Last week’s decision by the Supreme Court to hear King v. Burwell understandably alarmed Affordable Care Act proponents. A ruling for King would remove the law’s premium subsidies from millions of individuals, dramatically reducing the extent of coverage expansion in 36 states that have not established their own exchanges. But those concerned by this possibility should have been worried anyway.
Though coverage rates would certainly be lower in states where residents had no access to health insurance subsidies, it was already depressed in many of the same states at risk in the King case. As illustrated by Kevin Quealy and Margot Sanger-Katz, across the states, there is wide variation in coverage rates and how much they fell after the Affordable Care Act. In the states that did not establish exchanges and whose residents would be most affected by King, coverage rates are much lower than elsewhere.
For instance, Mississippi has the second highest uninsurance rate in the country, just behind Texas, with more than one in five adults uninsured. There, a Republican governor strongly opposed the Affordable Care Act, its Medicaid expansion, and the establishment of a state exchange. According to Gallup, the rate of uninsurance for adults dropped only by 1.8 percentage points when the coverage expansion provisions of the Affordable Care Act went into effect in 2014.
Contrast that with Massachusetts, which, with great support from government officials and local businesses and organizations, implemented a law similar to the Affordable Care Act in 2007. There the uninsurance rate fell, by some measures, from double digits before the state law to below four percent after.
Several factors contribute to variations in state responses to the Affordable Care Act. Political support matters, and that support is far from uniform. In states with populations more favorable to Republicans, the law and its exchanges and Medicaid expansion are more vigorously opposed than in states that tend to elect Democrats. This parallels a finding from my own work with Steven Pizer of Northeastern University. Enrollment in Medicare’s prescription drug program was higher where the population was more favorable to President George W. Bush, whose administration championed and passed the law that implemented it. Recent work by University of Washington scholars suggests that uninsured individuals who view Democrats and President Obama less favorably also may be less likely to sign up for coverage.
A 2012 ruling by the Supreme Court also helped depress coverage by reducing the negative consequences for states that refused the law’s Medicaid expansion. Following that decision, in 2014, 24 states did not expand their programs. These decisions left an estimated 3 million low-income Americans uncovered, some in America’s poorest states. Nearly all states that have not expanded Medicaid are led by Republican governors or have Republican-dominated legislatures.
The vast majority of states not expanding Medicaid have also chosen not to implement a state exchange and are relying on the federal government to do so. Though there are practical reasons why a state might not want to invest the effort to develop its own exchange, in many states Republican leaders’ decisions not to was a signal of defiance against a law they found distasteful.
If King prevails, then law and politics align. States that do not welcome the coverage expansion law and the federal support that accompanies it can effectively be rid of it, by not expanding Medicaid and not establishing an exchange. Perhaps such an outcome would more forcefully encourage those favoring coverage expansion to fight not about implementing the law but about how to modify it to move recalcitrant states’ politics and cultures to wish to do so. As Bill argues, those hoping to reduce uninsurance in those states will need to come up with solutions that are politically palatable to them.
But even if the Supreme Court does not remove subsidies for states relying on the federal exchange, many of those states are likely to have high rates of uninsurance anyway. The existence of a coverage expansion law, even one with subsidies and a mandate, does not itself cause a dramatic drop in uninsurance that makes Mississippi look like Massachusetts. It’s not merely a matter of law but of culture and politics, which are local and highly varied. So, coverage expansion advocates have work to do regardless of how the Supreme Court rules.
Progressives wishing to reduce uninsurance in states resisting the ACA should consider increasing the flexibility states have to implement the law. Two suggestions come to mind. First, in 2015 the Secretary of Health and Human Services will reconsider what constitute essential health benefits — those required to be offered by all plans by small businesses and in the individual market. Currently, states are provided some flexibility in defining required benefits, basing them on one of several possible types of plans that had existed in each state in 2011. The Secretary could permit even greater flexibility, allowing states to weaken requirements below those levels. This would reduce premiums — something many would welcome — but also lead to plans that leave out benefits some might consider essential.
Second, according to the law, in 2017, states will be permitted to experiment with different ways of expanding coverage — under state innovation waivers — provided those ways are no more costly to the federal government and individuals and cover as many people. Congress could act to move this date earlier. After all, states where the Affordable Care Act is resisted may be playing a waiting game, knowing state innovation waivers are on the horizon. It’s reasonable to consider permitting them to innovate sooner rather than allow millions of people to go uninsured as we wait until 2017.
Congress could also act to permit even greater flexibility in innovation waivers. It could, for example, allow greater cost sharing or higher per-person costs to accommodate larger physician fees for Medicaid patients where access is found to be inadequate. To be sure, each of these comes with higher costs to individuals or government. But are those limitations worse than those that accompany states’ staunch resistance to the Affordable Care Act’s standards?
Mississippi may never be like Massachusetts. But what would it take for its Republican, elected officials — and those in other states — to embrace a coverage expansion closer to what many Democrats and Affordable Care Act proponents envisioned? The Supreme Court won’t rule on King until next summer, but this is a question both progressives and conservatives should ask themselves today.