Wednesday, March 2, 2011

Boring But Important-States Can Opt-Out of Health Care Plan (Mandates) 3 Years Earlier

"If your state can create a plan that covers as many people as affordably and comprehensively as the Affordable Care Act (PPACA) does, without increasing the deficit, you can implement that plan, and we'll work with you to do it."  This is was President Obama said while speaking at the National Governors Association 2011 Meeting in Washington, D.C.  on February 28th.  What this means is that states would be able to withdraw from some of the law's regulatory mandates in 2014 instead of 2017 through a "state innovation waiver".

In bipartisan support of "Empowering States to Innovate Act" it allows states to establish independent insurance regulatory models instead of Health Exchanges.  In addition it also allows those states to have no individual mandate and no penalties for those companies with more than 50 employees that do not meet PPACA requirements.  This could be of great interest to those states who filed a lawsuit against the PPACA's individual mandate, in Florida.

Even though there would be more flexibility for the states, they still would be required to offer policies that are as comprehensive and affordable as those offered through the exchange, cover as many residents as would have through PPACA and not increase the deficit.  In addition, certain mandates would need to stay, including: No lifetime limits, Dependents can stay on parents plan until age 26, Patients can choose any network physician and Carriers must spend at least 80% on Health Care and no more that 20% on administrative costs.

The questions I have would be how would the fed be able to police these plans?  In other words how would they ever be able to prove how many residents would have been covered under PPACA versus the states own version?  Also, states will have the opportunity to do more.  In other words they could go the other way and set-up a government run single-payer plan.