Governors Offer Plan to Keep Obamacare and Fund It More

A bipartisan health reform proposal headlined by Governors John Kasich and John Hickenlooper would preserve Obamacare and instead provide states more flexibility under the existing law, according to an outline of the plan released Thursday.

The collection of ideas, presented in a letter to congressional leaders, focuses solely on the individual market, leaving the Affordable Care Act’s Medicaid expansion aside. Kasich, Hickenlooper, and six other governors suggest keeping the individual mandate in lieu of Washington or individual states creating a better coverage enforcement provision. They ask the federal government to do a better job promoting insurance to healthier and younger people. And they encourage the Department of Health and Human Services to streamline waiver requests from some of the law’s provisions, by letting states easily piggyback off each other’s approved waivers.

Many of the governors’ new suggestions, then, amount to tweaks at the state level. But there are several of them. One possibility that surely will receive attention when Kasich and Hickenlooper present their blueprint in D.C. next week would allow states more leeway with essential coverage benefits (EHBs) mandated by the federal government. Instead of permitting states to water down the mandate, however—a direction in which several House conservatives were pushing earlier this year—the governors are advocating for a technical tweak.

“The Secretary of Health and Human Services (HHS) should allow states more flexibility in choosing reference plans for the ten EHB categories than are currently allowed by regulation,” they write. HHS decided in 2012 to let states choose EHBs based on those contained in large private health plans or the Federal Employees Health Benefit Plan, since the benefits were likely to be similar across the country. Another reason for HHS to grant this permission, Health Affairs reported in February, was that it “could create some natural flexibility as these plans changed or as states chose new benchmarks from time to time.”

As an aide to Hickenlooper told me Thursday, Colorado is interested in tying EHBs to a higher-value plan. At present, his state has a “limited menu” of options from which to choose. Nevada governor Brian Sandoval, a Republican who signed the Kasich-Hickenlooper proposal, and fellow GOP exec Bill Haslam of Tennessee, both have asked for similar flexibility. It’s an idea in which governors of both parties are interested—but it’s policy minutiae, not ideologicallydriven reform.