Law or no law, some states adopt healthcare reform

CHICAGO Tue Apr 17, 2012 10:13am EDT

Related Topics

CHICAGO (Reuters) - If the Supreme Court overturns President Obama's health care reform law in June, Americans without health coverage may get some relief anyway - especially if they live in Rhode Island, Maryland or Oregon.

These states are at the head of the pack in implementing the Affordable Care Act (ACA), and they were working to expand health coverage well before the law was passed. If the ACA is thrown out by the high 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.

Under the Affordable Care Act (ACA), job one for the states is to establish a public insurance exchange where uninsured residents would shop for coverage. The good news is that 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 state became the latest last week when Governor Andrew Cuomo decided to bypass Republican lawmakers who were holding up the state's effort to build New York's 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 are on track to have viable exchanges in place by 2013, according to Sam Gibbs, president of the Exchange Technology Group at eHealth Inc., which operates a national online insurance marketplace and is bidding to help build many of the new state-level exchanges.

Under the ACA, the federal government would launch and operate exchanges in states that don't build them on their own. But that could be difficult to achieve in states with political climates hostile to the ACA, since implementation requires close coordination with state government and insurance regulators.

The exchanges will be the entry portal for all uninsured individuals and families. Under ACA, they'll be eligible for a federal insurance subsidy in cases where family income is less than 400 percent of the federally defined poverty level - currently $92,000 for a family of four. For this group, the amount of subsidy is based on a sliding scale to hold costs as a share of income between 2 and 9.5 percent.

States also are required to offer a specialized exchange for small businesses that would enable employers to provide a subsidy for employee coverage. And lower-income families will be eligible for Medicaid under a dramatic federally-financed expansion of the program.

All told, the exchanges and Medicaid expansion will extend coverage to 23 million uninsured Americans by 2019, according to the Congressional Budget Office.

The slow progress on implementation could be setting the stage for a very frenetic scramble in 2013 - depending on how the Supreme Court rules in June and the outcome of the November elections. That's because the ACA requires that the Department of Health and Human Services certify the exchanges by January 2013; the exchanges must go live in October of that year so that consumers can start shopping for policies and enroll for coverage that would start in early 2014.

If the high court strikes down the law's requirement for individuals to have minimal health insurance -- the so called individual mandate -- but leaves the rest of the ACA intact, insurance companies likely would push Congress for a remedy sometime after the November elections. Their goal would be to 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 excessively differential premiums based on age or health risk.

A Government Accountability Office study last year identified nine possible alternatives to the individual mandate; for example, setting strict open-enrollment windows with stiff financial penalties for failing to enroll. That approach works well for Medicare, which penalizes seniors with a stiff 10 percent annual lifetime Part B surcharge for every year of delayed enrollment.

Congressional action on a fix would depend on which political party controls Congress next year - 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," says Holahan.

If Congress doesn't act, states that have made major investments in implementing the law could enact individual mandates on their own, or adopt other rules aimed at encouraging enrollment.

But if the entire law is struck down, even supportive states will have difficulty making progress, since the exchanges would be hobbled without the important federal subsidies for individual policies and Medicaid. For example, the Massachusetts plan passed by Gov. Mitt Romney has achieved nearly-universal coverage, but about half of the system's funding is provided by the federal government through Medicaid waivers.

How would consumers fare in red states? "There would be a lot of soul-searching at that point," says Alan Weil, executive director of the National Academy for State Health Policy. "Even the states that have opposed the health reform law have been concerned about their growing numbers of uninsured residents."

Ironically, the states that have resisted ACA reforms most strenuously are the same ones that stand to gain the largest improvement in coverage under the law. Urban Institute researchers found that these states have higher average uninsured rates due to stingier Medicaid coverage and lower percentages of employers offering insurance to their workers.

Under the ACA, these states - including Texas, Florida, Louisiana, Alaska, Arkansas, Oklahoma, South Carolina and Georgia - would see their percentage of residents without health insurance cut by half or more due primarily to expansions in Medicaid and premium subsidies.

(The writer is a Reuters columnist. The opinions expressed are his own.)

(Editing by Linda Stern and Andrew Hay)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see
Comments (8)
explorer08 wrote:
I could have used reform 10 years ago. since 2002 my monthly health insurance premium has nanoopled (increased by a factor of 9!!!!)

Apr 17, 2012 9:54pm EDT  --  Report as abuse
kiwibird wrote:
Most countries health care is paid for from taxes. What is wrong with the U.S. that you seem to be the only developed country that does not offer this. A very backward system you have.

Apr 21, 2012 4:28pm EDT  --  Report as abuse
mauiwelch wrote:

Americans are not just becoming uninsured; they are staying that way.  26% of Americans aged 16 to 64 had no health insurance for part of 2011.

Nearly 50 million Americans had no health insurance in 2010. 

1 out of 4 have no health insurance.

2 out of 3 will develop either; cancer, diabetes, or heart disease.

The odds are that many Americans will by affected by a chronic disease while they are uninsured.  I have read horror stories regarding families that have literally lost everything as a result of medical bills and the inability to work.

If I was uninsured, avoiding a chronic disease would be at the forefront of my priority list; not that it isn’t for the insured as well.  Having a stroke or diabetes can be extremely detrimental to your ability to maintain employment; not  to mention the costs associated with the disease.

A gentleman that works in my building recently expressed to me that he could barely afford the diabetes medicine he is taking.  He is obese and takes at a minimum of ten different drugs.  However, he absolutely refuses to change his diet and vehemently defends his meat, as his right as an American.

By adopting a diet that has a very high degree of success in decreasing your chances of contracting a chronic disease you are in essence providing yourself with an Insurance Plan. 

The groundbreaking book, The China Study, authored by Dr. T. Colin Campbell, reveals what can be described as a startling, yet wholly intuitive, relationship between nutrition and disease. Dr. Campbell found that a whole-foods, plant-based diet can not only lower your risk for certain diseases, it can reverse their progression.

The 20-year China Study allowed Campbell to test and compare laboratory findings against a participating human population. Across China, over 100 villages participated – and the findings were consistent: a high consumption of animal-based foods is associated with more chronic disease, while those eating primarily a plant-based diet were the healthiest.

The key of this nutritional dietary overhaul: avoiding meat, dairy and processed foods and oil of any kind.

Being uninsured is a terrible situation to be in but there are steps that can reduce your chances of being in a catastrophic situation.

A great movie outlining this scenario is; Fat, Sick & Nearly Dead.  If you have a chance watch it.  It outlines a very simple process to “reboot” your health.

Apr 21, 2012 7:05pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

How to get out of debt

Financial adviser Eric Brotman offers strategies for cutting debt from student loans and elder care -- and how to avoid money woes in the first place.  Video