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Maryland Gov. Martin O'Malley signed a bill allowing residents to get temporary coverage if they failed to enroll in an exchange plan because of the state's technology woes.
Photo credit: Office of Maryland Gov. Martin O'Malley

Reform Update: States' efforts to alter reform-law implementation may affect providers, insurers

By Paul Demko
Posted: January 30, 2014 - 3:30 pm ET

Legislatures across the country are considering proposals to address fallout from implementation of the Patient Protection and Affordable Care Act. In many instances, that means bills that aim to allow states to opt out or nullify the federal healthcare reform law. While those efforts are almost certainly futile given the U.S. Supreme Court's blessing of the law, more piecemeal efforts could have ramifications for healthcare providers and insurers.

According to the National Conference of State Legislatures, there were at least 81 bills pending in 32 states broadly opposing the ACA heading into 2014 legislative sessions.

In New Hampshire, Republican state Rep. Bill Nelson has introduced legislation that would require insurers selling products through the exchange to negotiate with all willing healthcare providers. The legislation was spurred in part by the fact that just one insurance company—Anthem Blue Cross and Blue Shield of New Hampshire—is selling products through the exchange. West Virginia is the only other state with just one health plan active in the exchange.

“As it currently stands, they get to talk to who they want,” Nelson said. The providers “get no say in it. That's the problem.”

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Anthem's provider network excludes 16 of New Hampshire's 26 acute-care hospitals, prompting concerns about access to care. Another bill in New Hampshire would require at least one hospital in each county to be included in any network for products sold through the exchange. Nelson's bill received a hearing this week, but is yet to come up for a vote.

Minnesota Republican state Rep. Kelby Woodard has introduced legislation seeking to shelter schools from any negative financial consequences from implementation of the ACA. Under his bill, each school district and charter school would be required to report to the state how much additional cost they incurred to meet the requirements of the federal healthcare law. The state would then be on the hook for reimbursing the schools for those costs.

“I've heard from even small school districts it's in the hundreds of thousands of dollars, which means for the bigger school districts, it could be in the millions of dollars,” Woodard said. “It really has nothing to do with educating kids.”

It's not just Republicans who are still trying to shape the law's implementation through their state legislatures.

In Maryland, Democratic Gov. Martin O'Malley signed a bill into law Thursday that will allow individuals who were thwarted from obtaining insurance through the state's problem-plagued exchange website to receive temporary coverage through the state's high risk pool. It goes into effect immediately.

And lawmakers in several states continue to haggle over whether and how to raise Medicaid eligibility to cover residents who earn up to 138% of the federal poverty level, as called for in the reform law.

In Alaska, Democratic state Rep. Andy Josephson plans to introduce legislation that would require the state to expand the program. Half the states, including Alaska, have so far opted not to move forward with the Medicaid expansion.

Josephson's bill includes a trigger that would allow the state to opt out of the expansion if the federal government fails to cover at least 90% of the cost as promised. That's designed to alleviate Republican concerns that the federal government will eventually renege on its financial commitments because of insufficient funds, which Josephson calls “absurd.” “If the federal government implodes, we're all doomed,” he said.

Half of Americans still view healthcare law unfavorably

The Patient Protection and Affordable Care Act remains unpopular with the public, according to the latest tracking poll from the Kaiser Family Foundation. Exactly half of respondents view the law unfavorably, while just 34% expressed a favorable impression. Despite a surge in enrollments through the state and federal exchanges in recent weeks, those results are virtually identical to similar surveys conducted in November and December. The public also remains broadly ignorant of the law's provisions. Just 54% of uninsured respondents, for example, were aware that it provides federal subsidies to help low-income individuals purchase coverage.

Exchange plans slightly cheaper than employer options

Premiums for insurance plans offered on the state and federal exchanges are 4% cheaper on average than similar coverage offered by employers, according to a new study by PwC's Health Research Institute. The average employer-provided plan covers 85% of medical costs. That's somewhere between the levels of coverage provided by gold and platinum-level plans offered on the exchanges. Researchers found that the average premium cost for an employer sponsored plan was $6,119 for 2014. In comparison, exchange customers would pay an average of $5,844 for comparable coverage. The establishment of the exchanges has transformed the individual insurance market. The PwC report points out that previously, more than half of individual plans covered less than 60% of medical costs, the lowest threshold allowed on the exchanges.

Follow Paul Demko on Twitter: @MHpdemko

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