After months of legislative wrangling by Congressional Republicans to replace President Barack Obama’s health law, a bipartisan group of governors are trying something different:
Tinker with what’s already in place.
A plan released Thursday by Democratic Gov. John Hickenlooper and Ohio’s Republican Gov. John Kasich largely works within the framework of the nation’s existing health law, the Affordable Care Act.
Over and over, health experts used the same words to describe the proposed changes: “Incremental” and “pragmatic.”
“It’s a Band-Aid on part of the Affordable Care Act,” said Joe Hanel, a spokesman for the Colorado Health Institute, which analyzes legislative proposals. “A good Band-Aid, but it’s still just fairly small in scope.”
Health care policy experts largely offered guarded applause for the proposals – calling them long-overdue for a law that has gone without tweaks since its passage in 2009, unlike other major pieces of legislation.
And it quickly garnered praise from the Colorado Association of Health Plans and the Colorado Hospital Association.
The announcement comes as insurers across the nation seek more steep price hikes for 2018 – including 27 percent on average in Colorado – despite signs of market stability earlier this year. The uncertainty over Obamacare’s future has been a key reason for those requested rate increases, insurance executives and regulators say.
And it comes amid threats by President Donald Trump to end funding to a key subsidy program, which could spike rates up another 20 to 25 percent.
Thursday’s plan would affect only a fraction of Americans, because it only targets the individual market. That includes people without employer or government-based health insurance – roughly 7 percent of the nation’s population, according to the Kaiser Family Foundation.
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 waiver process for states seeking more flexibility in how they oversee their insurance markets. As of July, only one state had been granted such a waiver, a Kaiser Family Foundation review shows.
Several of the governors’ ideas are untested, Hanel said, including allowing people in counties with only one exchange-based insurer to buy into the Federal Employee Benefit Program. Slightly more than a dozen Colorado counties would likely be affected.
And other proposals are unfunded, such as a call to implement a nationwide $15 billion state stability fund modeled off a program in Alaska that has helped ease the price of monthly premiums.
Already, Colorado insurance officials appear to be mulling the creation of such a fund, as are several other states, experts said.
Few ideas were new. And some provisions – such as extra payments to insurers with higher-cost enrollees – were previously part of the Affordable Care Act, but have since ended.
“Many of us have argued for years those changes need to be made,” said Bill Lindsay, who owns a consulting firm and recently served as chairman of the Colorado Commission on Affordable Health Care. “It’s very positive in that if it can get movement, maybe it can break the logjam.”
Left ignored, however, were concerns by experts that the health law’s tax credits 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 program, which offsets the cost of monthly premiums, is available to people earning up to four times the federal poverty limit. Some, however, say that bar is too low.
The plan also made no specific 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.
That came as little surprise to Lindsay.
“That is a much bigger, much more complicated deal,” he said. “And you’re not going to do that in three weeks.”
Still, allowing states greater freedom to experiment may offer clues on how to fix those deeper issues, experts said. And the governors’ suggestion to include the massive Medicare program in some states’ experiments could hasten that change, Adam Atherly, professor at University of Colorado Anschutz Medical Campus said.
“Most of it’s pretty incremental,” Atherly said. “Although, again, if you read what they’re proposing, it’s a lot of setting the stage for future reform.”
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 President Donald 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.”