Many states are eager to reverse the damage from Obamacare in 2018, but in some cases, they will need help from Congress, leading health care experts say.
“A lot of states would like to act in 2018, but there is a lot of uncertainty while they are waiting on Congress and the administration,” Grace-Marie Turner, president of the Galen Institute, a free-market health care advocacy group, told The Daily Signal.
In 39 states where the federal government administers health exchanges, health insurance premiums increased an average of 105 percent between 2013 to 2017. Meanwhile, about 70 percent of U.S. counties have only one or two health insurers.
The following are six ways the states and/or the federal government could push for change or reforms in the year ahead.
1. State innovation waivers
Under Section 1332 of the 2010 Affordable Care Act (aka Obamacare), the federal government can grant “state innovation waivers” from the law for up to 11 statutory requirements.
Among the requirements, the waivers must provide as complete coverage to as many people as under the Obamacare law and can’t add to the federal deficit.
However, in 2015, the Obama administration placed strict “guardrails” on the innovation waivers, which have made it difficult for states to apply.
The Trump administration pledged maximum flexibility for states, but hasn’t fully delivered on that, said Naomi Lopez Bauman, director of health care policy at the Goldwater Institute, an Arizona-based conservative think tank.
So far, the Department of Health and Human Services hasn’t changed the strict guidelines for state waivers as was anticipated, she said.
“What HHS has messaged is not what we’re seeing,” Bauman told The Daily Signal. “Obama’s guidance in 2015 was very strict, and there has not been a lot of innovation. Changing the guidance is not a big lift for any new administration, but we haven’t seen it.”
Arizona will be applying for an innovation waiver at the end of the year, Bauman said.
This year, HHS approved waivers for Alaska, Minnesota, and Oregon. However, HHS rejected a waiver application from Massachusetts, while Iowa and Oklahoma dropped their requests.
“It’s better if Congress can amend Section 1332, but the administration can rewrite the regulations, which the Obama administration made so strict,” Turner said.
2. Revive Graham-Cassidy
More federal block grants to states for health care would also provide a boost, similar to the failed proposal by Republican Sens. Lindsey Graham of South Carolina and Bill Cassidy of Louisiana, Turner said.
“Congressional action will take threading the needle in the reconciliation process,” Turner said. “Block grants to states are needed as much as possible, similar to Graham-Cassidy, but with refinements. Graham-Cassidy was very hurriedly thrown together.”
The Graham-Cassidy bill was initially a last-ditch effort at repealing and replacing Obamacare. However, after the tax reform bill passed, ending the individual mandate to buy health insurance, Graham said there will be more urgency for a fix.
“I think we’re all going to say that we ripped the heart out of Obamacare with the individual mandate,” Graham said. “It’s pretty hard to rip the heart out of it and not replace it.”
3. Direct primary care
Direct primary care allows doctors to be paid directly, rather than through health insurance plans. The idea is to offer doctors and patients the choice to avoid a cumbersome claims process, which could be less costly for the health care provider, who would then charge lower fees.
“Direct primary care would provide more options,” Turner said. “It was originally something for the wealthy. Doctors are bringing it to the middle class. It’s access to primary care, without running it through insurance, for a relatively low monthly fee.”
That could promote competition and is increasingly important for states that could use it to reduce Medicaid costs, said Robert Moffit, a senior fellow in health policy at The Heritage Foundation.
It could be used under Medicaid waivers, also known as Section 1115 waivers, which existed before Obamacare was passed.
“Most people on Medicaid are in the acute care populations, relatively young and healthy, mostly low-income women and children,” Moffit told The Daily Signal. “What they really need is direct access to physicians. Direct primary care could actually improve their situation.”
4. Medicaid work requirements
Seema Verma, head of the Centers for Medicare and Medicaid Services, recently announced that the agency will allow states to experiment with work and community involvement requirements for able-bodies recipients of Medicaid, a federal state health program for the poor.
Such experiments could be worthwhile, Nina Owcharenko Schaefer, senior research fellow for health policy at The Heritage Foundation, told The Daily Signal.
“By definition, a demonstration is about testing new ideas and new approaches, but this would be optional for states,” she said. “It will be interesting to see how plans vary. The idea of a demonstration is to see what does and doesn’t work, and if it is successful, to consider changing policy.”
Schaefer added, “However, such demonstrations do not replace the need for more fundamental reform of the Medicaid program.”
CMS granted a Section 1115 waiver to Kentucky for a work requirement, and is considering waivers from the states of Arizona, Arkansas, Indiana, Kansas, Maine, New Hampshire, North Carolina, Utah, and Wisconsin.
More states could follow, said Rea S. Hederman Jr., vice president of policy at the Ohio-based Buckeye Institute.
“The Trump administration should give states more flexibility with Medicaid,” Hederman told The Daily Signal. “One way to do that would be work requirements for Medicaid for able-bodied adults. Medicaid expansion encouraged people to leave the labor force.”
5. Telemedicine to cut costs
States are showing a strong interest in telemedicine, said Moffit, also the chairman of the Maryland Health Care Commission, a state government body that makes recommendations to the governor.
“States are very interested in promoting telemedicine to improve access for people in rural areas for specialized care,” Moffit said.
He said demonstrations to the Maryland commission showed both improved outcomes and lower costs.
Telemedicine uses online technology to help administer medical care and puts patients in contact with a doctor through telecommunications.
The Department of Veterans Affairs rolled out a major model to promote telemedicine this past summer for VA patients.
6. Regulations for new hospitals
During the administration of President Gerald Ford in the mid-1970s, a federal law went into effect to withhold federal dollars from states that didn’t adopt “certificate-of-need” laws that require builders of health care facilities to prove to regulators that the community needed the planned services.
By the mid-1980s, Congress repealed the requirement and 15 states dumped the laws.
However, most states still have what critics call an anti-competitive law in place that drives up the cost of health care.
“States should review and reform the certificate-of-needs laws for permission to expand medical facilities,” Moffit said. “About 35 states right now require certificates of need for construction of hospitals or the expansion of medical facilities. It’s really long past time for state officials to reform this.”