States Look at Establishing Their Own Health Insurance Mandates
At least nine states are considering their own versions of a requirement that residents must have health insurance, a move that could accelerate a divide between Democratic states trying to shore up the Affordable Care Act and Republican states intent on tearing it down.
Congressional Republicans in December repealed the so-called individual mandate, a pillar of the ACA, as part of their tax overhaul. That cheered conservatives who say people shouldn’t be forced to buy insurance, but it has now energized liberals who say a mandate is needed to ensure coverage and keep premiums low.
Maryland lawmakers are pursuing a plan to replace the ACA mandate, which requires most people to pay a penalty if they don’t have coverage. California, Connecticut, Hawaii, Minnesota, New Jersey, Rhode Island, Vermont and Washington, as well as the District of Columbia, are publicly considering similar ideas.
This push illustrates a shift in the health-care battle from Capitol Hill to the states, igniting a surge of activity that could redefine access and coverage for millions of consumers.
The ACA, also known also as Obamacare, sought to create a uniform minimum floor for health coverage. It established certain benefits that many health plans had to cover and barred insurers from charging higher premiums to people with pre-existing conditions.
Republicans in Congress failed to repeal the law overall, but in addition to erasing the individual mandate, the Trump administration has been using administrative actions to roll back the ACA’s requirements and give states more control.
That is creating a landscape in which blue states pursue initiatives to keep or expand the ACA, while red states take actions to defang the law and put a conservative stamp on health policy.
Coming years could see a growing gulf on issues such as Medicaid benefits, consumer protections, insurer regulations and the availability of cheaper, less-comprehensive health plans, health analysts say.
“The hodgepodge of congressional actions and administrative efforts have really shifted activity to the states on a whole range of health-care issues,” said
a senior vice president at the Kaiser Family Foundation. “We’re moving back to when coverage and consumer protections vary tremendously.”
The individual mandate is the latest example and one of the most symbolic. The national repeal takes effect in 2019, an event the nonpartisan Congressional Budget Office has estimated would result in millions of people dropping or losing coverage.
Republican-led states have welcomed its demise, saying the mandate imposes a financial burden on lower-income people and is a federal overreach.
Some states want to undo even more of the ACA. Idaho has moved to let insurers sell plans without all the benefits required under the ACA. Insurers would also be able to charge higher premiums to people who are sicker or older. It is unclear whether the Trump administration will take action to stop the state.
“This is why conservatives opposed Obamacare—we don’t like one-size-fits-all,” said
vice president for government affairs at the conservative Club for Growth. “We should let states duke it out. If Maryland or Vermont wants to impose heavy regulation on health care, by all means let them do it. I’d be willing to bet health-care costs and quality of care will be better in red states.”
The push carries some risk for Democrats, polls suggest, since the mandate is the least popular part of the ACA. About 45% of Democrats in September thought the national mandate should be kept and 20% supported repeal, according to a poll from the Urban Institute, an economic and social policy research group.
In addition, setting up a system to track individuals’ coverage, and possibly exact penalties through income taxes or other measures, would be a significant undertaking for states, health-policy experts said.
The notion of an individual insurance mandate was first floated in the 1980s by conservatives as a way to get healthy, younger people to buy coverage and offset the costs of older and sicker consumers.
Democrats initially objected. But since the early 2000s, they have embraced the concept and are considering ways to retain it, fearing that repeal would increase premiums and undermine the individual insurance market.
In Connecticut, lawmakers plan to introduce legislation that would impose a coverage mandate of some sort, said state Rep. Sean Scanlon, a Democrat who serves on a health-care working group.
“The federal government has just stalled. They don’t accomplish the basics, and that leaves states with a great opportunity to step up and craft policy,” Mr. Scanlon said.
Maryland lawmakers are set to consider imposing a penalty on people without insurance, and Rhode Island state officials are also discussing the option of retaining a mandate. A bill in Washington state would create a task force to examine an insurance coverage requirement. And Hawaii lawmakers are also examining retaining parts of the ACA, including a possible mandate.
Most of the discussions are still in the nascent stages, but the effect of what could be a patchwork insurance system is unclear. Insurers may be more likely to stay in the ACA exchanges of states with a mandate, because it gives them a more predictable mix of healthy and sick customers.
Similarly, older and sicker people may prefer states with a mandate and other insurance regulations, so it is possible blue states could attract more of them. But that depends on a host of factors, including whether a state expanded Medicaid, the percentage of residents who get health-related tax credits and a state’s potential moves to relax the ACA benefit requirements.
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