Healthcare Reform: States' Lawsuits Could Push Up Medical Costs
"Beware of what you wish for": That could be the swan song of state attorney generals and governors who ask the courts to overturn a key part of the Affordable Care Act. If they succeed in that goal, they might find that they hurt their own states' efforts to reduce soaring health costs.
Of the 20-plus states suing the federal government over the individual mandate in the health care reform legislation, all but Alaska and Minnesota have accepted $1 million federal planning grants for implementing state insurance exchanges in 2014. The recipients are either assessing the feasibility of the exchanges or are moving ahead to adopt the laws, regulations, and infrastructure need to establish them.
Meanwhile, a commission established by Governor Bob O'Donnell of Virginia -- whose attorney general just got a federal judge to oppose the reform law -- has recommended that the state move quickly to comply with the federal legislation. The commission also advises Virginia's government to boost the number of healthcare providers and to establish an "innovation center" to improve the quality of chronic disease care. The need for reform is urgent, the commission says, because health costs are growing faster than incomes and the quality of care in the state is "mediocre."
Ironically, the state's effort to overturn the law could backfire on its reform plan if the Supreme Court eventually upholds the decision by U.S. District Court Judge Henry Hudson that the individual mandate is unconstitutional. In that case, the future Virginia insurance exchange will be unable to attract the mix of healthy and sick people necessary to make it financially viable.
Virginia Health and Human Services Secretary Bill Hazel, who heads the reform panel, says that the state can devise a program that fits with Virginian "values," regardless of what happens to national reform. But it's equally clear that most states can't make much progress on their own. Without federal funding, for example, the planned Medicaid expansion is dead in the water.
Among the other states that have sued the government to block the reform law, a few are pretty far along in planning or implementing insurance exchanges. For example:
- Colorado is holding community forums around the state to solicit suggestions about how to set up the state exchange, and state officials have said they believe it will make insurance more affordable.
- Utah's legislature in 2009 directed the state to develop a web portal to help consumers choose health insurance. Last March, the lawmakers allowed insurance companies to participate in the online exchange; next year, small businesses will be able to buy insurance there, but aren't required to.
- Washington State in 2007 set up an insurance exchange similar to Massachusetts' Connector. The state helps small firms with low-wage workers administer health benefits and also provides insurance subsidies to individuals who earn less than 200 percent of the federal poverty level.
Image supplied courtesy of Wikimedia Commons.
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