Governors Urge Greater Flexibility for States in Creating and Implementing Health Care Policy

Rachel del Guidice / September 07, 2017

Five governors—representing both parties and from states across the country—told a Senate committee Thursday that inaction on health care is not an option and lawmakers should look to the states for solutions.

Colorado Gov. John Hickenlooper, a Democrat, praised the successes of Obamacare, but said more work needs to be done.

“Many people are angry and have a right to be,” Hickenlooper said during the hearing of the Health, Education, Labor and Pensions Committee on stabilizing premiums for individuals in the 2018 insurance market.

He added:

For the 400,000 Coloradans in the individual marketplace, many continue to struggle. Colorado’s Western slope—which includes some of our most rural areas—has 14 counties with only one insurer on the exchange. It is also home to some of the highest premiums in the country. A 60-year-old in rural Craig, Colorado, making less than $50,000 will pay over $12,000 per year on premiums alone—around 25 percent of income.

Hickenlooper pointed to funding cost-sharing reduction payments—subsidies designed to reduce out-of-pocket costs for low-income patients who purchase silver-level plans through Obamacare’s exchanges—as a path to a solution.

“Our plan asks you to explicitly fund the cost-sharing reductions at least through 2019,” the Colorado governor said, adding:

Funding the [cost-sharing reduction] payments for 2018 only will put us right back where we are now in a matter of months. It will foster uncertainty surrounding these payments, threatening to drive up premiums and force insurers out of the market.

Utah Gov. Gary Herbert, a Republican, said he is not keen on cost-sharing reduction payments, but added they should be funded for the time being.

“I personally am not a fan of cost-sharing reduction payments. Nevertheless, in the near term, individual insurance markets need predictability in order to price their products adequately,” Herbert said, adding:

The sudden demise of CSR’s would destabilize Utah’s individual insurance market, putting at risk some 110,000 Utahns who benefit from this program. The transition should include funding for CSR’s to at least 2018 or 2019.

Montana Gov. Steve Bullock, a Democrat, said cost-sharing reduction payments, which President Donald Trump has tweeted about ending, are essential.

If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!

— Donald J. Trump (@realDonaldTrump) July 29, 2017

“The uncertainty surrounding whether the Trump administration will continue to make CSR payments is having a real impact on private markets, and congressional assurance that these payments will continue to occur will meaningfully impact the stability of the market—in Montana, and across the country,” Bullock said.

Dan Holler, spokesman for Heritage Action for America, the lobbying affiliate of The Heritage Foundation, told The Daily Signal in an email that requests for funds have become commonplace.

“Governors pleading for more federal money isn’t new, but in this case it would simply prop up a failed law,” Holler said. “That isn’t fair to taxpayers or those suffering from Obamacare.”

Gov. Bill Haslam of Tennessee, a Republican, said shielding Obamacare’s insurance exchanges from complete collapse includes funding cost-sharing reduction payments.

“Congress should take steps now to prevent the total collapse of the health insurance market by, No. 1, funding cost-sharing reduction payments; two, creating a short-term reinsurance program; and three, providing flexibility to the states,” Haslam said.

The Tennessee Republican also called on Congress to streamline the waiver process for states to opt out of Obamacare provisions.

“A … critical way to provide more stability is to offer flexibility to states to address their unique challenges and circumstances,” Haslam said. “The waiver-approval process should be expedited, and the strict guardrails currently placed upon waiver requests should be loosened in a manner that will attract younger, healthier individuals to the marketplace.”

Obamacare’s “Section 1332 waivers” are described this way by Heritage Foundation health policy expert Robert Moffit in a recent report:

Section 1332 of Obamacare allows states to apply to the secretary of the Department of Health and Human Services (HHS) and get a ‘waiver’ from 11 statutory provisions, including the individual and employer mandates, the actuarial value mandate that determines coverage levels, the federal rules governing the definition of individual and small-group coverage, and the federal essential health-benefit requirements.

Gov. Charlie Baker of Massachusetts, a Republican, said his state has seen success with the implementation of universal health care in 2006 by then-Gov. Mitt Romney, his fellow Republican.

“Ninety-nine percent of our children and youth, and more than 96 percent of our residents, have health care insurance, the highest percentages in the country,” Baker said.

Baker said he supports the individual insurance mandate that his state imposes, but said states could look at various options of maintaining continuous coverage, whether it is through a mandate or a fine.

“Different states can choose different approaches, or some combination, but if we want to make it easy for people to purchase insurance if they do not have access to it through work, and they don’t qualify for public coverage, we need to nudge them into purchasing coverage, and keeping it,” Baker said.

Part of the solution, according to Utah’s governor, is to give states greater freedom in creating health care policy.

“I believe that the states can do this better for their unique populations than can the federal government,” Herbert said. “That is why I would urge you to consider a health care future that gives back to the states the lion’s share of responsibility. Given the impasse at the federal level, federalism is both prudent policy and prudent politics.”

Whitney Jones, graduate fellow in health policy at The Heritage Foundation, told The Daily Signal in an interview that increased flexibility for states in making health care policy was a common thread.

“In terms of greater flexibility for the states, governors were definitely voicing that desire. They were also voicing the desire for a more streamlined process for applying for the [Section] 1332 waivers and making that easier on their [state insurance] commissioners to do so,” Jones said.