States Taking Lead on Healthcare By Nicky Riordan

States Taking Lead on Healthcare By Nicky Riordan

In light of national uncertainty and marketplace decline in some areas of the country, many state legislatures, from the most progressive to majority conservative, are working to move the conversation forward. States like California, Nevada, and Alaska are flirting with unique approaches to solve statewide health care concerns and putting Washington on notice for a failure to act. Although the respective plans face their own uphill battles on both the local and federal level, the idea that states should begin to consider individual solutions to statewide healthcare concerns is an important one, and may provide the foundation for more thoughtful national debates on the issue.

Last week, the California Senate passed SB 562, an audacious proposal to adopt a statewide single-payer healthcare system. If passed, the new system would cover all Californians regardless of immigration status, eliminate premiums and deductibles, and replace all forms of private insurance in the state. The bill raised eyebrows after a fiscal analysis projected annual costs of up to $400 billion per year for the plan, about double the entire current state budget; but the adoption of a single-payer healthcare system would be a monumental achievement for California progressives, and could provide critical motivation and proof of concept for national Democratic leaders.

The road ahead for the bill, however, is steep. Even if approved by the Assembly, the Governor, and the people of California, implementation of the plan would require a waiver from the Trump Administration to allow the state to redirect current federal funding into the new system. Republicans are unlikely to agree to eliminate private insurance in the sixth largest economy in the world..

Another interesting measure that passed last week but attracted much less attention is a proposal in Nevada to create a statewide Medicaid buy-in option. The Nevada bill made it one step further than the California proposal: all the way to the Governor’s desk and, if signed, would make Nevada the first state to provide the opportunity for all residents to buy into the program regardless of income.

Under the current iteration of the bill, people could use tax credits earned under the Affordable Care Act (ACA) or their own money to buy Medicaid coverage in lieu of private plans on the statewide marketplace. A national public option was debated at length during the debate leading up to passage of the ACA, but this idea has never garnered majority support on a federal level.

A unilateral move by a centrist state like Nevada may provide the room other states facing empty marketplaces need to ensure residents are covered. Much like California, however, the state may need federal permission to expand Medicaid, which the administration proposed to cut drastically in the near future. Proponents of the bill hope that the allure of innovation and national attention may push it past the finish line.

On the conservative side, Alaska already successfully pulled its marketplace back from the brink and is looking to secure a long term solution for the fourth most expensive state in the country when it comes to health care. Insurance providers in Alaska faced a common problem in rural states: an inability to find enough low cost patients to offset those with more expensive health care needs.

With only one insurance provider left, the Republican legislature took action last year to balance the costs of these patients by imposing a tax on insurers to create a “reinsurance fund” to stabilize the markets. Losses for the last insurer on the marketplace dropped by $18 million and increased consumer premiums by 7.3 percent instead of the projected 40 percent in 2017. The tax was a short-term deal, however, and the state has applied for a five-year federal waiver to redirect the funding allocated for annual premium subsidies under the ACA to the reinsurance program.          

As Congress continues to debate over a workable repeal and replace bill and insurers ramp up their concerns about the Trump Administration’s rhetoric, states are beginning to realize that they may need to take the lead on this conversation. Regardless of what the Senate puts together, CBO reports confirm that dismantling or watering down the ACA will have dire effects on large portions of the country.

While conservative and swing rural states need to find a way to mitigate the damage, progressive states are looking to capitalize on this moment to move the conversation to the left. Many of this state legislation relies on the willingness of the administration to approve the proposals, but if the Republican Congress is unable to compromise on a new national system, the pressure to act may become too great to ignore. 

 

Nicky Riordan, Political Analyst, Utica College Center of Public Affairs and Election Research

 

 

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