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Devin Boerm on March 23, 2011 - 1:13pm
One year ago today, President Obama signed the Patient Protection and Affordable Care Act into law – and the focus of attention immediately turned to the states.
Now, one year later, as millions of women, seniors, children, and small businesses are seeing benefits from provisions in the law that have already taken effect, it is even more clear that the states are the venues where the future shape of the law will be decided.
Despite months of mostly symbolic attempts at nullification and repeal, and political rhetoric emanating from insurance industry-funded interests on the right, a bipartisan understanding has emerged in almost every state that the Affordable Care Act is indeed the law of the land, and that implementation of the law – specifically the state-based exchange – is essential.
The law already helps ensure the economic security of states and small businesses and the health security of millions of families. But for states with progressive legislatures, the opportunity to implement effective exchanges is also a chance to prove that pragmatic progressive ideas work, even including ideas like a state-based public option or single payer system. Even in states without progressive leadership, there is a chance to prove that lawmakers of good faith on both sides of the aisle have their constituents’ interests in mind by moving forward on exchange legislation that ensures the health security of families.
In states across the nation this week, progressive legislators and advocates are commemorating the anniversary of the Affordable Care Act, highlighting the many benefits it already provides, and pointing the way forward on the critical work that needs to be done now in order to ensure health security for our families in the coming decades. Progressive States Network has helped compile a national, state by state calendar of these events.
Click through on the articles below to read more analysis of where we are now and the where we are headed on health care in the states.
Progressive States Network and the Working Group of State Legislators for Health Reform continue to build momentum in the states for progressive reforms that protect consumers while providing families with affordable, quality health insurance options.To join the vocal and growing number of state legislators in the Health Care Working Group, contact Devin Boerm at 212-680-3116 x102 or firstname.lastname@example.org. For information on model legislation for strong state exchanges, read our analysis and recommendations underscoring the necessity of setting up a transparent and accountable governance and board structure. Finally, our 2011 Blueprint for Economic Security page on Health Security includes useful messaging and resources for legislators and advocates alike.
Where We Are Now: The Affordable Care Act’s First Year
As the health care reform law turns one year old this week, millions of Americans can take the opportunity to reflect on how the law has already increased their own families’ health security. From young adults to seniors, the Affordable Care Act in its first year has provided piece of mind for many different groups that had previously been vulnerable to the economic insecurity stemming from lack of coverage or insurance industry abuses. The Affordable Care Act is already making a significant positive impact on the health security of children, seniors, women, young adults, and small businesses. All have benefited from the exceedingly popular, desperately needed, and long awaited reforms enacted in the past 12 months:
Shielding Seniors From High Drug Costs: Before the Affordable Care Act, many seniors found themselves forced to choose between refilling their prescriptions and buying food, thanks to a regressive provision in Medicare’s prescription drug program. Called the “donut hole,” it put an estimated 4 million seniors at risk due to lack of prescription drug coverage. The enactment of the ACA remedied this problem with a rebate to defray the costs of seniors who found themselves in the “donut hole,” and provided them with a 50 percent discount on the purchase of prescription drugs covered under Medicaid plans. One year after the ACA was signed into law, 4 million more seniors can now afford to both pay for life-saving drugs and put food on their table.
Protecting Our Children: Last September, a provision of the new law took effect making it illegal for children under the age of 19 to be denied coverage due to a pre-existing condition. Many states have stepped in by putting additional state laws on the books barring insurers from circumventing the federal law by not offering child-only plans. Additionally, as part of the law, the federal government has committed to expanding Medicaid ensuring that many more low-income and uninsured children and women are protected.
Providing Economic Security to Young Adults: Young adults now have new options available to them, allowing them to stay insured rather than go without health care coverage. College graduates starting with the class of 2011 are now allowed to stay on their parents’ plans if they are not eligible for coverage through an employer. It is estimated that as many as 1.2 million previously uninsured young adults will be eligible for coverage. In addition, if young adults who purchase their own plans and make under $43,000 a year can receive tax credits to limit the amount of premium costs to under 6.3 percent of income.
