Affordable Care Act Implementation Among the States, Part 1: Health Insurance Exchanges

When the Patient Protection and Affordable Care Act was enacted by Congress, it contained basic provisions that would impact the situation of public health in certain States differently.  Primarily, it would be left up to the determination of each State to decide whether to establish its own health insurance exchange, to run its health insurance exchange in a complimentary partnership with the Federal Government, or to leave the task of instituting such an exchange up to the Feds completely.  The health insurance exchange is a regulated marketplace, accessible online, which provides item-by-item comparisons of various private insurance plans.  Federal guidelines indicate what information has to be provided by insurers to the general public, just as new regulations instituted through the Affordable Care Act mandates certain minimum responsibilities for health insurers.  (For example, health insurance companies had to insure children of their policyholders through age 26, could not deny their policyholders’ claims on the grounds of possessing “preexisting conditions,” and could not cancel their insurance policies in advance of claims for treatment after making them pay premiums.  These sorts of measures–as well as declining to provide apples-to-apples comparisons between one’s own health insurance policies and another insurer’s–were all legal before the Affordable Care Act was passed, just so you understand the measures Congressional and State Republicans have so doggedly fought.) By my count (based on a critical reading of information provided by the Kaiser Family Foundation), 18 States (including the District of Columbia among them) have instituted State-based insurance exchanges, 7 States are planning partnership exchanges in conjunction with the Federal Government, and 26 States have declined to institute their own exchanges, instead opting to let the Federal Government establish and run the exchanges for them. Every State with both a Democratic Governor and a unitary Democratic State legislature–there are 16, counting nominally–has opted to create either a full State-based or partnership exchange.  Of the 25 States with both a Republican Governor and a majority-Republican State legislature–counting Virginia with its nuclear partisan control and excluding Nebraska with its non-partisan State Senate–only 3 have instituted State or partnership exchanges, 1 of which (Utah’s) was pre-existing.  Ohio has a State-Federal partnership exchange in all but name, based on an existing State regulatory agency which reserves the right to oversee health insurance companies listed on its Federally-operated health insurance exchange.  Of the 10 States (counting Nebraska) that have split-control governments, 6 have State or partnership health insurance exchanges.  3 in this latter category were proposed by Democratic Governors (though 1 Governor, Kentucky’s Steve Beshear, had to implement it through executive order to bypass the Conservative-Republican State Senate) and 2 by Republican Governors who work with Democratic legislatures; 1 (Iowa’s) was already in place shortly before passage of the Affordable Care Act and was fashioned into the State component of a partnership exchange.  Rick Snyder, the moderate Republican Governor of Michigan, failed to persuade his Republican State legislature to institute either his desired partnership health insurance exchange or the expansion of Medicaid.State Health Insurance Exchanges as of April 1, 2013

So, we can group States on implementation by several types.

States that already had State-based or partnership exchanges: Massachusetts, Utah, Ohio, Iowa

States that produced health insurance exchanges in response to ACA enabling legislation and grants: Hawaii, Washington, Oregon, Idaho, California, Nevada, Colorado, New Mexico, Minnesota, Illinois, Arkansas, West Virginia, Maryland, Washington DC, Delaware, New Jersey, New York, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire

States in which health insurance exchanges were proposed by a Governor but rejected by a legislature or by referendum: Montana, Michigan, Missouri, North Carolina

State in which a State Insurance Commissioner proposed a State health insurance exchange which was not sustained by either the Governor or the Department of Health and Human Services: Mississippi

States which rejected creation of a State or partnership exchange without controversy: Alaska, Wyoming, Arizona, North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, Texas, Louisiana, Wisconsin, Indiana, Tennessee, Alabama, Georgia, Florida, South Carolina, Virginia, Pennsylvania, New Jersey, Maine

A few political realities can be inferred from this outcome:

1.) Democratic Governors and State legislatures were eager to embrace the Affordable Care Act, period:  Every Democratic Governor except the relatively-Conservative John Lynch of New Hampshire at least attempted to institute a health insurance exchange.  2 of these Governors were thwarted by Republicans–the now-retired Brian Schweitzer in the Legislature in Montana and Jay Nixon by a failed referendum in Missouri.  Governor Beshear in Kentucky was able to act on his own through executive order; on that note…

2.) Where institutional agency resides matters.

3.) The health insurance exchanges were the earlier State-based component of the Affordable Care Act to be implemented, and it brought fewer obvious benefits from the Federal Government than the Medicaid expansion; consequently, few Republican Governors felt compelled to join even if they were relatively pragmatic: Only 6 out of 30 States with Republican Governors–20%–have either State-run (Utah, Idaho, Nevada, New Mexico) or State-Federal partnership (Iowa, Ohio) exchanges.  Utah, Iowa and Ohio instituted exchanges or health insurance plan management agencies through pre-existing State offices, while the other 3 States created new exchanges.  It’s worth noting that in 2010 Idaho Governor C. L. Otter faced charges from his Democratic opponent that he was too ideological, while Brian Sandoval of Nevada and Susanna Martinez of New Mexico are both Hispanic Governors of States with large minority (particularly large Hispanic) populations and majority-Democratic State legislatures.  So, Republican gubernatorial buy-in to the health insurance exchanges was largely a function of a path of least resistance or greater political pressure to compromise.

4.) On health insurance exchange implementation, Governors were about as willing to play politics as State legislatures.  As I mentioned before, every Democratic Governor save 1 at least attempted to establish a State-based or partnership insurance exchange; in the case of Governor Maggie Hassan, elected in 2012 to replace New Hampshire’s retiring Governor Lynch, she used her election and her party’s massive victory in the State House elections that year to reverse her Conservative-Democratic predecessor’s decision to forego both a heallth insurance exchange and the Medicaid expansion under the Affordable Care Act.  The rump Republican majority in the State Senate, coming off an election that was even more disastrous for its party locally than it was nationally, has assured Governor Hassan of its cooperation.

5.) Barring implementation trouble with the new health insurance exchanges, which could just as plausibly be used as talking points against the Affordable Care Act, the picture of State and Federal health insurance exchanges depicted above is unlikely to change.  Unlike States which reject the expansion of Medicaid, which will clearly deny health care in aggregate to millions of the poor, a State’s failure to create its own health insurance exchange won’t necessarily have repercussions for its residents.  While a State-run health insurance exchange is likely to be more-convenient to use and will probably be governed differently, the handling of its functions by the Federal Government won’t necessarily lead to perceptibly-different service or the failure of the exchange itself.  (To an extent, this reality may depend on House Republicans’ efforts to deny funding to health insurance exchange implementation, but it may prove difficult either procedurally or politically to deny funding to implementation.)  As such the picture you see above of mapped variation in the creation of health insurance exchanges above is likely to stay with us.

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