What states can do even without the mandate
U.S. Supreme Court.
April 4th, 2012
02:43 PM ET

What states can do even without the mandate

Editor’s Note: Joan Henneberry is a principal at Health Management Associates,  an independent national research and consulting firm specializing in complex health care program and policy issue. Previously, she served as the Planning Director for Colorado’s Health Insurance Exchange in 2011.

By Joan Henneberry - Special to CNN 

For many waiting for the Supreme Court to decide on the fate of the Affordable Care Act (ACA), the wait may be worse than the outcome. Uncertainty has paralyzed some state officials and engendered a sense of desperation in others.

But delaying key policy and program decisions puts states at risk of not meeting the ACA’s 2014 implementation deadlines and, worse, of missing out on options available to them right now.

The ACA offers avenues for improving health care even in the absence of the individual mandate by bringing efficiencies into the healthcare system, bending the cost curve, and improving overall customer experience.

Here are some things states can do to reform health care even if the mandate is struck down:

Implement service delivery and payment reforms

States have been experimenting with Medicaid managed care approaches for decades. Essentially, plans take the full financial risk of paying for care even when people need high-cost care or hospitalization. States have had mixed success with these models in terms of client satisfaction, outcomes, and cost.

The Center for Medicare and Medicaid Innovation, established by the ACA, is giving states and communities the opportunity to pilot new models of care that will transform the health care system. States will continue to move away from fee-for-service arrangements, replacing them with accountable care organizations, community-care organizations, managed care plans, or some other entity.

The ACA gives states additional tools to integrate and pay for care differently, especially for the most expensive and vulnerable populations. In some cases, the federal government picks up a greater share of the cost when there is better coordination of care and use of home and community-based services.

With new financial and policy support from the ACA, states are redesigning care and payment models for dually eligible individuals - people who receive both Medicare and Medicaid benefits.  This population has the greatest needs and costs the most to serve - 9.2 million people at a cost to the states and federal government of $300 billion annually.

Federal encouragement and support to coordinate care between Medicare and Medicaid is long overdue.  All states should explore the opportunities in the ACA for higher federal reimbursements and the flexibility to integrate primary care and long-term care services.

Use of health information technology

Providers and systems of care need modern tools to communicate. States can support the development of health information technology and health information exchange infrastructure through direct grant making, policy and rule making, and designating a statewide entity to coordinate efforts.  Confidentiality and protections for consumers are paramount, and states can oversee those protections while simultaneously ensuring that appropriate clinical information is exchanged.  The initial funding for electronic health records came from Recovery Act, but the ACA provides new incentives for widespread adoption of these communication tools.

Public health data collection and reporting should also be connected to health data exchange efforts so local health systems’, communities’, and states’ efforts to improve wellness and the population of the community can benefit.  States have policy, regulatory, and financial incentives to ensure that providers and consumers can use data to improve health and health care.

Wellness and prevention

The Affordable Care Act provides funding and guidance for states to focus on population-based health care initiatives. With or without the mandate, states should continue to seek federal funds and invest state general funds in public health initiatives that ensure people receive the education and interventions needed to improve the health of the community: immunizations for adults and children; tobacco prevention and cessation; obesity prevention and intervention; family planning and the prevention of unwanted pregnancies along with adequate prenatal care; and management of chronic illnesses for people already diagnosed.

Health insurance Exchanges

State Health Insurance Exchanges are a key part of the health reform package that could function without a mandate. The purpose of an exchange is to provide a single point of entry for small business and individuals to buy coverage. Consumers select among competing insurers offering standardized products. Information about quality is provided so consumers can make wise choices about the relative value of the products being offered, thereby forcing insurers to compete on price and quality.

Previous efforts to establish exchange-like entities have nearly all failed. They couldn’t attract enough buyers, and they suffered from adverse selection. The ACA addresses both of these problems by requiring that everyone receiving a subsidy must purchase through a certified exchange and by requiring insurers to offer the same prices for products offered inside and outside the exchange. As long as these two conditions remain in force, and subsidies are available, exchanges can help to improve market performance and access.