Covering the Most Vulnerable: For the approximately 25 million Americans who are uninsured and have a pre-existing condition, expansion of the Pre-Existing Condition Insurance Plan (PCIP) provides new opportunities for coverage. Individuals who have been uninsured for at least six months and have a preexisting condition are eligible to enroll in either their state pool or the federally run PCIP if there is no state option. The number of individuals enrolled is expected to top 350,000 by 2014.
Ending Insurance Industry Abuses: Insurance companies now have new restrictions limiting their ability to take advantage of consumers. Companies are now prohibited from putting lifetime dollar amounts on essential benefits and cannot cap annual dollar limits for patient care on new plans. The practice of insurance companies canceling policies due to technical mistakes on an application is now illegal. Additionally, the Affordable Care Act requires that insurers put 85% of all premium costs for large employers and 80% for small businesses toward actual patient care instead of administrative or other costs, like bloated CEO salaries.
Supporting Our Small Businesses: Under the new law, small businesses are eligible for tax credits to help them provide insurance benefits to their workers. The first phase of this provision provides a credit worth up to 35 percent of the employer’s contribution to employees’ health insurance. Small non-profit organizations may receive up to a 25 percent credit. Up to $4 million is available through this program, benefiting small businesses as well as their employees who will now be covered.
Where The Fight Remains: The States
Because the language of the Affordable Care Act left so much surrounding implementation to the states, it is the states where the most significant legislative battles over health care have taken place over the past year – and it is the states where the future of health reform will be decided in the months and years ahead. The most pressing item on the agenda for states continues to be the implementation of competitive insurance marketplaces, or exchanges, which will open for business in 2014, but whose fate is being decided in state capitals across the nation right now.
Despite right-wing rhetoric, implementation of the exchanges is moving ahead in the vast majority of states, red and blue alike. As conflicts of interest are hammered out and real consumer-friendly coverage options are presented, the threat of the federal government coming in to run exchanges hangs over any state which does not implement one on its own. And despite the loud judicial and legislative noises being made about overturning or nullifying the law, momentum has continued towards implementation of the bill in 2011 sessions, as states continue to advance legislation. In fact, to date, only eight states – Florida, Alabama, Idaho, Kansas, Kentucky, Maine, Michigan, and Ohio – have not yet acted on either drafting an exchange bill or issuing authorizing language or an order to start the implementation process – and even in many of those states, movement on bills is underway. A full 49 out of the 50 states (including most recently Minnesota, and excluding only Alaska) have received federal grants to aid in designing exchanges.
States with progressive leadership such as Vermont, Connecticut, Washington, California, and Maryland have taken the lead by advancing legislation that moves them toward providing quality, affordable options to residents. California was a leader in passing a state exchange law barely after the inked dried on the Affordable Care Act. In Vermont, a single payer system is currently being proposed by the governor and debated in the legislature. Connecticut has brought its current public programs under the umbrella of Sustinet, which may include a public option. And legislatures in Washington and Maryland have robust exchange legislation very close to being put on their governors’ desks.
But even in states where conservatives hold levers of power, implementation of exchanges is garnering support from both sides of the aisle. Just this week, Colorado legislators announced an exchange bill – with cooperation from both sides of the aisle. Colorado’s bipartisan exchange would use the state’s $1 million federal start-up grant to build a nine-member panel to craft the exchange. While both sides of the aisle have worked diligently to find compromise, the role of the insurance industry has been a sticking point. The compromise bill allows for four of the nine panel members to be representatives from the insurance industry. Also represented are consumers and other businesses, all bound to conflict-of-interest rules. To encourage transparency, meetings of the panel would be open and information kept as part of the public record. (The National Academy for Social Insurance issued this toolkit for state policymakers on designing exchanges at the beginning of the 2011 legislative session.)
The lead negotiator for the exchange proposal, House Republican Leader Amy Stephens, stated that Colorado legislators would have taken up this issue irrespective of federal law and, according to the Associated Press, “insisted that exchanges are good for business, because they encourage competition and could make health insurance more affordable to small companies hit by unaffordable rises in insurance rates.” In addition to Colorado, the New Mexico legislature closed their session with exchange legislation that the governor has until April 8th to sign.
