One of the unintended consequences of the Patient Protection and Affordable Care Act of 2010 (PPACA) is that the map of U.S. health and human service system has changed. The old adage that “all health care is local” (see BHN Reports: Gawande on reform — “All health care is local”) is increasingly the case.
First there was the original PPACA legislation, based on the Senate’s bill focused on state-run Medicaid programs. Then, there was the Supreme Court decision supporting the constitutionality of the health care reform bill as a whole (see Individual Mandate Stays – SCOTUS Puts State Medicaid Expansion In Play) – but making state participation in Medicaid expansion optional. In the aftermath of that decision, the U.S. Department of Health & Human Services (HHS) has granted state waivers for Medicaid expansion that are quite variable in many aspects – as a way of getting states to participate. This has created a system where the state health care markets are more different instead of less so – not a situation I would have predicted five years ago.
What is shaping the state markets is the level of adoption of the various provisions (see PPACA – Four Years Later, What Has Changed?) of the PPACA. As of January, ten states have implemented nearly all of the provisions of the PPACA, while five states have implemented none of the reforms (see 10 States Implemented Nearly All Health Reform Provisions & 5 States Implemented None). Additionally:
- 32 states and the District of Columbia took legislative or regulatory action on at least one market reform. Eleven states addressed all the reforms studied in this report.
- Seven states fully adopted and implemented all three major PPACA components; these states are Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, Oregon, and Vermont.
- Three states adopted and implemented most of the PPACA major components; these states are California, Colorado, and New York.
Of the provisions, the one that has the greatest effect on the state market is Medicaid expansion. We now have 53% of the population living in 27 states with Medicaid expansion (see Health Care Reform Update: State Medicaid Expansion Calculus). The current map of Medicaid expansion is:
- 27 states & the District of Columbia are expanding – Arizona, Arkansas, California, Colorado, Connecticut, Delaware, D.C., Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Rhode Island, Vermont, Washington, and West Virginia.
- 19 states are not expanding – Alabama, Alaska, Florida, Georgia, Idaho, Kansas, Louisiana, Maine, Mississippi, Montana, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Wisconsin, and Wyoming.
- 5 states are still deciding – Indiana, Missouri, Pennsylvania, Utah, and Virginia.
Another variable in the state health care market is the operation of the health insurance marketplaces – which give individuals and small businesses a central location to compare and purchase insurance. Open enrollment in the marketplaces began October 1, 2014 and closed March 31, 2014. As of April 1, the White House is reporting that 7.1 million people have signed up for insurance through the marketplaces (see More than 7 million have enrolled under Affordable Care Act, White House says). States have three options when it comes to operating the health insurance marketplaces: state-run marketplaces; joint state- and federally-run marketplaces; and federally-run marketplaces in which the federal government operates the marketplace for states that opt not to. States made their selections and proposals last year:
- State-Run Marketplaces – There are 17 state-run marketplaces: California, Colorado, Connecticut, District of Columbia, Hawaii, Idaho, Kentucky, Maryland,
Massachusetts, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington.
- Joint-Run Marketplaces – There are six joint state- and federally-run marketplaces: Arkansas, Delaware, Illinois, Iowa, Michigan, New Hampshire, West Virginia.
- Federally-Run Marketplaces – There are 27 federally run marketplaces, all centered on the healthcare.gov website: Alabama, Alaska, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana, Nebraska, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming.
Last but not least, another major variable of the PPACA is the creation of new state options to change and enhance Medicaid services to chronic care populations without a waiver. Waivers remain required if a state seeks to place caps on services, use waiting lists, or adopt geographic restrictions (see Keep Your Eye On The Changing Role Of Medicaid Waivers). But, beyond that framework, states have much greater flexibility in the design of their Medicaid plans. There are currently 355 waivers listed as “current” by CMS on its Medicaid.gov.
This shifting state-by-state market landscape raises many strategy questions. Will variability between states make it difficult for national insurers or national service provider organizations to operate? Will non-profit organizations in non-Medicaid expansion states reduce their “safety net” services as funding shrinks? What is the future of community hospitals in those non-expansion states? Will consumer movement from state to state to seek better health care benefits and services increase?
We’re not sure of the answers to these very fundamental questions – but we’ll keep you posted.