Colorado Gov. John Hickenlooper on Thursday established himself as a national policymaker by unveiling a bipartisan healthcare plan he co-authored with Republican Ohio Gov. John Kasich.
The seven-page plan included:
- Immediate federal action to stabilize markets.
- An active federal/state partnership.
- Responsible reforms that preserve coverage gains and control costs.
- Leave in place the individual mandate to buy insurance or pay a fine until Congress can devise a “credible replacement.”
- Continue to fund cost-sharing reduction subsidies to insurers, which were created by the Affordable Care Act to help lower-income workers afford insurance.
- Implement a $15 billion state stability fund modeled off a program in Alaska that helped ease the price of monthly premiums. But the plan does not mention funding for such a program.
- Help for counties underserved by insurers.
The full blueprint is available here.
“We want to look at every option for cost control,” Hickenlooper said in the West Foyer of the state Capitol Thursday morning during a well-attended news conference to unveil the proposal.
The plan presented by Hickenlooper Thursday is in reaction to Republicans’ failed attempts to repeal and replace Obamacare last month. Leaders, including Colorado Sens. Michael Bennet, a Democrat, and Cory Gardner, a Republican, have called for a bipartisan effort in the wake.
Hickenlooper said he and Kasich had to set aside personal preferences for a common solution.
“Is this going to fix all that’s wrong in our healthcare system?” Hickenlooper said. “No. Clearly that’s not going to happen, but this is a taking a big bite out of a very large problem.”
The plan focuses solely on the individual market, and makes no mention of the controversial subject of Medicaid. Even with avoiding the thorny issue of Medicaid, the letter received the support of just six other governors beyond Kasich and Hickenlooper.
“We as governors have pledged to work with our congressional leaders to ensure that the cost is not shifted to states, and that resources and care for our most vulnerable are protected,” Alaska Gov Bill Walker, a Republican who became an independent in 2014, said in a statement.
The other governors were Louisiana’s John Bel Edwards, a Democrat; Montana’s Steve Bullock, a Democrat; Nevada’s Brian Sandoval, a Republican; Pennsylvania’s Tom Wolf, a Democrat; and Virginia’s Terry McAuliffe, a Democrat and former chairman of the Democratic National Committee.
Hickenlooper said there wasn’t time to include every state leader’s ideas.
“I think time is of the essence,” Hickenlooper said. “We need to move forward on this and have concrete proposals. We talked to a number of other Republican governors and staffs, and many of the principles they’re supportive of.”
State Sen. Jim Smallwood, R-Parker, who has a background in insurance brokerage, said one reason other governors may not have signed the letter is because it ignores meatier subjects.
“I’m a little disappointed we didn’t start the conversation with Medicaid in a state where it’s roughly a third of our budget, with roughly a quarter of Coloradans on what was designed as a medical welfare program,” Smallwood said.
Smallwood said the plan does not tackle the employer mandate, which requires that employers with more than 50 workers provide health insurance or face penalties.
He said the governor should have consulted state Republicans on the plan. Smallwood serves as chairman of the Senate Health and Human Services Committee.
“It would have been great to have us in the room for at least a discussion,” Smallwood said.
U.S. Rep. Mike Coffman, R-Aurora, was holding a separate news conference Thursday in the Colorado Capitol unrelated to health reform. He said the Hickenlooper-Kasich proposal resembles principles set forth by a bipartisan group of lawmakers in Congress called the Problem Solvers Caucus. He’s a member.
Hickenlooper will testify next week before Congress on health reform and said he also hopes to meet with the Problem Solvers.
Coffman rejected the U.S. House health reform effort to undo major portions of the Affordable Care Act.
“It seems consistent with the principles that we agreed to that I signed onto in Problem Solvers,” Coffman said of the Hickenlooper-Kasich proposal. “Part of the problem is too much of it is in Washington right now and not enough of it is in the state. I want to see more control shifted to the states.”
But Coffman also said the Medicaid issue needs to be addressed for meaningful reform to move forward. He has proposed a 50/50 split of Medicaid expansion costs between the federal government and the state.
Coffman also supports Medicaid block grants, in which states would receive a lump sum from the federal government and then manage programs themselves. The congressman also would like to see a work requirement, where people on Medicaid would be required to hold a job, or seek one.
Jesse Mallory, the state director for Americans for Prosperity and the former chief of staff for the state legislature’s Senate Republicans, said the two governors’ plan stumbled out of the gate because it called for the continuation of the individual mandate.
“Rather than exploring ways to allow the market to be more competitive, his plan calls for more government intervention which we already know drives up costs,” Mallory said. “This is the wrong solution.”
But Ian Silverii, executive director of ProgressNow Colorado, said the problem with focusing on the state level is state Republicans need to be willing to compromise. Silverii said that is not possible while the conservative Koch brothers influence the state legislature through groups such as Americans for Prosperity.
