State Experimentation

I have a hunch that the next decade will turn into a period in which States will be granted a great deal of discretion to implement the ACA and any modifications in the ways they think best. There are such opportunities in the ACA such as section 1332 waivers, but I suspect any state with a coherent plan will get a strong listen from Washington. Most people likely think this means pared-down proposals, with a goal of expanding coverage via catastrophic insurance, but the most aggressive early experimenter appears to be Vermont, who wants to create a single-payer system.

Some key factors across states that will determine the type of experimentation they may attempt include:

• relative intensity of the current system, especially in Medicare. There is tremendous variation if per capita Medicare expenditures across the nation and high spender areas will have fewer options because providers are used to doing more and being paid more; it will be easier if you are in a 'low intensity practice pattern state'
  
• relative economic vitality of the state
• current rate of uninsurance. Massachusetts is around 2.5% uninsured, while Texas is around 25%
• Health outcomes/population health
• Medicaid share rate (what proportion of Medicaid costs are paid by the federal government; poorer states get more federal subsidy)
• Politics of the state

Should be interesting to watch what happens in Vermont and whether other states will be emboldened to search for a grand solution. (h/t for links @ezraklein)

Update: Aaron Carrol also writing about Vermont.