POLITICO
GOPfs
Obamacare fears come true
By: Kyle Cheney and Jennifer
Haberkorn
June 1, 2014 - 07:03 AM EDT
Liberals wanted a national enrollment system under Obamacare.
They might just get it.
Right now, 36 states rely on HealthCare.gov, the federal exchange, to
enroll people in health coverage. At least two more states are opting in
next year, with a few others likely to follow. Only two states are trying
to get out.
Thatfs precisely the opposite of the Affordable Care Actfs original
intent: 50 exchanges run by 50 states.
The federal option was supposed to be a limited and temporary fallback.
But a shift to a bigger, more permanent Washington-controlled system is
instead underway — without preparation, funding or even public discussion
about what a national exchange covering millions of Americans means for
the future of U.S. health care. Itfs coming about because intransigent
Republicans shunned state exchanges, and ambitious Democrats bungled
them.
Republicans had warned all along that President Barack Obamafs health
law would lead to greater Washington control. gThis was all predictable,h
said Rep. Tom Price (R-Ga.), a physician who sees growing federal control
of the health system hurting patients. gOur friends on the other side
didnft listen.h
Tevi Troy, a health expert who served in the George W. Bush
administration and advised Mitt Romney in 2012, says the country needs to
stop and discuss the consolidation. gWefre kind of, in a way, stumbling
into this situation,h he said of the increasing reliance on the federal
portal.
HealthCare.gov is more than a computerized sign-up sheet. Itfs a
marketplace, where people get health coverage through private insurers,
for care from private doctors. Itfs not a single, nationalized Canadian-
or British-style program. Even within the federal model, each state has
its own insurance pool and state officials still regulate health
plans.
The state-exchange option gave governors and legislatures more leeway
to tailor the market to suit local conditions and demands. But the states
encountered political and technical obstacles, leading to investigations,
recriminations, disputes with contractors and hundreds of millions of
wasted dollars.
gWhile [the administration] spent an inordinate amount of time and
energy and money encouraging states to run and own their own exchanges, I
think that that has kind of shifted,h said Jon Kingsdale, a prominent
consultant who helped build the original Massachusetts exchange under
then-Gov. Romney. gHow long can you push a boulder uphill?h
HealthCare.gov was originally conceived as a just-in-case alternative
that would kick in if a state could not or would not build its own health
reform enrollment system. The law didnft even set aside money to build the
federal site, let alone operate it indefinitely. Even when red states
shunned a role in running Obamacare and a handful of blue states also
turned to Washington, the federal system was still seen as a short-term
bridge to a state-based system.
Not anymore. After its fiasco of a start, HealthCare.gov is working. No
one is pushing states with successful programs, like California and New
York, to switch. But there are only a few of those. Most of the other
states are in HealthCare.gov. And theyere staying put rather than start
their own exchange.
gWhy would any governor or legislature in their right mind step forward
at this point and say maybecthatfs a good idea?h wondered John McDonough,
a former aide to Sen. Ted Kennedy who worked on health reform in both
Washington and Massachusetts.
In theory, states can still tap into virtually unlimited funding to
create exchanges. But a number of state officials say the administration
has signaled that it doesnft want to keep pouring millions into broken
state systems. A spokesman for the Centers for Medicare & Medicaid
Services, which oversees Obamacare exchanges, said only that states should
choose whatever path gthey believe best meets the needs of their consumers
and insurance market.h
gCMS is committed to working closely with states to support efforts to
ensure that all consumers will have access to quality, affordable, health
coverage in 2015,h spokesman Aaron Albright said.
Republicans, who contributed to the growing power of HealthCare.gov by
not supporting state-run exchanges, want federal investigations into why
some states failed.
gWhile many of these states are simply moving to the federal exchange
as a convenient method of alleviating the problems with their own
exchanges, it is a short-sighted solution,h said Sen. Orrin Hatch, the top
Republican on the Senate Finance Committee. gNothing is more important
right now than for Congress to find out what went wrong and why.h
Nevada in mid-May became the latest to scrap its system and opt into
HealthCare.gov. A few days earlier, Oregon had bailed on its $250 million
exchange. Massachusetts is still trying to salvage its exchange, but itfs
also laying the groundwork to join HealthCare.gov.
Hawaii and Minnesota both insist they are moving ahead with their
underperforming exchanges; skeptics predict theyfll have to jettison them
and join the federal system sooner rather than later. And some small
states with high-performing exchanges may have trouble keeping them over
the long haul as federal financial support ends.
