Keeping innovation in health care

Keeping innovation in health care
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Senate Democrats are trying to remove choice and flexibility from health care and state health insurance markets. This time they hope to force a vote under the Congressional Review Act to rollback Trump administration reforms that have allowed states to expand affordable health insurance options for their citizens.

The Affordable Care Act — as originally intended — permits state innovation or “section 1332” waivers so that states may propose alternative ways to offer health insurance. As their name suggests, innovation waivers allow states flexibility to innovate and think creatively in designing health insurance programs and protocols that will meet the needs of their constituents. 

The waivers, of course, must be approved by the Department of Health and Human Services, and must satisfy federal requirements for affordability, deficit neutrality, and coverage, but they give states a way out of the one-size-fits-all approach otherwise imposed by the Affordable Care Act. 

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The Obama administration issued hyper-restrictive guidance interpreting the section 1332 waiver provisions and ignored bipartisan requests from governors across the country seeking more flexibility. The Obama-era guidance effectively shut down innovative alternatives and required states to offer only insurance rife with expensive federal mandates and burdens. 

The crabbed view of innovation waivers taken by the Obama administration seemingly raised the price for health insurance and made it ultimately unaffordable for many of those that the ACA seemed intended to help.

Many families insured under the ACA exchanges have been paying high premiums with high deductibles to the point that they have been fleeing the insurance markets altogether. According to recent Census Bureau statistics, families that are not heavily subsidized by the government have been dropping their health insurance and joining the ranks of the uninsured.

New guidance from the Trump administration sought to stem that tide by returning the power of innovation to the states and once again allowing them to propose creative ways to make comprehensive health insurance more affordable and a better value to more families. 

Under the new guidance, the Trump administration carved new paths for states to create better health-care alternatives. States may now help create and fund health savings accounts, for example, or let people use their premium subsidies to buy alternative insurance plans that offer benefits different from the ACA mandates. 

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Broad flexibility for state-based innovations can reduce health-care costs and increase coverage. Seven states are already using waivers to help mitigate the types of risks that can increase health insurance premiums for everyone. Those states saw their average premiums decline and enrollment increase as health insurance became more affordable. Not surprisingly, more states plan to follow their lead in 2020.

Opponents of the new guidance appear to be against innovation, flexibility, savings, and more affordable health insurance plans. They want to use the Congressional Review Act — a law that allows Congress to repeal executive rules—to retract the new rules and return to the cookie-cutter, Obama-era guidance that had made health insurance under the ACA unaffordable. Such a retreat would be a mistake. 

Executive and legislative policymakers should continue to allow states the flexible creativity to design and offer better health insurance plans to their citizens. The Trump administration has heard the states’ cries for relief from the myopic, Obama-era directives and has answered. 

The ACA intended state innovation waivers to encourage states to find better, affordable, well-suited options for health insurance. It seems that the Obama administration’s rule-making deprived us all of that intention. New guidance from the Trump administration has restored what Congress originally had in mind. So, it is not without irony that congressional Democrats seem poised to use the Congressional Review Act to undo what a Democrat Congress did.  

Rea S. Hederman Jr. is executive director of the economic research center and vice president of policy at The Buckeye Institute in Columbus, Ohio.