States Act to Ensure Access to Care with Affordable Care Act in the Courts

December 11, 2019|12:24 p.m.| ASTHO Staff

Access to quality and affordable health insurance is necessary to protect and improve the public’s health at large. State and territorial health agencies recognize the importance of access to health services-- including access to health insurance coverage--as a key component of health and well-being. The U.S. saw significant decreases in the percentage of uninsured residents in the last decade: the percentage of uninsured non-elderly adults decreased from over 44 million in 2013 to just below 27 million in 2016, due in large part to implementation of the Affordable Care Act (ACA).

A ruling on the latest lawsuit challenging the ACA is expected soon and is causing uncertainty around the future of the individual health insurance marketplace. The lawsuit, Texas v. United States, has the potential to impact insurance coverage and market stability as well as state actions on insurance reform. The U.S. Court of Appeals for the Fifth Circuit is reviewing a lower court’s decision that ruled the health law unconstitutional on the premise that when Congress struck down a tax penalty in 2017 for not having health insurance –known as the individual mandate– the entire law became invalid. The plaintiffs claim that because the individual mandate no longer produces revenue for the federal government, it is no longer an exercise of Congress’ taxing power. The case centers on the argument that the rest of the ACA is not severable from the individual mandate and is invalid without it.

As states await the court’s decision, there is increased uncertainty about the future of the ACA and the ability to maintain the expanded access to care. In turn, many states have taken legislative or executive action to safeguard health insurance coverage and maintain existing consumer protections:

State Individual Mandates
Several states have enacted state individual mandates for health insurance coverage. Massachusetts led the charge with their 2006 mandate that predates the ACA. Since Congress struck down the federal individual mandate, New Jersey and the District of Columbia lawmakers passed individual mandates that went into effect in 2019. California, Rhode Island, and Vermont enacted individual mandates that will go into effect in 2020. The state individual mandates can incentivize young and healthy consumers to stay in the individual insurance marketplace, thereby lowering premiums and reducing uncompensated care. Some states have earmarked funds expected from the individual mandates penalties to fund reinsurance programs, which allow states to reimburse insurers for certain high-cost claims in order to lower premiums across the board. For example, funds generated by New Jersey’s individual mandate penalty –expected to be about $90 to $100 million annually– are being used to finance the state’s reinsurance program that was developed through a Section 1332 waiver.

Expanded Premium Subsidies
While the ACA provides financial support for individuals from 100 percent to 250 percent of the federal poverty level (FPL), some states have enacted legislation to expand the income eligibility requirements with state-funded subsidies to lower consumer costs and improve affordability of health insurance premiums. Massachusetts and Vermont offer enhanced premium subsidies to individuals with incomes up to 300 percent of the FPL. Washington State lawmakers passed a bill this year requiring the state to develop a plan to fund premium subsidies for individuals with incomes up to 500 percent of the FPL. California also enacted legislation that will provide premium subsidies for individuals with incomes between 200 to 400 percent of the FPL, with temporary state funding for premium subsidies for individuals with incomes up to 600 percent of the FPL.

Pre-existing Condition Exclusions
Fourteen states have enacted laws that require insurers to provide health insurance coverage to people with pre-existing conditions. Most states have not adopted all of the pre-existing condition consumer protections that are in the ACA including guaranteed issue, adjusted community rating, and a prohibition on pre-existing condition exclusions. Some of these states, such as District of Columbia, have enacted laws adopting preexisting condition consumer protections that would be void if the corresponding ACA provisions are invalidated.

Open Enrollment Periods
An increasing number of state and territorial health agencies are conducting outreach and enrollment assistance for health insurance. Several states have extended open enrollment periods beyond the federal health insurance marketplace enrollment period of November 1, 2019 to December 15, 2019. For the 2019 enrollment period, eight states and the District of Columbia –including California, Colorado, District of Columbia, Massachusetts, Minnesota, Nevada, New York, Rhode Island, and Washington– extended their open enrollment periods to late December or January.

Other legislation
Other states have taken comprehensive approaches to maintain insurance coverage gains. In May 2019, Nevada enacted legislation creating a “Patient Protection Commission,” tasked with developing recommendations for protecting coverage if the ACA is eliminated. Other states, including New Jersey, Rhode Island, and Wisconsin have issued executive orders instructing state agencies to protect pre-existing conditions and other consumer protections.

Several other states have considered or have enacted legislation to begin planning a public insurance option. In May 2019, Washington State became the first state to pass a "public option" bill that will allow anyone to buy a Medicaid plan on the state marketplace starting in 2021. That same month, Colorado enacted legislation that tasks the Division of Insurance and Medicaid agency with developing a proposal for a “State Option” that would offer a public insurance option for all residents. Delaware and New Mexico have also enacted legislation to develop a plan for a public option.

With access to insurance coverage hanging in the balance as states await the court’s decision, state officials continue to work toward expanded insurance coverage and maintaining access to care.