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States Still Trying to Figure Out Individual Health Care Approaches

Health Care Reform and Policy
by Brian Stentz
What options do people have when they lose health insurance?
What options do people have when they lose health insurance?

One of the biggest issues in health care these days is that while there's an overarching federal law, many states choose to go above and beyond those rules, creating a regulatory patchwork with which is difficult for industry participants to grapple. The general feeling among these states is federal health care rules - which have been rolled back to some extent in recent years - do not do enough to ensure everyone has access to high-quality, low-cost coverage and care.

To that end, many states are not simply resting on their laurels when it comes to tinkering with ways to ensure a larger share of their residents have at least some kind of health insurance. Numerous states have tried to set up public options for health coverage, meaning residents would be able to purchase health insurance through programs administered by the state government. Of late, a number of states have tried to pass such legislation only to have it fail in committee or not garner enough support to be signed into law, largely due to concerns over the cost of administering the programs.

But more recently, some states have been able to enact these kinds of changes to one extent or another. Washington, for instance, passed a full public option in which residents can enroll, and Connecticut is working on an initiative that would allow workers at small businesses within the state to be covered through the health insurance system used by state government employees.

The legislative successes - which currently only allow these programs to be created, and they're far from being up and running as it currently stands - seem to be encouraging even more activity in other states.

Another state joins the fray
In mid-May, Colorado Gov. Jared Polis signed such a bill as well. It started in Colorado's House of Representatives but was quickly approved by the state's Senate and signed into law weeks later, and requires the Colorado Division of Insurance and the Department of Regulatory Affairs to begin the work of setting up a public option, with initial details on the effort to be ready before the end of the year. The report would look at not only what the program will cost, but also the ways the state could fund it, who would be eligible and which departments would administer the program.

One area of funding that is unlikely to come to the fore is through state tax increases or new fees, but rather through premiums enrollees would pay to the state and funding from the federal government (if approved). It's unclear what coverage through Colorado's public option would actually cost, but estimates show residents who sign up for public coverage could save quite a bit; Colorado has some of the highest health insurance premiums in the country.

It is not currently clear when the program would actually be ready to start providing insurance coverage to Coloradans, especially because the plan will have to be approved at the federal level before it could be enacted. However, optimistic readings suggest enrollment could start in late 2020 for coverage beginning at the start of 2021.

Washington not done yet
In addition to signing a public option into law, Washington is further looking to help consumers cut their health care costs as they age. Also in mid-May, Gov. Jay Inslee signed the Long Term Care Trust Act into law, which will help defray some costs associated with certain costs. The law creates a fund from which residents can draw to fund health care related to everyday living. 

Unlike the Colorado public option, the bill does introduce a new tax, at 0.58% of income - 58 cents for every $100 earned - that every state resident pays into. After 10 years of such contributions, residents are able to withdraw as much as $100 per day to cover costs, with a lifetime limit of $36,500 in benefits (the equivalent of a year of withdrawals). The length of required contributions drops to three years for those who become disabled.

With Washington as a model, other states are considering similar measures for their own residents.

Maryland simplifying enrollment
One of the big hurdles to making sure Americans are covered by at least some form of health insurance is enrollment is often a difficult or confusing process. To that end, Maryland may have just come up with a critical innovation. Gov. Larry Hogan recently signed a bill that allows state residents to request enrollment in a state insurance program right on their state tax returns, simply by checking an appropriate box.

That information will then be forwarded to the state's existing insurance exchange - Maryland Health Connection - which will then determine if the taxpayer is eligible for free or reduced-cost coverage, and those who qualify for Medicaid will be automatically enrolled in that program. The hope is that thousands or more state residents will have a much easier time finding coverage that works for them as a result of the easier enrollment system.

With all these changes afoot, it's important for those in the health care and health insurance sectors to keep a close eye on how rules will change in the states where they operate. Even relatively minor alterations to current rules and regulations could present a sea change for industry participants.



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