States Could Lead Health-Care Reform


States may be first in line to start changing Obamacare.

That’s what Brookings Institution economist Stuart Butler told me. Butler, who previously worked for the conservative Heritage Foundation, was one of the first to suggest requiring a mandate that individuals buy health insurance.

The Affordable Care Act includes a provision allowing the administration to approve waivers for states to make sweeping changes to the law if the health care provided is at least as comprehensive and affordable as what would be provided without the waivers, if a comparable number of people are covered and if the changes don’t increase the federal deficit.

“A state could come forward with a proposal that gets rid of the mandates on individuals and employers,” Butler told me. Other examples that states could implement include abolishing the ACA exchanges and making major changes to the Medicaid program, Butler said.

Using the so-called Section 1332 provision of the ACA has the added advantage that the incoming Trump administration could approve the changes without having to garner 60 votes to overcome a possible filibuster in the Senate for a replacement plan.

The “Better Way” health-care plan put forward by House Speaker Paul Ryan (R-Wis.) includes provisions to empower states and give them more flexibility in implementing health-care reform.

A Brookings paper released in December outlined key components of a replacement plan that Republicans have called for or may be inclined to favor. Included in the suggestions:

  • Repealing the individual and employer mandates for health insurance coverage;
  • Loosening age rating restrictions that make health plans more expensive for young adults and less expensive for older people who aren’t yet eligible for Medicare;
  • Allow cheaper, less comprehensive plans; and
  • Loosen restrictions on state innovations.

The paper was co-authored by Butler, Alice Rivlin—who was director of the Office of Management and Budget under President Bill Clinton, and Brookings health-care analyst Loren Adler—who is a supporter of the ACA.

“This is a credible way to go if there really is going to be a bipartisan negotiation,” Rivlin told me.

Read my full story here.

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