States face the brunt of the direct implementation of the Affordable Care Act. If the Supreme Court rules that only the individual mandate is unconstitutional but the rest of the ACA stands, including the expansion of Medicaid to another 17 million individuals, states will continue to do what they’ve been doing for almost 30 years - that is, develop ways to serve their uninsured residents, with or without federal assistance.

But states hit a tipping point during this last recession.  They just cannot continue to expand services, add more individuals to Medicaid, pay rising costs, and respond to market and consumer demands without the federal dollars that are available through the ACA. The policies and programs in the ACA are important cornerstones, but the availability of federal funds will determine how far states can go to reform health and healthcare.

The views expressed in this article are solely those of Joan Henneberry.

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Topics: Health • Law

soundoff (38 Responses)
  1. Jittu Sarna

    CONGRATULATIONS. , on a well deserved recognition and award from Peabody.
    Your program , team and you simply rock.
    Keep up the great work y'all do.

    April 4, 2012 at 6:59 pm | Reply
  2. Pete

    Shambala,take your middle eastern babble somewhere else .Like the mountains of Mars,ya idiot...

    April 4, 2012 at 10:39 pm | Reply
    • Flavia

      Have you gone to the doctor lalety? Would you have the money to pay the hospital if you were seriously injured in an accident? Or contracted a disease? Or got cancer?That's why people buy health insurance: to protect themselves and their assets from medical costs. Did you know the most common cause of bankruptcy is medical bills?Ask your parents.

      July 13, 2012 at 12:30 am | Reply
  3. Pete

    These mandates don't help individual states,because most states adhere to the minimum requirements set by Medicaid which is a block grant Federally dispersed.Most states don't use alloted grants except in areas that are heavely burdened by the immigration explosion.Mostly southern and western states share this dilemma in todays economy.But if the ACA mandates are overturned,an explosion in Medicaid enrollments will be seen because of the escalating cost of the deregulated free market healthcare insurers,being felt nationwide by everyone.

    April 4, 2012 at 10:51 pm | Reply
  4. j. von hettlingen

    The opponents of the ACA can't deny that the current system needs reform. Yet there are deep differences over what changes are needed and how to implement them. There are republicans who argue that the reform will make healthcare "more bureaucratic and expensive". There are also some Democrats who are unhappy with the proposed changes, either they go too far or do not go far enough. This issue will divide the country for a while.

    April 5, 2012 at 5:11 am | Reply
    • Omaira

      The purpose of any type of ianurnsce is to protect against catastrophic loss. Using health ianurnsce as an example, most everyday medical expenses are not very expensive (a physical exam averages $150.00+/-), but if you are admitted to the hospital for an emergency your medical bills would be in the tens of thousands of dollars at a minimum. If you do not have ianurnsce you self-insure againts that potential catastrophic loss. Without ianurnsce, the average person would face financial ruin if faced with a major loss.

      July 11, 2012 at 2:12 am | Reply
  5. Health Insurance Exchange

    Regardless of the final outcome on PPACA, we still have to reform the medical care delivery system and make health insurance affordable. We can do this by allowing states to experiment, focusing on practical solutions and supporting programs that are proven to reduce the cost of medical care. Thanks, for advancing that conversation.

    April 5, 2012 at 8:44 am | Reply
  6. joe anon 1

    remove "over 65" from medicare and make medicare ulniversal single payer.
    screw the insurance companies.

    April 5, 2012 at 1:15 pm | Reply
  7. Jim Jones

    Great article, Ms. Henneberry. Additionally, if the individual mandate in the ACA is struck down by the Court, but leaves the Medicaid expansion, states will need to be implementing new or upgraded eligiblity and enrollment IT systems as required by the ACA and by the final fedearl rules that can handle real-time (or near real-time) eligibility determinations through a web portal that provides a first-class user experience. Many states, many with systems that are 30+ years old, are working in this direction already, thanks to the 90% federal funding provided through the end of 2015. The ACA provided CMS with the vehicle to require states to create IT systems that are easier to implement, upgrade and change and that provide a much better customer experience at a lower cost per case for states.

