As the fate of the Accordable Care Act (ACA) hangs in the balance in a federal court, states are experimenting with myriad policies affecting health care coverage and insurance costs.

In a hearing in New Orleans on July 9, two Republican-appointed members of a three-judge panel of the 5th District U.S Court of Appeal suggested that the ACA, often called Obamacare, may have become unconstitutional when Congress eliminated a requirement that nearly all Americans have health insurance or pay a penalty.

A ruling is not expected for several weeks in this case, known as Texas v. United States.Democratic governors and the Democratic-controlled U.S. House of Representatives are appealing a conservative Texas federal judge’s decision striking down the law, which was challenged by 18 Republican state attorneys general.

Overturning the ACA would upend coverage for nearly 30 million people and make health care a momentous issue in the 2020 elections.

“States would lose significant federal funds if the ACA was overturned,” said Jennifer Tolbert of the Kaiser Family Foundation (KFF).

A key provision of the law has promoted expansion of Medicaid, the federal-state program that provides health coverage for low-income families and the disabled. Thirty-three states have expanded Medicaid, and expansion is pending in three other states.

Most of the expansion has been financed by the federal government, and few states would be able to afford it on their own, Tolbert said.

If the ACA is struck down, it would deprive coverage to 17.1 million people added to the Medicaid rolls through expansion and 11.4 million people who obtain health insurance through the ACA’s on-line federal or state exchanges. A million people in Minnesota and New York have coverage through another feature of the ACA, putting the total who would be affected at 29.5 million, according to KFF data.

But the Supreme Court has twice upheld the constitutionality of the ACA. States are proceeding on the premise that the law will survive the latest legal challenge and are experimenting with competing Democratic and Republican visions of health care.

Democrats are testing a public health insurance option to compete with private insurance in Washington state. Public options are under study in Colorado at the behest of Gov. Jared Polis (D) and in New Mexico at the direction of the legislature.

California recently extended health coverage to unauthorized immigrants below the age of 25. Five other Democrat-controlled states and the District of Columbia provide coverage for unauthorized immigrants 18 and younger.

California is also on track, beginning in 2020, to become the first state to offer state-funded tax credits to middle-class enrollees in the ACA. They will be financed by a new tax penalty on Californians who don’t have health insurance.

Meanwhile, in many states, Republicans are offering cut-rate insurance plans to compete with more comprehensive health insurance policies offered on the ACA exchanges. In some of these states Republicans are also trying to impose Medicaid work requirements.

So far, both Democrats and Republicans in the states have fallen short of their expectations. President Donald Trump also was thwarted when a federal court ruled he lacked authority to compel drug manufacturers to disclose the prices of their products on television.

In Washington state, a public option proposed by Gov. Jay Inslee (D) was watered down to win legislative passage in the face of fierce opposition from hospitals, doctors and insurers. The bill that emerged from a legislature the Democrats narrowly control guarantees payments to hospitals and doctors at 160 percent of Medicare rates, makes participation voluntary and turns over day-to-day operation to private insurers.

“This bill is important, but it’s also relatively modest,” Sen. David Frockt (D), the measure’s sponsor, told the New York Times. “When I see candidates talking about the public option, I don’t think they’re really grasping the level of opposition they’re going to face.”

The power of that opposition was demonstrated this month in Connecticut where a proposal by Gov. Ned Lamont (D) to create new public plans for individuals and small businesses that had been expected to pass died in the legislature after intense opposition from Cigna and other insurers.

In California, Gov. Gavin Newsom (D) signed the nation’s first bill extending Medicaid coverage to unauthorized immigrants between the ages of 19 and 25. This is estimated to cover 90,000 low-income residents at a cost of $98 million. Since Medicaid covers only U.S. citizens, the cost will be borne by the state.

But while California is extending coverage to young adult immigrants, enrollment among unauthorized immigrant children under 18 is declining.

The Golden State has covered such children since 2016. In February of this year, the latest month for which data is available, 127,848 immigrant children were enrolled in Medi-Cal, the California version of Medicaid. This is a five percent drop from the program’s high point of 134,374 in April 2017.

Analysts attribute much of the reduction to anti-immigrant rhetoric and federal crackdowns on unauthorized immigrants, who are reluctant to become involved with any government program.

On the Republican side of the political spectrum courts and legislatures have blocked or slowed GOP initiatives.

Early this year a federal judge prevented Arkansas and Kentucky from imposing work requirements. New Hampshire work requirements were scheduled to begin this month but on July 8, Gov. Chris Sununu (R) signed a bill passed by a Democrat-controlled legislature that scaled back work requirements in the Granite State. Sununu postponed implementation of any work requirements for 120 days.

The Centers for Medicare and Medicaid Services (CMS) has approved waivers allowing work requirements for nine states, but the only state currently imposing such requirements is Indiana. A program that began in the Hoosier State on July 1 will require an estimated 72,000 people to report their work hours or other activity.

Republicans failed last year to repeal Obamacare despite multiple attempts in the U.S. Senate. But the Trump administration has since made rules changes that challenge several of the ACA’s premises. The most controversial of these changes was the introduction of cut-rate insurance plans that do not include many of the benefits guaranteed by Obamacare. Many of these cut-rate plans are not available to persons with pre-existing medical conditions in contradiction to the ACA, which requires that insurers provide coverage to everyone regardless of medical history.

Four states — California, Massachusetts, New Jersey and New York — ban plans that are not compliant with the ACA. Fourteen other states limit the duration of the cut-rate plans to three or six months.

When the ACA was approved by Congress on March 23, 2010, it was expected to join Medicare as part of the safety net that protects Americans who need medical assistance. Unlike Medicare, however, the ACA has been partisan from the outset. It passed on a party-line vote when Democrats controlled both Houses of Congress. Republicans have been trying to kill or cripple the law ever since.

They’re still trying, but there was a rare encouraging note from the White House on July 10 when President Donald Trump announced what Kaiser Health News called “a bold plan to improve care to patients with kidney disease, which he claimed would save thousands of lives each year and billions of dollars for taxpayers.”

Trump signed an executive order that boosts incentives for doctors and dialysis centers to treat patients at home in contrast to the current system, which focuses on in-patient dialysis center treatment.

Dr. Mark Rosenberg, president of the American Society of Nephrology, praised Trump’s action. “I have been a kidney doctor for 35 years, and this is the most game-changing thing ever to happen,” he said.

The irony of this important change is that Trump’s authority for making it without congressional approval comes from the Centers for Medicare and Medicaid Innovation (CMMI), which was created by Obamacare.

The day before this happened, administration lawyers joined Republican state attorneys general in an appellate court in New Orleans, in arguing that the entire ACA, including the CMMI, should be scrapped.

 

-- By Lou Cannon