Delay, Dependence, Defiance: Wyoming struggles with the Affordable Care Actby Ron Feemster
State legislators are calling it a near certainty that by January 2014 the citizens of Wyoming will be choosing among private health insurance plans offered in an online health insurance exchange run by the federal government.
Such a federal plan was not the only option available to the state when President Barack Obama signed the Affordable Care Act into law in March 2010. The state could be making plans to run its own health insurance exchange or to partner with other states.
But legislative delaying tactics and, equally important, changes in the federal government’s rules for states using grant money to study the ACA law, have slowed the early stages of the planning process so much that Wyoming now lacks the time and information to develop alternatives to a federally run system.
“If the political climate remains the same, the state of Wyoming will have a federally facilitated insurance exchange in January 2014,” said Rep. Elaine Harvey (R-Lovell) after a meeting of the Joint Labor, Health and Social Services Committee in Lovell last week. Harvey co-chairs the committee with Sen. Charles Scott (R-Casper).
According to healthcare.gov, a federal website to guide consumers through the Affordable Care Act, health insurance exchanges will “provide individuals and small businesses with a ‘one-stop shop’ to find and compare affordable, quality private health insurance options.”
The ACA seeks to accomplish this goal with a system of online insurance exchanges, transparent marketplaces where consumers can compare plans offered in their state based on price, benefits, participating doctors and so on. Insurance providers will be required to compete openly and consumers will be required to purchase health insurance. But buyers making less than 400 percent of the federal poverty-level income (about $92,000 for a family of four) would receive federal subsidies for at least part of the premium costs.
If that might sound like a step forward for some of the 80,000 Wyoming residents who are currently without health insurance, Harvey and other legislators say the insurance exchange concept will work poorly in a rural, sparsely populated state where many consumers and small businesses choose low-benefit policies, often with high deductibles.
The benefits required by law in Wyoming will become more generous under ACA guidelines — adding mental health, among other required coverage — so the cost of the most basic policies available under the ACA would be higher than many standard policies available in the state today, at least before subsidies. Even at the highest deductibles, insurance premiums are expected to rise sharply for many Wyoming residents.
All potential Wyoming insurance shoppers do not share the assumption that more benefits are better, Harvey contends. If a small entrepreneur is seeking health insurance his needs might not coincide with the new ACA offerings.
“The whole idea behind insurance is to protect your assets,” Harvey said. “And so [under the ACA] you can’t buy a high-deductible catastrophic plan that will keep you in your home and keep you from losing your car while you make widgets. Everybody has to buy everything. The plans all have to be certified, and to be certified they have to contain the 10 benefits the federal government prescribes.”
Of course some young entrepreneurs hope the ACA will be a way of getting a high-quality healthcare plan at a lower price than is currently available.
Nick Grenoble, 25, a teacher from the Boston area, quit his job and moved to Jackson to found a start-up, Teton Educational Services. He says he dared to take the step in part because he was hopeful that the Affordable Care Act would allow him to be insured.
Grenoble has insurance under his father’s plan until he turns 26 in a few months. “That was a benefit of the Affordable Care Act. It was a safety net that allowed me to build my business.”
Grenoble says the Jackson area is full of young educated people who struggle to pay for healthcare. “I am unwilling to be uninsured, especially because of my active lifestyle. My hope is that the legislature will change course. I think an exchange would make healthcare more affordable and equip us with more information about healthcare providers.”
An insurance exchange must by federal law be self-sustaining. To pay for it, the state would likely either tax the insurance companies or impose a monthly user fee on consumers, which Harvey estimated at about $11.50 per covered person in her presentation to the committee in Lovell last week. Both strategies would raise the effective cost of insurance, she said.
A few legislators see the ACA as such a poor fit for Wyoming that they are seeking ways around the law. Suggestions range from participating in health insurance “compacts,” which are privately run health insurance exchanges, such as Texas and Oklahoma are planning as an alternative to the ACA, to simply defying some aspects of the ACA law.
Some states will “choose not to participate” in the insurance exchange system, said Sen. Charles Scott (R-Casper). “The law is that the feds will [run insurance exchanges if the states don’t]. But I think they’re going to find that somewhere in the vicinity of a third to a half the states refuse to participate. That’s my guess from listening to some of the people from the other states.”
Scott also doubts that the federal government will be able to afford to follow through on its promises in the ACA. “If I thought those subsidies were going to be available, I might feel differently about exchanges,” he said. “I don’t think they will be because I don’t think the Feds can afford them. Their deficit problems are just too big.”
Not everyone on the Joint Labor, Health and Social Services Committee believes that a federal exchange causes insurmountable problems.
“I don’t think Wyoming citizens have anything to fear from a federal exchange,” said Sen. Leslie Nutting (R-Laramie). “If we try to do something with more of a Wyoming flavor, we will end up spending a lot of Wyoming money and not do much better. Our state exchange would have to meet so many federal requirements that it would not differ very much from the federal exchange anyway.”
Anne Ladd, CEO of the Wyoming Business Coalition on Health, noted that Wyoming does not have managed care, which makes setting up an exchange more difficult. But she is strongly in favor of an insurance exchange.
“The market would aggregate buyers and work with the system to reform it,” Ladd said. “Which comes first, the chicken or the egg? Does the system have to be organized first before you aggregate the market? Or if you aggregate the market, can the market work with the system to pay differently, so the system functions better?”