    April 5, 2012 at 1:15 pm | Reply
    • Linda

      Pretty simply hetalh care is more than extremely expensive. Just routine testing which should be done on a yearly basis is very necessary in preventative care and at the same time very expense without hetalh care insurance coverage. I work in a Laboratory and do the billing. It's incredible! Even if you have a hetalh care plan that requires such things as deductibles and co pays and employee contribution, it still is worth every penny when you are ill and need medical treatment. Of course there are a ton of variety of plans out there that cater to different needs. Therefore it is always wise to do your research if your employer gives you options in hetalh care plans to choose from.

      July 10, 2012 at 9:58 pm | Reply
  8. Joe Sixpack

    We don't need the individual mandate, just stop funding all the needless wars and bases in 100 countries and use that money at home to help the citizens and taxpayers who need it.

    April 8, 2012 at 2:55 pm | Reply
  9. enkephalin07

    I'm for including Romney's plan; vulture capitalist language notwithstanding it's a good idea. You should be able to shop your contract and account around if your health insurance isn't providing as promised, giving obstructive costumer service or arbitrary new requirements or costs, or if you want to expand coverage and they aren't giving you as good a deal as a new customer. Your health shouldn't be at the mercy of the insurance provider just because they're holding everything you paid into them, you should be able to take it all out of their hands and offer it to someone who'll treat you fairly.

    April 9, 2012 at 6:08 pm | Reply
  10. Bob

    All good suggestions, however one issue in my mind that is not being addressed adequately is reducing complexity of healthcare offerings. If you have ever had an elderly parent who was not well and needed to make healthcare policy decisions you understand the issue. The ill and very elderly (and even the healthy and young) often have problems understanding what is being offered and what is being excluded and the costs. More options are in my opinion not the answer but part of the problem as many elderly do not have anyone to help them with these decisions.

    April 10, 2012 at 10:26 am | Reply
  11. Timmy Suckle

    I kissed my way up to VP at a health insurance company. Now I take over $500,000 of your health care dollars for NO VALUE ADDED to your health care. And that’s just me. Now think about how many other VPs, Directors, Managers, etc. are at my company alone. Now multiply that by thousands of others at hundreds of other health insurance companies. From 10 to 25% of your health care dollars go towards administration that adds NO VALUE to your health care. But my company’s PAC dollars will continue to fool you little people into thinking that a single payer system will be bad. Little people like you are so easy to fool. Little people also don’t realize that a single payer system is the ONLY system that would allow little people (as an entire country) to negotiate better health care prices. Little people don’t realize that the Medical Cartels already know that. And that is the reason why the Medical Cartels spend so much PAC money from the hospitals and doctors lobbying against a single payer system. Some little people say that a single payer system would cost you little people more. But if that were true, then wouldn’t the hospitals and doctors WANT that extra money? Yes they would. So why do the Medical Cartels lobby against a single payer system? It’s because the Medical Cartels know it would allow little people to negotiate better health care prices. And that’s what the Medical Cartels are afraid of. Period.
    But us big wigs at insurance companies, hospitals, and pharmacy companies don’t ever need to worry about health care no matter what it costs. We get our health care paid for one way or another by you little people. And we get the little people that work at our companies to contribute to our PACs. And us big wigs say it’s to protect the little peoples’ jobs. But in reality it would be in the little peoples’ best interest to NOT contribute to the PAC. Again, little people are so easy to be fooled. I won’t ever have to worry about losing my job with so many little people being brain washed by the Medical Cartels’ PAC money. Not only that, the Medical Cartels’ PAC money is used to elect so many republicans that will never allow a single payer system. Republicans have always fought against any meaningful health care reform. But that’s what our Medical Cartels’ PACs pay them for. Politicians can be bought so easily.
    Pretty soon the only people that will be able to afford health care is us big wigs. And that’s the way it should be. We don’t want you little people using up the resources when we need them. And once again, I thank you little people for capping my SS tax at the $106,800 level. Now I only pay 1.3% SS tax and you little people pay 6.2%. Also, thank you for extending my tax breaks. I’m using the extra money on my vacation houses.

    April 10, 2012 at 10:51 am | Reply
  12. Christopher

    Wow, great site! I really enjoyed the content! Please keep on writing about this content, I will be subscribing next! Check out what my company is doing for the future of rural, accessible healthcare for Colorado at http://vwhs.org

    December 14, 2012 at 4:40 pm | Reply

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