Be wary of candidates who promise an ACA opt-out

  • Article by: EDITORIAL BOARD , Star Tribune
  • Updated: August 15, 2014 - 6:42 PM

Candidates who say it’s as simple as asking for a waiver are wrong.

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Republican gubernatorial primary winner Jeff Johnson and his challengers Kurt Zellers, Marty Seifert and Scott Honour (not shown) held a “unity” news conference on Wednesday.

Photo: Glen Stubbe • Star Tribune,

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It’s remarkable that 2012 Republican presidential candidate Mitt Romney got through the entire campaign without having to explain the glaring problem with the highly-touted first item on his promised first-day-in-office agenda: allowing states to opt out of the Affordable Care Act.

As his party has so often reminded the nation recently, the president isn’t king. If he’d won, Romney would have had to follow the health reform law. The ACA does indeed allow states to opt out of some key requirements to pursue their own health reforms. But the first year that becomes possible is 2017 — four years after Romney would have taken office.

The law also doesn’t just allow the states to do whatever they want. Whatever states pursue, the result must cover at least as many uninsured as the ACA. Coverage and cost-sharing must also be at least as affordable as the ACA’s. That’s a high bar.

While Romney never got called out for the factual gaps, Minnesotans shouldn’t make the same mistake this coming election season.

Voters who hear a similar opt-out pitch from Minnesotans on the campaign trail ought to demand details about how it would work. It’s clear to anyone who does their homework that this “plan” is based much more on wishful thinking than reality.

The opt-out strategy is known by a different moniker in Minnesota. Here it’s called the “waiver” approach — as in, Minnesota will just get a waiver from the U.S. Department of Health and Human Services and go back to pre-ACA days before MNsure, the strengthened MinnesotaCare program, the coverage mandate, the new subsidies to help consumers buy insurance and affordable coverage for those with pre-existing conditions.

Generally, it’s Republicans who are peddling the simplistic strategy. The list includes Jeff Johnson, who won the Republican gubernatorial primary. Kurt Zellers, the former Minnesota House speaker who lost in the primary, was an even stronger proponent. Republican legislators also have pushed the global waiver. (Worth noting: Proponents often confuse this broad opt-out with a more limited waiver some states have been granted under a different law to experiment with the Medicaid program. The two aren’t the same.)

Like anything else that sounds too easy, the waiver solution ought to inspire healthy skepticism. There is indeed a part of the ACA that allows states to pursue their own reforms and potentially get exemptions from running an exchange or the coverage purchase requirement. It’s Section 1332, better known as the “State Innovation Waiver” or the “Wyden Waiver,” after the Democratic senator from Oregon who championed it.

Note the word “innovation.” The intent was to allow states flexibility to accomplish the ACA goals of broadening coverage and finding ways to deliver better care at less cost.

Health experts generally agree that waiver applications, which must be approved by HHS, aren’t likely to go anywhere unless they can demonstrate insurance coverage increases.

Section 1332’s safeguards to maintain affordability, cost-sharing protections and comprehensive coverage also work against Republican proposals that tend to shift costs to consumers, such as high-deductible plans. In addition, Minnesota would likely need to pass a law to ask for a waiver, which could be challenging given that DFLers control the state Senate through 2016.

Some conservative commentators have complained that the requirements rule out anything but single-payer systems — a Medicare-for-all type system — getting approved. Vermont is pursuing one, and experts generally agree that the state is the first and likeliest to succeed.

HHS officials would not comment on whether Minnesota’s pre-ACA system would qualify for a 1332 waiver, but officials did note that the uninsured rate here dropped by about 40 percent since last September. The implication: Officials believe the law is working well in Minnesota, suggesting that a return to pre-reform days is a long shot.

Could Minnesota get a waiver if it simply plans a return to a pre-ACA system? Henry Aaron, a Brookings Institution expert, said the state’s chances would be “zero.” John McDonough, author of an influential book on health reform, said such an approach “would in no way pass muster under the ACA.” McDonough is director of executive and continuing professional education at the Harvard School of Public Health.

What’s most disappointing about candidates using the waiver pitch is that they’re completely missing the point about innovation. The state has long been a health care standout. But as the drop in uninsured shows, there was room for improvement.

Instead of going backward, Minnesota ought to be pursuing an innovation waiver to find new ways to deliver better care at less cost while expanding coverage. The state needs new ideas from its leaders — not ill-informed promises about turning back the clock.

  • To learn more

    The Centers for Medicare and Medicaid Services offers an accessible overview of state innovation waiver requirements. To read it, go to http://tinyurl.com/l8eodm4.

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