Replacing Obamacare Should Begin with the States
We are now into the eighth year of Republicans beating the anti-Obamacare drum. Yet in 2017, with the White House, the House and the Senate under GOP control, the possibility of eliminating the Affordable Care Act is real. Already, several ideas that repeal — some of which also replace — the ACA have been put forward by legislators.
The reality, however, is that wholesale repeal without a substantive replacement plan may not be the best approach. Fortunately, the ACA contains within itself a basic framework for altering the law and identifying what works best. Recent proposed legislation builds on this possibility and represents one of the most interesting policy ideas in recent memory.
To understand this framework, it's important to understand how much the ACA relies on states and other local actors, including hospitals, to carry out its directives. State Innovation Waivers (also known as 1332 waivers) are particularly strong examples of the ACA's hidden federalism. These waivers permit states to waive various parts of the law, including the individual and employer mandates, the law's subsidy structure, and the exchanges themselves. In turn, states would receive the waived funding as a block grant and can develop a different set of regulations and rules of the road, so long as they provide equivalent protection to beneficiaries, cover at least as many people as the ACA, and remain deficit neutral.
Additionally, the law established a process by which to submit both 1332 waivers and Medicaid waivers together, suggesting the administration would evaluate the effects of both waivers simultaneously.
These waivers weren't perfect. Indeed, there were many parts of the ACA that couldn't be waived, such as the law's restrictions on insurance premium variation and various employer-market changes. But the Obama administration made 1,332 waivers even less attractive by amending prior guidance to deficit neutrality provisions, requiring that it be evaluated in a silo — meaning, that if a state wanted to spend more money on its Medicaid population and less on its privately insured population, the proposal would not pass muster.
This, of course, makes little sense. The federal government should be agnostic about...
Yevgeniy Feyman is an adjunct fellow at the Manhattan Institute and a senior research assistant at the Department of Health Policy and Management at the Harvard School of Public Health. Previously, he was MI's deputy director of health policy. Follow him on Twitter here.
This piece originally appeared in Washington Examiner