Forget Washington. Here’s How States Can Improve Health Care.

COMMENTARY Health Care Reform

Forget Washington. Here’s How States Can Improve Health Care.

Jan 17th, 2019 4 min read
Nina Owcharenko Schaefer

Senior Research Fellow, Health Policy

Nina Owcharenko Schaefer is well known as a champion of patient choice and robust competition in America’s health insurance markets.
In June, the administration finalized rules to broaden the ability for small businesses and self-employed individuals to join association health plans. FS Productions/Getty Images

Key Takeaways

Recent actions by Trump administration offer new relief and flexibility to the states on health care.

Leadership at the state level is critical to make these new opportunities work to bring down costs and increase choices.

States should also be prepared to push back on initiatives that give government more control over health care dollars and decisions.

The midterm election showed that anxiety over health care remains a top concern for American voters. But gridlock in Congress is likely to stall any real effort to solve these problems in Washington. That means the states have an opportunity to step in and take the lead.

This past year the Trump administration took several actions to provide relief from the rigid rules suppressing much-needed change.

Now it’s time for the states to seize their opportunity and ensure these actions translate to meaningful changes on the ground.     

In June, the administration finalized rules to broaden the ability for small businesses and self-employed individuals to join association health plans.

These health plans allow employers to band together as a group or an association, such as state or local chamber of commerce and small business associations, and offer health care to their employees. 

Expanding the definition of these associations means employers will have new ways to offer coverage to their employees.

The administration expects association health plans to offer more affordable options than currently available and points to estimates by the Congressional Budget Office that 4 million people would gain coverage under the association health plans—400,000 previously uninsured individuals would gain coverage under the plans as well as 3.6 million who would switch to such a plan.

In August, the administration finalized a rule to expand the availability of short-term, limited duration plans. These plans, which have been in existence for decades, offer individuals another option for health care coverage.

The Trump administration’s rule allows these plans to offer coverage for a year with the option of renewal. This restores and improves the long-standing rules that the Obama administration weakened.

The administration projects that enrollment in short-term, limited duration plans will increase by 600,000 people—100,000 previously uninsured and 500,000 shifting from existing arrangements to short-term plans.   

States should review their laws to make sure that they are consistent and compatible with both these administrative changes. They should also be on the lookout for and reject efforts to undermine the potential success of these options through additional layers of state rules and regulations. 

The Trump administration also released new guidance in November to provide states greater flexibility in applying for waivers under Section 1332 of the Affordable Care Act.

The State Relief and Empowerment Waivers give states the opportunity to propose alternative ways of providing quality and affordable health care coverage to their citizens.

The administration provided several model examples for the states to consider that promote private, consumer-driven health care; help those in need; and are fiscally sustainable.

While the State Relief and Empowerment Waivers focus on providing states with additional flexibility and relief from Obamacare, the administration has also encouraged states to request reforms to their Medicaid programsthrough the Section 1115 waiver demonstrations.

These waivers, which have been in existence since Medicaid’s enactment, offer states the ability to test new approaches to providing care for those in the Medicaid program.

Taking advantage of both these waivers should be a priority for the states. Some have already seized the opportunity, but many states have not and more can be done. Moreover, states should oppose initiatives to roll back or undermine efforts that bring much-needed reforms and changes to these programs.

States must also beware of continued efforts to push the health care system closer to a government-run, single-payer model. The “Medicare for All” movement is not just a federal effort, but targets states as well.

Several states have already contemplated testing a single-payer system of their own.

Other efforts—such as the Obamacare Medicaid expansion, Medicaid for All or Medicaid buy-in proposals, state-based public options, and global budgets—while not full-blown single-payer proposals, are strategic and lay the groundwork for an incremental approach.

States should reject these attempts to expand government’s role in health care.   

For the foreseeable future, it seems likely that Congress will not act in any meaningful way to address the problems that are plaguing the health care system.

However, governors and state legislators can provide much-needed leadership by taking advantage of the opportunities advanced by the administration and by sending a strong message to Congress that additional statutory flexibility is a better way forward.

Such an approach is already part of the president’s budget and has been furthered by national and state leaders who have rallied around a framework to do just that.

As liberals at the federal and state level double down on more government-controlled solutions, state leaders can offer a better approach.

Governors and state legislators need to lead the way in advancing reforms that lower costs, increase choice, and improve access in a way that puts patients, not the government, in control of dollars and decisions. There is no time to waste.

This piece originally appeared in The Daily Signal

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