States could keep their federally funded insurance exchange with consumer protections intact under a proposal unveiled by two Republican Senators, according to Kaiser Health News (KHN). Bill Cassidy (R-Louisiana) and Susan Collins (R-Maine) said their proposed legislation would allow states that embraced the Patient Protection and Affordable Care Act (PPACA) to keep operating under many of the current federal rules.
Another option is for states to pursue a less-regulated alternative to the PPACA under the Patient Freedom Act. Or they could reject federal dollars completely in favor of a new state solution for health coverage.
“We give states the option,” Cassidy said at a press conference. “California and New York—you love Obamacare; you can keep it.”
Some PPACA supporters say the Cassidy–Collins proposal, one of several in the GOP-controlled Congress, could represent a lifeline for states, such as California, that have invested heavily in expanding coverage under the act. But many Democrats at the state and national level criticized the plan as potentially harmful to millions of Americans who rely on the PPACA because it does not promise sufficient funding and consumer protections.
California implemented the PPACA by expanding Medicaid coverage to millions of low-income people and creating its own insurance exchange, which ultimately covered 1.3 million enrollees. Supporters have held California up as proof that the controversial health care act can work as intended—and as a counterpoint to Republican contentions that Obamacare is collapsing nationally.
The state went beyond what other exchanges did. It chose to actively negotiate rates with insurers and didn’t allow every company to sell in its marketplace. It also simplified consumer shopping by requiring insurers to have standard copays and deductibles for each level of coverage.
Those moves pushed health insurers to compete more directly on price, and annual rate increases were a modest 4% during the first two years. Covered California’s rates are rising 13.2%, on average, this year. Still, that’s better than the 22% average rate hike in exchanges nationwide, according to the KHN article.
Cassidy said his legislation promotes the Republican doctrine of states’ rights while avoiding the one-size-fits-all approach from Washington.
Collins echoed that sentiment, saying she favors letting states that had success with the health act maintain the status quo. She described it as “reimplementation of the [PP]ACA” in those states.
Cassidy and Collins acknowledged that details of their bill haven’t been worked out, nor is it clear how it will mesh with other proposals. Competing plans in Congress don’t envision these state options, and it’s unclear what approach President Trump and his administration will take in crafting a replacement plan.
Some key state lawmakers are skeptical. “I’ll be surprised if it really happens,” said state Senator Ed Hernandez (D-West Covina), chairman of the Senate Health Committee. “This is just one of many proposals.”
State Senator Richard Pan (D-Sacramento), a pediatrician and former Assembly Health Committee chairman, said he was relieved to hear of a Republican proposal that backs federal subsidies, but was concerned about the potential loss of funding at current levels. “It looks good on the surface” Pan said, but it’s important “to look at the details.”
Pan also said, however, that the bill could further the fragmentation of the health care system if some states keep the PPACA while others do not.
Federal funding is a key issue for states. A summary of the bill posted by Collins said that states choosing to retain the PPACA or pick the Republican alternative could receive “funding equal to 95% of federal premium tax credits and cost-sharing subsidies, as well as the federal match for Medicaid expansion.”
Republicans will need 60 votes in the Senate to pass a full replacement for the PPACA. At his press briefing, Cassidy said his compromise approach is designed to win over some Democrats and reach that 60-vote majority.
Source: Kaiser Health News; January 24, 2017.