But at the meeting in Lovell, legislators discussed alternatives to exchanges, even speculating on the possibility of introducing a state bill that would forbid state agencies from cooperating in any way with the federal government in implementing the ACA. But one of the biggest roadblocks to developing a strategy for implementing or even evading the requirements of the new law is a law passed by the legislature itself.
A health insurance exchange steering committee co-chaired by Harvey and Sen. Bill Landen (R-Casper) began studying the ACA and exchanges using money from a federal planning grant in 2010. Under Senate File 58, passed during the 2012 session, the state said that no person, organization or department could commit the state of Wyoming to enact a portion of the ACA before April 1, 2013. This guaranteed that the state would be able to consider final proposals in a full legislative session.
An amendment to the bill said that the steering committee could not spend any money or continue any studies until after the Supreme Court decision on the constitutionality of ACA, which was expected and occurred in late June of this year. Many in Wyoming’s government, including Gov. Matthew Mead, expected the Court to strike down the ACA. At that point, the steering committee voted to stand down.
The committee returned about $200,000 left on its federal planning grant, which expired March 31. However, by the time the Supreme Court upheld the ACA in late June, the rules for federal planning-grant money had changed. Instead of handing out ACA research funds with no strings attached, the federal government was now awarding planning grants specifically for the development of health insurance exchanges. But the committee could not, under Wyoming law, commit to developing a health insurance exchange. So the committee could not apply for an extension and has not been able to commission any further studies.
What was left in the budget was $25,000 that could have been used to stage a symposium on health insurance compacts or for legislative travel to conferences about the ACA and related issues. Landen, Harvey and two other legislators on the steering committee have attended conferences around the country, including two meetings held in Denver by the Department of Health and Human Services (HHS).
“That was probably the most frustrating experience I’ve ever had,” Harvey told the committee in Lovell. At a meeting two weeks ago, Harvey said, the HHS would not allow representatives to ask questions from the floor, requiring them instead to write then on 3×5-inch cards and pass them to the front, where officials chose which questions to answer. “The answer to most of the questions they decided to entertain was, ’That is a very good question and we will get back to you on that.’” So far, Harvey is still waiting to hear from HHS.
“We are bound by federal guidelines and deadlines with no ability to study the consequences of decisions and budget commitments we are making to the federal government,” Harvey said.
The steering committee is not alone in its frustration. On July 17, Gov. Mead wrote a letter to Health and Human Services Secretary Kathleen Sebelius, posing detailed questions about how the new federal law would work. He asked for specific information about what it would cost for states to participate in the federal exchange, and also asked how the new exchange system could increase competition in a state like Wyoming, which has little managed care and few competing providers to compare in an online exchange. This information was necessary, Mead wrote, because federal guidance was required in order to determine if state laws must be changed.
As of WyoFile’s press time, Sebelius had not replied to Mead.
WyoFile did not have much better luck speaking with HHS than Mead or Harvey. Erin Shields Britt, a spokeswoman at HHS, insisted immediately on speaking off the record or not at all, which means that her remarks cannot be printed here. She explained that everything reporters need to know is on the HHS website. After repeated calls and e-mails asking why the agency had not yet replied to the governor, she emailed a statement on the record.
“We look forward to responding to the Governor and we take seriously the feedback from all of our partners in implementing the health care law. In the more than two years since the ACA became law, HHS has been working together with states around various aspects of implementing the law and already 13 states have said they are moving ahead to build state-based exchanges.”
But not Wyoming, for better or worse. Many in the state legislature, and presumably many Wyoming citizens, are hoping Republican victories in the Presidential and Congressional elections this fall could derail the ACA. But no matter what happens on Nov. 6, the state will miss a Nov. 16 deadline to file a plan about its intention to create a state exchange.
Mead is also wrestling with budgetary issues related to an ACA mandated expansion of Medicaid in the state. Although the cost of treatment will be covered by the federal government, the state must ramp up its enrollment mechanisms and deal with an expected increase in demand for services because of pent-up demand.
He also asked about the rules for shrinking the pool of Medicaid-eligible patients when he wrote to Sebelius.
“It’s hard for us and hard for me to make decisions when we can’t get answers to what I thought were fair questions of the secretary,” said Mead. “Whatever your perspective is on the ACA, you should at least recognize that it’s a big enough deal that in fairness to Wyoming and all states, we’re entitled to answers on these questions.”
For Harvey and other members of the steering committee, one of the greatest frustrations is not being able to pay for more research.
“I wanted more actuarial studies,” Harvey said. “I wanted to say what if we totally defy the federal government and we have the mandates that we have and we chose insurance plans similar to the state employee health plan and some of the more common business plans from the small individual market? Why can’t we set up our own exchange based on the values we’ve already established in Wyoming, and defy the federal government?”
Both Harvey and Scott gave one more overriding reason to be skeptical of moving forward too fast with the ACA.
“A major portion of our population is violently opposed to it,” Scott said. “I asked people about a lot of things, but when people volunteered comment, that was what they volunteered.”
Harvey concurred: “They say, ‘Keep us out of it.’”
Cheyenne journalist Bill McCarthy contributed to this report.
Click here to read the Wyoming Department of Health’s second report on Medicaid options for the state.
Click here to read the Wyoming Department of Health’s Medicaid Cost Study Update.
Click here to read Marilynn Tavenner’s letter to Gov. Robert McDonnell.
— Ron Feemster just finished two years as a Visiting Professor of Journalism at the Indian Institute of Journalism and New Media in Bangalore, India, and previously taught journalism at Northwest College in Powell. He has reported for The New York Times, Associated Press, Newsday, NPR and others.
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