“It’s great when guys like John Kasich, who don’t owe the Koch brothers anything, decide to stand up and do the right thing for the people of this state,” Silverii said. “The problem is we have a state Senate that is wholly bought and paid for by the Koch brothers and have no interest in doing anything that they don’t direct them to do, and they are in the repeal Obamacare, don’t fix Obamacare camp.”
Hickenlooper said he hopes partisans in Washington are watching.
“I’m not in Congress and I understand that this is their job,” Hickenlooper told reporters at the Capitol. “But I think they’re going to hear from their voters, Republicans and Democrats saying, ‘Hey, it is about time, at least on this issue, we lay down our weapons as Republicans and Democrats and sit down at a table and try to come up with conclusions and solutions.”
Lt. Gov. Donna Lynne, a former Kaiser Permanente executive, watched a few feet to Hickenlooper’s left. She is considering a run for governor to succeed Hickenlooper, who will leave office because of term limits after next year.
Hickenlooper and Kasich noted the “United States Chamber of Commerce have identified this as an urgent necessity,” and that the Congressional Budget Office says defunding the payments could drive up premiums by up to 25 percent and actually increase the federal deficit by as much as $194 million over the next decade.
“Also, Congress should put to rest any uncertainty about the future of CSR payments by explicitly appropriating federal funding for these payments at least through 2019,” the Hickenlooper-Kasich plan states. “This guarantee would protect the assistance working Americans need to afford their insurance, give carriers the confidence they need to stay in the market, increase competition, and create more options for consumers. Because the cost of this initiative is already included in the budget baseline, the appropriation would not have budget consequences.”
Hickenlooper on Thursday acknowledged one of the major problems with the Affordable Care Act: younger people are buying in, leaving older, sicker more costly customers for insurers to cover.
“The calculus for many young people is they say, ‘We’re not going to do it, we’re not going to get in this,” Hickenlooper said. “We’re trying to place an emphasis on driving down the premium cost for them and making sure there are some other consequences should they get sick and make sure they’re aware of those. They say you can take a horse to water but you can’t make them drink, right? Well, we can take young people and show them how important it is to get health insurance, but it’s difficult, it’s absolutely difficult.”
Unlike Congressional Republicans’ attempts at health care reform earlier this year, the bipartisan plan released Thursday largely worked within the framework of the nation’s existing health law, the Affordable Care Act, otherwise known as Obamacare.
“This was all about tinkering with soft spots in the ACA, not replacing it with something from the left or the right,” said Joe Hanel, a spokesman for the Colorado Health Institute, which analyzes legislative proposals, but does not take positions on them. “This is working within in current law, and making those mechanisms work.”
The plan affects only a fraction of Americans, because it only targets the individual market. That includes people without employer or government-based health insurance.
Left ignored were concerns that the health law’s subsidies do not help enough in the middle class – creating a key barrier to affordability for many purchasing their own insurance on state and national exchanges. The tax credits, which offset the cost of monthly premiums, are available to people earning up to four times the federal poverty limit. Some experts, however, say that bar is too low.
The plan also made no mention of recommendations for tamping down the rising costs of medical services and prescription drugs, which continue to outpace inflation. And it included only vague aspirations for moving the nation’s health system away from a fee-for-service model, to one that bases prices on the quality and value of a patients’ care.
“It’s a Band-Aid on part of the Affordable Care Act – a good Band-Aid, but it’s still just fairly small in scope,” Hanel said.
The proposal calls for fixing the “family glitch,” which made it more difficult for some families who can’t afford their employers’ insurance to get federal subsidies on an exchange. And it called for streamlining the wavier process for states seeking more flexibility in how they oversee their insurance markets.
Several of the governors’ ideas are untested, Hanel said, including allowing people in counties with only exchange-based insurer to buy into the Federal Employee Benefit Program.
“It’s probably the best first step that the country could make, but even the governors will admit that this is not a long term solution for what’s ailing the health care system,” Hanel said.
Adam Fox, of the Colorado Consumer Health Initiative, was “very encouraged” by the proposals, but said some areas still needed work.
He hailed the governors’ insistence on funding certain subsidies that tamp down out-of-pocket costs for low-income Americans, such as co-pays and deductibles. But he said the governors should have pushed for them to become permanent, rather than merely be funded through 2019.
“Two years is bare minimum to really help insurers feel like that funding is going to be there,” Fox said.
The payments have become a political bargaining chip, with Trump repeatedly threatening to end them, despite warnings from insurers that doing so would destabilize the individual market.
Still, Fox urged lawmakers in Washington D.C. to take the governors’ proposals seriously.
“It is a little bit of perhaps an uphill battle,” Fox said. “But I think realistically, this is what kind of policies our Congress should be looking at if they want to ensure coverage and affordability right now.”
(Editor’s note: This story was updated several times during the governor’s speech and after.)