As bureaucrats in Trenton scramble to set the mandate in motion, New Jersey’s decisions are at the forefront of a nascent movement with states stepping out on their own to counteract Washington’s efforts to erode the ACA.
New Jersey’s insurance provision and a similar one that the D.C. Council adopted last week are timed to begin in January, when a federal penalty is scheduled to disappear for Americans who violate the mandate built into the health-care law. A requirement that Vermont just approved is supposed to take effect in 2020, once officials settle on its specifics.
Several states are erecting barriers against rules the Trump administration is writing to promote short-term health plans that are comparatively inexpensive because they lack benefits and consumer protections guaranteed by the ACA. And some states, led by Democrats and Republicans alike, are trying to slow insurance rate increases through methods that Congress considered but did not pass.
“There are all these federal changes that are happening, and some states are pushing back on them and some states are taking advantage of them,” said Jason Levitis, a consultant who led the development of the ACA’s tax components at the Treasury Department during the Obama administration. “The most important and interesting health policy action is in states.”
Taken together, the moves mean the nation is starting to revert to the insurance landscape of a decade ago — a hodgepodge that created the political pressures that culminated in the sweeping 2010 law. At the time, Americans’ ability to find and afford decent health plans, especially if they could not get one through a job, depended on where they lived and whether they were healthy or sick.
“The ACA was about standardizing, and now we are going back to more divergence,” said Heather Howard, a lecturer at Princeton University’s Woodrow Wilson School of Public and International Affairs. “It is much more of a patchwork quilt.”
The latest wave of state-by-state decisions is a sequel of sorts to a process that the Supreme Court unleashed in 2012. The justices ruled, 5 to 4, that the law was constitutional but that each state could decide whether to embrace its expansion of Medicaid, the public insurance program for the poor, to include residents with slightly higher incomes. Thirty-four states have expanded their programs since then, most recently Virginia, and three more are considering the idea.
The high court did not give states latitude on any of the law’s other elements. But action — as well as inaction — by the Trump administration and the GOP-led Congress is starting to have that effect.
New federal rules allow states to require low-income residents to work or prepare for jobs to qualify for Medicaid. The Department of Health and Human Services has signed off on four states’ proposals, though a federal judge just blocked Kentucky’s plan, the first, from starting on Sunday.
And several states are asking for federal permission to create “reinsurance” funds, or pools of money that help protect insurers from the risk of covering customers who need high-cost medical services. This approach, intended to help stabilize fragile ACA insurance marketplaces, was part of the law early on. Senate GOP moderates tried and failed to re-create such a fund last year.
States with Democratic governors, including Minnesota and Oregon, have embraced reinsurance funds, as has Wisconsin, where Gov. Scott Walker (R) an outspoken conservative and ACA foe, is boasting about the idea in campaign ads as he runs for a third term.
The Maryland General Assembly just passed legislation calling for a reinsurance program. That measure and another launching a study of a possible state insurance mandate emerged from the Maryland Health Insurance Coverage Protection Commission, created last year to try to blunt what the Trump administration was starting to do to the federal law.
Other states are acting in anticipation of HHS rules that would make it easier for consumers to buy skimpy health plans originally meant for a brief coverage gap, such as when people are between jobs. These short-term plans can go further than other coverage in deviating from ACA insurance protections, charging more to people with preexisting medical conditions or refusing to sell them insurance. The Obama administration restricted the plans to three months; Trump administration officials want to extend them to just under a year.
In Maryland, however, a new law will hold the plans to three months. California’s legislature is considering the same limitation.
Colorado is not restricting such plans but is trying to teach consumers about them so “people make sure they understand what they are purchasing,” said Michael Conway, the state’s interim insurance commissioner. “They often look very appealing to people” because premiums can be low, Lee said. But the coverage may not include mental health services, prescription drugs or care for preexisting medical conditions.
Among the states’ various steps, the boldest are the ones replacing the ACA insurance mandate with their own. Until now, only Massachusetts has had a requirement that residents have health insurance as part of 2006 changes that foreshadowed much of the federal law four years later.
The D.C. Council passed its requirement among measures related to the city’s next budget. At a hearing this spring, Council member Vincent C. Gray (D-Ward 7), a former mayor who leads the health committee, blasted the “complete assault on the Affordable Care Act” since President Trump took office. “But establishing an individual mandate here in the city will ensure that people will continue to have insurance,” Gray said.
New Jersey’s Health Insurance Market Preservation Act, which Murphy signed into law this spring, will affect more people than any other state’s insurance provision. In the months before it takes effect, the governor’s aides are racing to conduct actuarial studies of how much it will cost to carry out and how much the state is likely to collect in penalties, which, like the District’s, will be identical to the federal penalty soon going away.
The mandate is part of a broad effort by Murphy to reverse a recent slump in ACA coverage — paralleling a nationwide dip the past two years — as the Trump administration shortened the annual sign-up period and slashed federal aid for advertising and organizations that help people enroll.
According to New Jersey Health Commissioner Shereef Elnahal, “It is imperative that we do everything we can to not only protect the . . . population that we have insured with this law, but to encourage even more people to sign up.”
Peter Jamison contributed to this report.