Health Care: Who Needs Congress?

Health Care: Who needs Congress?

Trump Beat

May 19, 2017

This week, the Department of Health and Human Services released a checklist to state governors, encouraging them to take advantage of a waiver program written into the Affordable Care Act. On the surface, there’s nothing controversial about the HHS secretary reminding states about an option that’s available to them by law (or even encouraging them to make use of it). In this instance, however, it is a sign that the Trump administration is planning to push its health care agenda through, whether or not the GOP can pass a plan through Congress to repeal and replace Obamacare.

A bit of background: The ACA allows states to apply for waivers that lets them stray from the standard rules of Obamacare. That can include changes to the individual mandate requiring that most people have insurance or pay a penalty, the employer mandate that requires most companies to offer coverage to their employees, the subsidy program for some low-income people who don’t qualify for public insurance or get it from an employer, and the “essential health benefits” rules that mandate the types of care that insurance plans must cover. Some states have already made use of the program: Alaska is using a waiver to pay insurers for the most expensive people they cover, a practice called reinsurance, in order to keep premiums down.

This week’s HHS letter encourages other states to follow Alaska’s lead and set up those reinsurance programs, a move the Obama administration supported as well. But it goes a step further, also pushing for states to create so-called high-risk pools for people with expensive-to-treat medical conditions. High-risk pools aren’t a new idea; 35 states had one before the ACA became law. But they represent a fundamentally different approach than the ACA’s marketplaces, where people sick and healthy are funneled into the same insurance plans.

High-risk pools also happen to be a major provision of the American Health Care Act, the GOP health bill that the House of Representatives passed this month. The AHCA’s fate in the Senate is far from certain, but the Trump administration isn’t waiting for Congress to act: Since the waiver process doesn’t require approval from Congress, only state governments and HHS, it’s a way for the GOP to get these pools underway with or without a replacement bill, or before one could go into effect.

Republicans say high-risk pools will bring down costs for others in the marketplace. In the past, however, the pools have been expensive to run, expensive for people using them and have covered only a limited number of people. They have also been criticized for siloing people with pre-existing conditions into lesser health insurance. It’s not clear whether the same would be true today if states sought out the waivers promoted by HHS. That’s partly because there are serious limitations on their use — under the rules, states must cover as many people as they would under the ACA’s standard rules, with plans that are just as comprehensive and at no more cost to consumers. Then again, those rules only apply as long as the ACA remains the law of the land.