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)
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    December 14, 2012 at 4:40 pm | Reply
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