Tuesday, March 1, 2011

President Endorses Wyden-Brown

President Obama yesterday announced his support for the Wyden-Brown modification of the ACA that would allow states to receive waivers to the law's provisions such as the individual mandate in 2014 (pushed earlier from the 2017 date for waivers now in the law), so long as the state showed that it could meet the following requirements:
  • expand insurance coverage rates to similar levels that would be achieved by implementing state-based insurance exchanges
  • provide similarly expansive benefits defined in the law
  • have insurance be as affordable as it would have been in exchanges
  • not increase the cost to the federal government compared to implementing the ACA
Basically, Wyden-Brown says that states can try an approach different from an individual mandate and a state-based insurance exchange so long as they can achieve similar coverage with the same amount of federal dollars.

This puts opponents of the ACA in a difficult position for two reasons. First, it would grant states more flexibility, earlier than is now available, which will be politically popular. Second, the IFs of Wyden-Brown are substantial, notably that a state can try different models so long as they can move from around 17-18% uninsured (national average) to 5-6% uninsured. This is a big if, that will be impossible to do without some form of mandate. The big picture mandate possibilities are:
  • government insurance (like Medicaid expansion)
  • an employer mandate (Hawaii has long had one, and has around 91% insurance coverage)
  • an individual mandate (Massachusetts has one, and has around 97% insurance coverage)
If you are opposed to all three of these, you have no credible way to expand insurance coverage while also trying to address health care costs and problems with quality. Opponents of the ACA have been quite clear about what they are against, but have not provided specificity about what they are for. In one sense, they are free riding on what they are against, and have so far harnessed this politically without having to get specific about what they would do. The passage of Wyden-Brown would essentially call the bluff of opponents of the ACA and say 'go ahead and do it your way.' This will help demonstrate that they do not have a way that can substantially expand coverage rates.

The types of waivers that are likely under Wyden-Brown would seem to fall into two main types:
  • more progressive or expansive reforms such as those desired by Vermont
  • opening up of exchanges as envisioned by the ACA to large employers
It is unclear how specific the definitions of 'benefits as expansive as those in the exchanges' will be interpreted. Further, what if a state seeks to go beyond what would happen under the ACA in terms of coverage would they get more discretion in other areas? For example, would a state be able to provide exchange-level coverage to 94-95% of their population, and attain universal coverage by providing much less expansive (catastrophic) coverage for the 5-6% who would otherwise have been uninsured after implementation of the ACA?

There are plenty of unanswered questions, but the announcement yesterday is a sign that we are likely to see continued movement toward increasing state flexibility in implementing the ACA.


  1. What do you think of the viability of alternatives to the individual mandate, such as limited enrollment periods (for instance, only appling the ban on pre-existing conditions to those who enroll during a certain period, maybe the February of a leap year).

  2. I doubt those options will get to 94-95% but I think they are a viable alternative and will move us in the correct direction. I think if we dropped individual mandate in favor of more carrot and less stick I would also favor down shifting a bit on the benefit definition...maybe even lots more pared back for younger folks to try and get them in the system and used to buying insurance. It is possible the 94-95% cover via the current (weak) individual mandate are overblown. If we could get some semblance of political agreement that moving toward universal and getting serious about costs while trying to improve quality was the goal we could muddle through reasonably well I think. We need a political deal to move the goal of expanding coverage question off the table so we can focus on implementing and addressing costs.