Connecticutfs exchange performed so well that Maryland wants to buy it
and graft it onto its own broken one, but even the director of
Connecticutfs exchange, Kevin Counihan, doubts that all the small states
will be viable. gTherefs going to be some consolidation there, some going
to the federal exchange,h he predicted. gWe donft need 50 of these. And
having this really functional federal exchange is really very, very
desirable.h
Rhode Islandfs Gov. Lincoln Chafee, who has faced calls from political
opponents to abandon the state exchange, said in an interview that hefs
determined to keep it. But he is open to an eventual regional solution,
maybe a merger with the Massachusetts exchange. But those conversations
have been very preliminary.
The migration toward a national exchange may have been unforeseen and
in some cases unwanted. But it is closer to what the liberal House of
Representatives wanted in 2009 and 2010 when Obamacare was being crafted.
The argument at the time was that a national model would be more
efficient, more consistent and less vulnerable to shifting political
winds. Politically, that centralized approach was a nonstarter.
Senate Democrats, who prevailed, wanted states to run their exchanges,
partly because they had always regulated insurance. A state-centered
system let Democrats push back against the charge that Obamacare was a
federal gtakeoverh of the health care system. They also hoped, naively as
it turned out, that giving states more control would entice some
Republicans to buy in.
When HealthCare.gov collapsed in the fall and a handful of states
showed early success, the Senate vision seemed vindicated. Then the roles
reversed. HealthCare.gov recovered. States floundered. Even some early
advocates for state control have had second thoughts.
Kansas Insurance Commissioner Sandy Praeger, a Republican who has had a
national voice in the health policy debate, used to advocate a state
exchange. Now, she thinks building one is too expensive and risky.
gI donft see our state ready to make that financial commitment. I think
it would probably not be very practical,h she said. Praeger wants Kansas
to stay in HealthCare.gov, which shefd like to see modified to give states
more flexibility. She can envision a national exchange evolving into ga
comfortable fit rather than an imposed upon, top-down requirement.h
Therefs already some basis for that. Seven states, including Arkansas,
New Hampshire and Michigan, have exchange partnerships in which they use
HealthCare.gov but maintain control over aspects of the Obamacare markets.
The partnerships were improvised during the state decision-making process
in early 2013 and were supposed to last just a year or two. But none of
the seven are moving to run things on their own. Instead, their
partnerships could become the blueprint for a national system.
gIf the [federal system] can evolve quickly to allow state flexibility,
then there will be little reason for states to take on the IT challenge,h
said Jon Gruber, an economist at the Massachusetts Institute of Technology
who advised both Massachusetts and the White House on health reform.
Aneesh Chopra, former chief technology officer for the White House,
says each state could run its own gpersonalizedh website while redirecting
consumers to HealthCare.gov. The feds would handle the IT architecture,
and states would have the facade of state-run exchanges.
How that flexibility would come about — or how to pay for the federal
exchange in the long term — has barely been discussed. Republicans are
still focused on repealing Obamacare, Democrats on preserving it, and at
least until after the November elections, nobody is doing a whole lot of
talking about what has to come next.
Joel Ario, who ran the Department of Health and Human Services exchange
office until 2012, prefers state control but worries that time is running
out as the insured and the insurers alike get accustomed to
HealthCare.gov.
gI think forces inside the federal government think the federal
government should run this,h said Ario, now a consultant with Manatt
Health Solutions. gI think those folks are now pushing hard, and if the
states arenft careful, there may be some c motion to make it harder for
the states to reclaim their role.h
Right now, only two are trying to do that. New Mexico, which tried to
create its own exchange for 2014 but switched to HealthCare.gov when it
realized it wouldnft be ready, is preparing to transition out by November.
Idaho officials say theyfll deliver a blueprint to the Obama
administration by Sunday and are paying careful attention to what worked
in other states and what tripped them up.
gHindsight is 20-20 so we have the benefit to see what happened,h said
Jody Olson, a spokeswoman for Your Health Idaho. Lesson One, she said, is
to be gvery streamlined, very efficient, rather than trying to do a
hundred things in a hundred different ways.h
Others in favor of state control are urging patience, arguing that itfs
worth giving states the option even if it takes time. Itfs easier for
states to do local outreach, to work with brokers and agents, to integrate
the health care law with existing social services programs. Mistakes can
be fixed, they argue.
gItfs not that [states] canft do it. Itfs apparently they didnft do it
right upfront,h said Rep. George Miller (D-Calif.), an architect of the
House bill that favored the national approach who now wants states to have
time to make their own choices work. gBut that canft be the test to just
say wefll just throw away that model. This model lets them choose, and I
think that choice is fairly important still.h
Millerfs own state, California, surpassed enrollment goals and is seen
as among the most viable exchanges. But what worked in one huge and very
Democratic state may just not be all that relevant to the rest of the
country, according to Bryce Williams, managing director at Towers Watson,
which has a Web brokerage division that helps people sign up for
HealthCare.gov.
gItfs not out of the question,h he said,h that in less than five years,
you would see 49 states be in the federal exchange and
California.h
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