Other states illustrate the challenges of designing exchanges that will be able to withstand future political pressures. In recent years, Wisconsin and Maine have been leaders in the health care fight, and promised to provide progressive models for other states to follow under the Affordable Care Act. Wisconsin instituted its BadgerCare program to cover needy children and families, while Maine instituted a public program called DirigoChoice for several years that seemed to be a step towards to universal coverage. But after conservatives in both of these states took power this year, they immediately attempted to turn back the clock on covering those who need it most. These threats are the real life case for ensuring a strong board governance structure in exchange legislation – one that will keep political pressures from taking away consumer options for health coverage in the future.
One year in, the sheer number of states assuming that the exchanges will exist is proof that responsible legislators from both parties know both that repeal efforts will not work, and that the states are where the fate of the health law will play out. With conservative control of Congress, it is also the states that offer opportunities for progressives to institute effective models that can be replicated, state-by-state in the short term and possibly nationally in the long term, to provide consumer driven quality, affordable health security for all.
What We Are Up Against: Right-Wing Tactics to Derail Implementation
Despite the progress being made by responsible legislators on both sides of the aisle genuinely interested in the health security of their constituents, well-funded conservative groups continue to do their best to block implementation of Affordable Care Act at the state level. Some are up to their old tricks, while others are getting more creative. From the use of arcane legislative procedures to block exchange legislation from becoming law, to the interest among states to enter into interstate compacts, to the ongoing pursuit of litigation to foil efforts at health care reform, conservatives are relying on political chicanery to stop families and small businesses from benefiting from the law.
In North Carolina, conservative legislators tried, but ultimately failed, to override Governor Puedue’s veto of a nullification bill advanced by the American Legislative Exchange Council. Even after the Governor successfully vetoed this damaging bill, conservatives pushed through a procedural maneuver to block the veto. This maneuver, instigated by the majority leader, required him to switch his vote to the prevailing side in order to allow for a motion that the veto be reconsidered.
In Alabama, Republicans are using the “sovereign state” argument to argue that neither the federal nor the state government can enforce the individual mandate. A Senate Republican has introduced a bill that would allow voters to rewrite the state constitution, inserting the language: “a law or rule shall not compel, directly or indirectly, any person, employer or health care provider to participate in any health care system.” The bill passed the Senate and will now be moving to the House.
In Georgia, Tea Party supporters pressured Governor Deal not to sign exchange legislation headed to his desk. Caving to pressure, Deal shelved the bill and will either to let it die without a signature by July or push the legislature to pass another exchange measure before they adjourn April 29. With rules limiting the legislature from introducing another new exchange bill, it’s unlikely that another bill will pass. Meanwhile, conservatives in Georgia are following colleagues in other states and moving toward legislation to enforce an interstate compact.
An emerging trend being pushed by the American Legislative Exchange Council in conservative-controlled states, these interstate compacts are largely symbolic efforts to give states the power to regulate their own business and would move responsibility and authority for the regulation of health care from the federal government to the states – but would also have practical and negative effects. While compacts require ratification by Congress and a signature by the President, and will thus never be enacted, their passage by states may effectively mire hopes of a strong exchange in bureaucratic purgatory. By placing their health care hopes on an interstate compact doomed to fail, these states will almost surely be forced to have a federally run exchange and give up their ability to form state-run exchanges. Some support for interstate compacts has been seen among legislators in Missouri, Tennessee, Florida, Texas, Oklahoma, Montana, Wyoming. The effort so far has failed in North Dakota.
Compacts would be further disastrous for states because they would require the federal government to provide full funding to states, with full regulatory authority to strip away existing programs like Medicaid and other vital public programs.
The Bottom Line: Increasing Economic Security for States, Small Businesses, and Families
With health care costs a leading cause of economic insecurity, state legislators would do well by their constituents to pass strong state exchanges, providing for affordable quality health care coverage. But a strong exchange would help more than the bottom lines of individuals and families – states too would benefit greatly from the savings associated with health care reform. The Affordable Care Act provides essential steps to slow the growth of health care costs that burden taxpayers and stretch state budgets. Slowing the growth of health care costs must be at the top of the list for states facing fiscal pressures – doing so successfully will benefit employers, workers, and taxpayers.
