Health care reform takes a step in the right direction

Between the Senate’s impeachment hearings and the chaos surrounding the Democrats’ results from the Iowa caucuses, there’s been little room to hear about much else happening in Washington and across the states. Of course, this is to be expected during a presidential election year, but the drowning-out effect often leaves Americans sifting through a sea of rhetoric to determine what political agendas best align with their own. And when it comes to priorities, voters have expressed strong opinions about the issues they hope candidates will tackle — polls show that health care reform remains top-of-mind for folks nationwide.

A Kaiser Health News round-up of recent polls demonstrates that health care continues to be a leading concern for voters. One poll, for example, found that as much as three-fourths of voters are “concerned about being able to afford health care.” This comes on the heels of a Hill-HarrisX poll conducted at the close of 2019 in which voters named health care as their primary concern, topping other hot-button issues such as national security, immigration, the economy and the environment.  

Many people across the country are increasingly concerned about the access, quality and affordability of health care. So why do certain policymakers and opinion leaders insist that the Affordable Care Act (ACA) remain intact and vow to fight efforts to reimagine our health care marketplaces through reform at the state and federal levels? 

Recently, the Centers for Medicare and Medicaid Services unveiled a new option for states seeking a waiver from certain constraints outlined in the ACA: the Healthy Adult Opportunity (HAO) program. Under it, states can apply for a grant, at a predetermined level, on behalf of the healthy adults who are in the expanded populations for Medicaid benefits. The program seeks to remove some of the federal restrictions that can tie the hands of state policymakers, limit innovation and drive up costs. 

This is good for expansion states, such as Michigan, already contending with the ACA’s scheduled reduction in the federal match rate this year, which will take the 100 percent reimbursement rate down to 90 percent. These states also must acknowledge the ballooning costs of Medicaid, which the Congressional Budget Office recently estimated will increase by almost 80 percent over the next 10 years, without expanding eligibility or benefits.

The newly announced HAO program reflects the Trump administration’s agenda to diffuse federal control over health care programs and markets from Washington back into the states. The logic of the effort is that giving states more flexibility allows policymakers to innovate and incubate more efficient, customized methods of meeting the needs of their own people. Here are four takeaways that voters and state lawmakers should know about this new policy:

• States that pursue the grant for healthy adult enrollees still will be required to cover all essential health benefits mandated by the ACA.
• States can use enhanced premiums and cost-sharing models. As Chris Pope of the Manhattan Institute notes, states will be able to stretch resources and help mitigate the fiscal cliff that appears at 138 percent of the federal poverty level, when Medicaid eligibility cuts off.
• When states are allowed to retain the savings that result, they can reinvest these dollars into the program and shore up the safety net for the most vulnerable, while also exploring additional services to address mounting mental and emotional health needs.
• States can renegotiate pharmaceutical formularies and reimbursement models for managed care that are based on quality patient outcomes, not the number of services provided.

These changes, admittedly, are limited in scope and will not have a widespread impact. They mark a small, imperfect and symbolic step. But it’s all in the right direction, away from increased federal control over health care and toward state-based opportunities to innovate for lower cost, higher quality care. As voters and state policymakers think about the future, we can and should press into efforts such as the HAO program to imagine what health care coverage can look like if we use fresh new ways, with more flexibility for policymakers and patients.

Lindsay Killen is the vice president for strategic outreach and communications at the Mackinac Center for Public Policy, a research and educational institute located in Midland, Mich. Follow her on Twitter @LindsayMBKillen.