Affordability, State Efforts
What to watch for in 2021: States address the high costs of health care
Introduction
State lawmakers have returned to legislative sessions across the country, grappling with the ongoing public health and economic crises created by the pandemic, as well as harboring long lists of unfinished business from shortened sessions during 2020. With many states facing uncertain financial futures, policymakers will need to prioritize their investments.
At UsofCare, we know that 84% of the public – including 54% strongly – support building a better, more equitable health care system in the wake of the COVID-19 pandemic. It also showed that 94% of African-Americans agreed with the sentiment, as did 71% of Republicans.
Now is the time to invest in policies that lower the cost of health care, and expand access for people. States across the country are leading the way in pursuing commonsense changes to make health care more affordable. Let’s take a look at some of the state’s best opportunities.
Lowering Premiums and Cost-Sharing
In response to the pandemic, states are working to increase subsidies to lower premiums and cost-sharing. These strategies help low- and middle-income people, who remain more likely to be uninsured, to access affordable coverage.
In 2020, Colorado passed legislation to provide people with additional financial assistance by creating an Insurance Affordability Fund. It’s paid for by new state fees, including a fee on insurers that was previously required federally. Combined with legislators extending the Colorado Reinsurance Program, these funds will be used to lower premiums for individuals and families, allowing them to purchase more-affordable coverage.
This includes extending subsidies to people left in the “family glitch,” which affects people whose individual coverage is deemed affordable, but whose family coverage is actually unaffordable. This leaves them otherwise ineligible for federal tax credits. Legislation establishing a state-based fee on issuers to provide people with more affordable coverage was also passed most recently in New Jersey, following Delaware and Maryland, and is a path other states can consider similar action as well.
Defining what “affordable” really means
We know that affordability is America’s number-one health care concern and there’s . But there’s no standard definition of what it means for people’s actual bottom lines. So when does health care qualify as affordable to the people who are using it? Well, it means looking at the total costs of people’s health care — not just their premiums.
States are recognizing this gap left at the federal level and are creating solutions that work for the people of their state. Connecticut and others are developing processes to better understand how big a chunk of a family’s budget they can afford to spend on health care. Rhode Island and Massachusetts have created similar standards of affordability and developed policies that tie those standards to what people actually pay. Most recently, New Jersey’s Governor issued an Executive Order to create a plan — on a quick timeline — for implementing cost growth benchmarks and affordability standards.
Expanding Access through Virtual Care
Early in the pandemic, federal and state governments partnered to expedite, ease, and expand the use of virtual care (also frequently called ‘telemedicine’). On a temporary basis, providers got greater flexibility and authority to care for patients outside of the medical office, and through remote methods like video or phone.
For one, rules about the distance between provider and patient were relaxed, allowing patients to receive care from their home and for providers to conduct virtual visits outside a clinic or hospital. There is still a crucial need to study the impact of these changes, particularly for people who may encounter additional technology barriers. But it’s clear that many consumers have taken a liking to this new flexibility. As we emerge from this public health crisis, state policymakers have an opportunity to create legislative authority that increases people’s access to virtual care.
Expanding Coverage through a Public Option
Not all states are focused solely on improving existing programs. A number of states are seeking creative ways to expand access to care. Since 2018, more than a dozen have introduced bills to expand coverage through some form of public option, an improvement to today’s health care system that lowers cost and makes quality health care more accessible.
Though a public option can look different in different states, policymakers should ensure their bills solve common pain points. Those include having access to mental health visits and primary care, or ensuring that the option’s premiums are lower for consumers than plans available on the open market. In rural communities, a public option could be designed to create more competition for commercial plans. Across the country, 10% of counties have only one insurer available. A state could also design a public option to address specific market failures, like the lack of affordable options for small businesses, or to serve people who can’t get insurance from their job.
The popularity of a public option is strong: more than eight-in-ten Americans support a public health insurance option, with majority support across Democrats, Independents and Republicans. It is also popular among diverse geographies and communities. In Connecticut, more than 72 percent of small business owners expressed support for a public health insurance option that would allow them to recruit and retain employees. In Colorado, a public option has 72% support among rural counties.
Conclusion
Amid the long list of health issues facing state policymakers this year, affordable access to health care — especially during and after a global pandemic — is a priority for people of all stripes and all corners of the country. States have long been at the forefront in advancing innovative ideas and driving health care change. They’re poised to take especially meaningful steps as legislative sessions begin this year.
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