Hawaii sends #BlueLegProtection bills to Governor but Red & Green bills fail

For a couple of months now, I've been attempting to track a slew of state-based "ACA 2.0" bills slowly winding their way through various state legislatures. However, this is really a bit of a misnomer, since some of these bills aren't so much about expanding the ACA as they are about protecting it from various types of undermining or sabotage from the Trump Administration and Congressional Republicans.

In fact, as far as I'm concerned, they really fall into three categories, which line up nicely with my color-coded "3-Legged Stool" metaphor: Blue, Green and Red Leg bills.

Once again: The "Blue Leg" of the Stool covers everything which ACA-compliant individual health insurance carriers are required to include: Guaranteed Issue, Community Rating, 10 Essential Health Benefits, a Minimum 60% Actuarial Value rating, no Annual or Lifetime Caps on coverage, and a long list of mandatory Preventative Services at no out-of-pocket cost when done in-network.

The "Green Leg" of the stool covers everything that the federal (or, potentially, state) government is supposed to provide: Advance Premium Tax Credits, Cost Sharing Reductions, a cap on the enrollee's Maximum Out-of-Pocket Costs (MOOP) and the 80/20 Medical Loss Ratio rule (to be honest, the more I think about it, the MOOP provision probably belongs on the blue leg, but I'm not gonna bother making the change now).

Finally, there's the "Red Leg", which covers the enrollee's responsibilities, of which there are really only three: The individual mandate penalty (i.e., they have to actually enroll in an ACA-compliant policy, with certain exceptions, or pay a financial penalty); they have to do so during a limited Open Enrollment Period (again, with certain exceptions); and, of course, they have to actually pay their monthly premiums (I've never bothered listing "pay your premiums" as part of the Red Leg as it always felt pretty self-evident).

The vast bulk of the state-level bills which are pending right now deal with either protecting or expanding upon one or more of the items listed above.

Case in point: Hawaii, which, as Louise Norris recently reported, has passed several "Blue Leg Protection" bills...but failed to pass two other bills related to the Green and Red Legs:

H.B.1520 (PASSED, BUT NOT YET SIGNED) would all but eliminate the market for short-term health insurance in Hawaii. The legislation stipulates that a short-term plan can’t be more than 90 days, and it would also prohibit an insurer from selling (or renewing) a short-term policy to anyone who was eligible to purchase coverage in the exchange during the previous calendar year, either during open enrollment or a special enrollment period.

Virtually everyone in Hawaii is eligible to purchase coverage in the exchange. The only exceptions are people who aren’t legal US residents, people who are enrolled in Medicare, and people who are incarcerated. So if H.B.1520 is signed into law, there will be very few people to whom short-term insurers would be able to market their plans.

...S.B.2340 (PASSED, BUT NOT YET SIGNED) calls for three of the ACA’s consumer protections to be codified into state law. If enacted, the legislation would:

  • Ensure that young adults can continue to remain on their parents’ health insurance plans until age 26
  • Prohibit insurers from using applicants’ gender to set premiums
  • Prohibit insurers from rejecting an application based on an applicant’s medical history, or imposing coverage exclusions based on pre-existing conditions.

In other words, bills passed to protect Guaranteed Issue and Community Rating, and to prevent junky #ShortAssPlans from flooding the market and siphoning off more healthy people, thus ruther worsening the individual market risk pool.

Unfortunately, the following bills did not pass:

H.B.2146 and S.B.2199 (DID NOT PASS) would have directed the state to submit a 1332 waiver to the federal government, in order to obtain federal funding for a reinsurance program in Hawaii. The idea is that certain high-cost claims would be covered by the reinsurance program, thus reducing premiums for everyone in the individual market.

Reinsurance bills/waivers, which have already been successfully implemented in Alaska, Minnesota and Oregon, belong in the Green Leg category since they help cut down on the premium amount that unsubsidized enrollees pay.

...S.B.2924 and H.B.2209 (DID NOT PASS) would have created an individual mandate in Hawaii, effective in 2019. The ACA’s individual mandate penalty will be set at $0 in 2019 and beyond, essentially eliminating the individual mandate (the federal mandate will technically remain in effect, but there will no longer be any associated penalty, so there will be no method for enforcing the mandate). S.B.2924 passed the Senate by a vote of 24-1 in March, but did not advance in the House Finance Committee.

Obviously attempting to restore the individual mandate which was repealed by the GOP last December would fall into the Red Leg category. Unfortunately, neither the reinsurance nor mandate bills made it through in Hawaii.