Savings For States
There is a wide variance among projections for potential savings for states. Much of this depends heavily on how the state chooses to implement the new law – and state exchanges are a critical element in the possibility for cost savings. While expanded Medicaid coverage will come with an increase in costs, there are opportunities to offset savings, and it will be up to the states to implement the law to their advantage (including reductions in state support for uncompensated care, Medicaid savings, federal increases for CHIP) and new revenues (from state taxes on insurance premiums and increased revenue from taxes on medical providers).
According to the Kaiser Commission on Medicaid and the Uninsured, “three national estimates included offsetting savings and found net national savings of $33 to $107 billion” from the law. The Congressional Budget Office has projected a federal deficit reduction of $132 billion between 2012 and 2019. This is in stark contrast to the repeal bill recently presented by the new House leadership, which the CBO estimated would increase deficits by $119 billion during the same time period.
Contrary to what opponents say, the law will create jobs, especially in the health care industry where more professionals will be needed to address the new enrollees. And the health law incentivizes students and recent medical school graduates to go into fields that are underrepresented or hard to fill. For example, to strengthen the primary care work force, there are funding measures including scholarships and loan repayments for primary care doctors and nurses working in underserved areas.
With the health law implemented in the states, it’s hard to ignore the numbers. Americans want a strong economy and they want to know their money is spent wisely, and the health law clearly shows the cost savings in billions.
Savings for Small Businesses
Small businesses fare substantially better under the health law than they did before its enactment. In today’s troubling economic times, small businesses are often hit the hardest, especially the fewer and fewer who offer health care to their employees. Under the Affordable Care Act, small businesses can breathe a little easier with options to reduce their health care costs and drive the economic growth.
The Small Business Majority, in conjunction with a Massachusetts Institute of Technology economist, conducted an analysis of how small businesses would fair under the Affordable Care Act. The findings showed that under the law, small businesses have the potential to save as much as $855 billion.
According to a joint study released by the Small Business Majority and Families USA, more than 4 million small businesses were eligible to receive a tax credit for the purchase of health insurance for their employees in 2010. In 11 states, over 90 percent of small businesses were eligible to receive a tax credit: Arkansas, Montana, Nebraska, South Dakota, Mississippi, Indiana, North Dakota, Missouri, Iowa, West Virginia, and Maine. Of the 4 million small businesses eligible for the 2010 tax credit, over almost 1.2 million were eligible for the maximum tax credit.
In a nationwide survey of 619 small business owners, Small Business Majority asked owners how they viewed the tax credits and the exchange. Many admitted to not knowing the provisions of the law well enough to take advantage of it. Once the small businesses were informed, however, one-third said they were likely to start offering health care benefits to their employees.
Commemorating the one-year anniversary of the passage of health reform, Small Business Majority explained how tax credits “aren’t the end of the story”:
By 2014, states will create health insurance marketplaces where small businesses can pool their buying power and drive down costs. They also will be able to compare a variety of plans in those marketplaces and purchase the one that best meets their needs. Some states have already begun creating these pools. And, insurance companies will no longer be able to refuse to insure someone because of preexisting conditions — a current reality that stifles entrepreneurship because many creative and hardworking people are scared to take the leap into small business without coverage. The nation’s healthcare system was in dire need of reform. It discouraged entrepreneurship, stunted economic growth and kept many small employers who wanted to provide health benefits to their workers from doing so due to the expense.
For states, small businesses, and families alike, the Affordable Care Act is a step in the right direction towards bringing down costs and ensuring economic security.
Full Resources from this Article
Healthcare.gov – Fact Sheet: The Affordable Care Act’s New Patient’s Bill of Rights
Progressive States Network – 2011 Blueprint for Economic Security: Health Security
Progressive States Network – State Lawmakers Defend Health Care Law Against Right Wing Attorneys General
Kaiser Family Foundation – State Budgets Under Federal Health Reform: The Extent and Causes of Variations in Estimated Impacts
This article is part of PSN's email newsletter, The Stateside Dispatch.
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