State of the State address. “Let’s develop
bipartisan solutions to stabilize [health insurance] rates,” he said.
Ed Haislmaier, a senior research fellow at the Heritage
Foundation, expressed skepticism about whether this approach will make a
difference. The people who are targeted, he argued, are younger, healthier and
generally lower-income. They don’t have insurance because they don’t want it,
he suggested.
Jason Levitis, a senior fellow at Yale Law School’s Solomon
Center for Health Law and Policy who has been instrumental in helping states
craft their own versions of the individual mandate, warned that
Maryland’s approach could face administrative challenges.
States that follow an approach more closely modeled after the
federal mandate, he said, will have an easier time implementing it because
regulators have already had five years of experience enforcing it.
Still, Levitis praised the Maryland plan: “There’s something
attractive about the idea there, that you put this money … towards coverage.”
And a sampling of state proposals highlight a common theme.
“All the mandate efforts are based on the federal one,” Levitis
said. “The variations are what you put on top, [how states] individually keep
track of the money people pay and use it for health care services.”
He pointed to Connecticut as an example. It has two bills
pending in its legislature — one that closely mirrors the federal mandate, but
with slightly lower fines, and another in which
the fines would be deposited into health savings accounts for the individuals.
In New Jersey, a Senate panel advanced a two-bill
approach this week that would collect a fee from residents who opt against
buying health insurance. These fines would then be used to help pay the health
care claims of people who are catastrophically ill.
In the District of Columbia, a health care working group recommended an individual mandate nearly
identical to the federal one. The plan would require City Council and
congressional approval to become law.
Washington state has convened a group to study how
to enforce a mandate.
Meanwhile, Maryland officials also hope to learn from the
experiences of other states.
For instance, lawmakers in Maryland are considering the creation
of a state-based, basic, low-cost health plan as well as a fund to help
insurers cope with the burden of very high-cost patients.
These efforts also come from the work of the commission.
Stan Dorn, a senior fellow with the pro-Obamacare group Families
USA, said Maryland “had the foresight to see threats coming and to try to be
proactive about it.”
California
Healthline senior editor and columnist Emily Bazar contributed to this
report.
This
story was produced by Kaiser Health
News, an editorially independent program of the Kaiser Family Foundation.
Rachel Bluth: rbluth@kff.org, @RachelHBluth
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