Although 26 states oppose sections of the Patient Protection and Affordable Care Act, a new report suggests that a majority are taking steps to implement it – no matter what the Supreme Court decides. The Commonwealth Fund study looked at provisions of the law that went into effect in 2010, specifically the so-called “patient’s bill of rights.” The law gave states a choice on those matters — they could regulate insurance companies or opt out and let the federal government step in. According to the report, every state but Arizona has taken some steps to establish its own system. The “bill of rights” contains 10 provisions, including rules that insurers cannot retroactively drop coverage when a customer becomes ill, as well as one that allows parents of young adults to keep their children on their insurance policies. Ten states have acted on all of the provisions. Twelve have passed laws or written final regulations. Yet others have reviewed insurance policy forms providing unofficial guidance to insurers. “States are responding to the federal law in pragmatic ways that suit their political culture and regulatory needs,” according to the report.
Rhode Island, Maryland and Oregon led the pack in implementing the ACA. In fact, those states were working to expand health coverage well before the law was passed. If the ACA is overturned by the Supreme Court, these states — and others supportive of the law’s goals – will keep pursuing reforms. “What I hear is, they still intend to proceed,” says John Holahan, director of the Health Policy Research Center at The Urban Institute.
One provision of the ACA is that states must set up public insurance exchanges where uninsured residents can shop for coverage. So far, 16 states and the District of Columbia already have passed legislation enabling implementation of the law, or have governors who have issued executive orders to move forward. New York was the most recent when Governor Andrew Cuomo bypassed Republican lawmakers who were holding up the state’s effort to create a state insurance exchange by issuing an executive order to proceed. Another 20 states either have legislation pending or have received some federal grant money to move forward. The remaining 15 states have made little or no progress.
Two-thirds of the states will have viable exchanges up and running by 2013, according to Sam Gibbs, president of the Exchange Technology Group at eHealth Inc., which runs an online insurance marketplace and is bidding to help build state-level exchanges. According to the law, the federal government will operate exchanges in states that don’t start them on their own. That could be difficult to achieve in states that are hostile to the ACA, because implementation requires close cooperation with state government and insurance regulators.
The exchanges will be the entry portal for individuals and families who are currently uninsured. They will be eligible for a federal insurance subsidy in cases where family income is less than 400 percent of the federally defined poverty level. The size of the subsidy is based on a sliding scale to hold costs as a share of income between two and 9.5 percent. States also are required to offer dedicated exchanges for small businesses that would let employers provide a subsidy for employee coverage. Lower-income families will be eligible for Medicaid under a dramatic federally-financed expansion. Between the exchanges and Medicaid expansion, coverage will be extended to 23 million uninsured Americans by 2019, according to the Congressional Budget Office.
If the Supreme Court declares the individual mandate unconstitutional and doesn’t touch the rest of the ACA, insurance companies are certain to push Congress for a remedy sometime after the November elections. This would ensure that enough healthy young people sign up for insurance to balance the ACA’s requirement that carriers accept all applicants and don’t charge high-cost premiums based on age or health risk. A Government Accountability Office study identified nine alternatives to the individual mandate; for example, setting strict open-enrollment windows with harsh financial penalties for failing to enroll. That tactic works for Medicare, which charges senior citizens a 10 percent annual lifetime Part B surcharge for each year of delayed enrollment.
Congressional action on a fix would depend on who controls the next Congress — but the recent track record isn’t encouraging. “Since the two parties don’t speak to one another, the odds of a federal fix aren’t very good,” Holahan said.
Writing for Think Progress, Igor Volsky says that “Indeed, it seems that the law has already created an unstoppable momentum towards change and it’s very unlikely that they will take away these new benefits or obtain efforts to modernize their operations (in an effort to reduce spending). Regardless of the Supreme Court’s anticipated ruling on the law in late June, the changes the ACA inspired are here to stay — in one form or another.”
Tags: Commonwealth Fund, Congress, Congressional Budget Office, eHealth Inc., Government Accountability Office, Health Policy Research Center at The Urban Institute, Individual mandate, insurance exchanges, Medicaid, November elections, Patient Protection and Affordable Care Act, Patient’s Bill of Rights, Supreme Court