Variations in the way states have moved to implement the 2010 federal health-care law have taken on greater significance after last week’s Supreme Court hearings, whose tone heightened speculation that the statute would be overturned.
With the exception of Arizona, all of the states and the District of Columbia have amended their health insurance rules or practices to comply with mandates imposed by the law. Those mandates include the elimination of lifetime coverage limits and the requirement that many insurers allow parents to put adult children younger than 26 on their plans.
States used a range of methods that, at the time, amounted to little more than technical variations in approach. Now those distinctions could make all the difference.
Maryland, for instance, enacted a law that cites the federal statute by name and essentially says all of its provisions are now state law as well. This means that if the federal law is overturned, those provisions will be immediately null and void in Maryland as well.
Carolyn Quattrocki, executive director of Maryland Gov. Martin O’Malley’s Office of Health Care Reform, said state officials chose to simply reference the federal law because it seemed the easiest approach and would ensure that any tweaks to the federal law would automatically be reflected in state rules.
Avid backers of the federal law, O’Malley officials did not take into account the potential consequences of taking that route in the event the statute was overturned.
“We just weren’t thinking about the possibility,” Quattrocki said. “It just seemed so remote and absurd.”
By contrast, Virginia’s General Assembly adopted the full text of the federal provisions into state law. So those rules will remain on Virginia’s books — and binding on Virginia insurance plans — regardless of how the Supreme Court rules.
Still, there’s a wrinkle: Virginia lawmakers added a sunset provision specifying that the law will expire July 1, 2014.
Virginia Del. Thomas Davis Rust (Fairfax), a moderate Republican who sponsored the legislation, said he included the sunset provision because “everybody was concerned that if the federal law was overturned we would want to come back and take a look at this.”
“We chose July 1, 2014, because we thought the court case would be over by then one way or another,” he added.
South Dakota lawmakers went a step further, including what one state official dubbed a “suicide clause” that automatically repeals the state law if the entire federal law is found unconstitutional.
But the practical effect of this provision could be limited, at best. That’s because South Dakota’s director of insurance issued state regulations implementing the federal provisions. These remain in force unless and until they are specifically revoked by either the director or the legislature.
“There’s been so much variation in the state responses to the [federal law] that it’s difficult to tell what would happen if the law were struck down,” said Katie Keith, a professor at Georgetown University who co-authored a study of state actions in detail.
“We do know that many states have baked in at least the early market reforms in the law. But what’s less clear is what happens in states that have not fully baked them in. A lot would be left to state interpretation.”
The provisions most clearly at issue are insurance regulations in the federal law that have already taken effect.
Often referred to collectively by the law’s supporters as “the Patient’s Bill of Rights,” the provisions include not just the ban on lifetime limits and the extension of coverage to adult children. They also include a prohibition against excluding children with preexisting conditions, restrictions on annual coverage limits and requirements that insurers cover preventive services such as mammograms and colonoscopies without co-pays or deductibles.
Compared with the far-reaching changes the federal law will usher in beginning in 2014, the “bill of rights” provisions are fairly modest. But they are among the most popular in the law, and they have already affected the lives of millions of Americans.
Technically, states did not need to align their insurance regulations with the federal law. But if they did not, the federal government would have had to enforce the rules.
“I guess our feeling is that insurance should be regulated by the state, and this was one way of ensuring that continued,” said Randy Moses, assistant director for policy analysis and legislation in the South Dakota Division of Insurance.
Like many Republicans in Virginia — one of 27 states to challenge the health-care law in court — Rust is no fan of the statute. Still, if the law is struck down in its entirety, he is not sure he would advocate allowing the insurance provisions in Virginia’s law to expire with the sunset.
“I think most of them are pretty noncontroversial,” he said. “The insurance companies are already writing them into their policies. People are already paying for them in their policies. And I think they are pretty widely accepted at this point.”
Staff writer Lena H. Sun contributed to this report.