Join our guest blog­ger, Stephanie Berry, as she unpacks state reac­tions to the removal of the ACA’s indi­vid­ual man­date. 

Stephanie is a Senior Leg­isla­tive and Pol­i­cy Ana­lyst based in Sacra­men­to, Cal­i­for­nia.

As we report­ed recent­ly, end­ing the penal­ty for indi­vid­u­als who choose not to pur­chase med­ical cov­er­age (the indi­vid­ual man­date) could fur­ther desta­bi­lize the indi­vid­ual mar­ket. How­ev­er, state pol­i­cy­mak­ers aren’t wait­ing for fur­ther fed­er­al action on the ACA — lead­ing to a notably active reg­u­la­to­ry year as states are tak­ing mat­ters into their own hands. Here’s a sum­ma­ry of activ­i­ty:

Weak­en­ing ACA reg­u­la­tions

Ida­ho unveiled a plan that open­ly defies the ACA by announc­ing ear­li­er this year that the state would allow health plans to be offered that don’t com­ply with the ACA’s reg­u­la­tions on pre-exist­ing med­ical con­di­tions, essen­tial health ben­e­fits, annu­al caps on ben­e­fits, and oth­er key tenets of the law. These plans, of course, would be quite a bit cheap­er than ACA plans and are designed to attract younger, health­i­er indi­vid­u­als. Because Ida­ho announced its inten­tion to skirt ACA reg­u­la­tions, the fed­er­al gov­ern­ment respond­ed that it would step in and enforce the law if the state fol­lowed through with its plan.

Sim­i­lar­ly, the Iowa leg­is­la­ture enact­ed a bill that allows non-ACA com­pli­ant plans to exist by cre­at­ing an exemp­tion for plans offered by the Iowa Farm Bureau, an asso­ci­a­tion that is meant to serve Iowa’s farm­ers. To pass fed­er­al muster these plans can­not be called health insur­ance and there­fore, can­not be reg­u­lat­ed by the fed­er­al gov­ern­ment or the Iowa Depart­ment of Insur­ance. It is like­ly that we will see oth­er states fol­low suit.

Estab­lish­ing rein­sur­ance pro­grams

Sev­er­al states have intro­duced leg­is­la­tion to cre­ate state rein­sur­ance pro­grams — a way for car­ri­ers offer­ing indi­vid­ual health insur­ance to get com­pen­sat­ed for cov­er­ing high health­care costs. While bills are mak­ing their way through the leg­is­la­tures in Louisiana, New Jer­sey, and oth­er states that would require the state to apply for a fed­er­al waiv­er, Mary­land has already enact­ed leg­is­la­tion that will sup­port a rein­sur­ance pro­gram by levy­ing a sur­charge on med­ical and den­tal car­ri­ers. This enact­ed leg­is­la­tion was designed to mir­ror the fed­er­al tax that was sus­pend­ed for 2019.

Impos­ing state indi­vid­ual man­dates

Final­ly, state leg­is­la­tures — par­tic­u­lar­ly those with state-based exchanges — are attempt­ing to impose their own indi­vid­ual man­date that would require indi­vid­u­als to main­tain health care cov­er­age or pay a penal­ty. Leg­is­la­tion has been intro­duced in Con­necti­cut, Ver­mont, New Jer­sey, Mary­land, and Wash­ing­ton, but cur­rent­ly, only New Jersey’s bill — AB 3380 — appears close to enact­ment, while the bill in Wash­ing­ton has already died. It remains to be seen whether these indi­vid­ual man­date bills will be able to gain more trac­tion this year or next.

Stay tuned for more health care pol­i­cy updates from Delta Den­tal, and get to know our pol­i­cy experts.

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