February 2018 STATE EFFORTS TO CLOSE THE HEALTH COVERAGE GAP This review examines prominent state efforts to expand health coverage to the remaining uninsured. It analyzes and compares efforts in Massachusetts, Vermont, Colorado, California, and Nevada and highlights insights and themes that emerge. It explores the context and climate for reform within the state, stakeholder involvement, political coalitions, financing, and possible opposition. As such, it serves as a case study in how different states build, or fail to build, the popular and political will towards health care coverage for all residents. This is the first in a series of reports that will monitor and analyze developments at the state level to expand coverage and improve access to care. There is a health coverage gap in the United States, with nearly policies to get us there. Further federal movement in that direction 28 million individuals lacking health insurance coverage. While is unlikely in the immediate future, given the recent gridlock of the health insurance is not a guarantee of affordable health care or federal government. However, there has been activity at the state better health outcomes, recent evidence indicates that expanding level toward this goal in recent years. coverage increases patients’ access to primary care, preventive care, chronic illness treatment, medications, and surgery. State and federal This review focuses on prominent state efforts that have, or had, as governments have grappled with their role in ensuring coverage, their primary goal to close the coverage gap, and highlights insights attempting to close the coverage gap with a mix of public and/or and themes that emerge. Other states have targeted important and private programs. relevant issues such as controlling health care costs, stabilizing private markets, improving choice, and increasing price transparency, all of The Affordable Care Act (ACA) of 2010 was the most recent which may help to expand coverage, but these efforts are beyond the federal attempt to fill gaps in health coverage, and it made scope of this review. significant progress in reducing the uninsured rate. It is notable that as a compromise agreement, the ACA focused on incremental Overall, this review serves as a case study in how different states improvements rather than large-scale overhaul, particularly in the build, or fail to build, the popular and political will towards health care expansion of Medicaid and changes to the individual insurance coverage for all residents. What might we learn across the experience market. Even if the ACA had been implemented as originally written, of very different states, proposing very different solutions? We the Congressional Budget Office (CBO) projected that it would explore the importance of the current coverage gap within the state, have left 23 million nonelderly people uninsured in 2019. building public will, stakeholder involvement, political coalitions, financing, and possible opposition. Overall, the goal of expanding coverage to the remaining uninsured enjoys general public support, but there is little consensus around LDI.UPENN.EDU | @PENNLDI | UNITEDSTATESOFCARE.ORG | @USOFCARE MASSACHUSETTS (2006) Financing. In keeping with the theme of shared responsibility, the plan was financed by raising the level of funding from both the public Massachusetts passed a health care reform bill in 2006 that became and private sector. The financing of the plan “worked” because the a model for the national effort that resulted in the ACA. It achieved new burden on taxpayers was presented as primarily a redirection nearly universal coverage in the state, covering 97% of all residents as of existing funding, with minimal impact on the state budget. After of 2009. reform, with revenues redirected as shown in Figure 1, the net new Elements of Reform. The Massachusetts reform expanded Medicaid spending was $591 million, of which $172 million — less than 1% of the coverage; created state-subsidized insurance for low-income people state budget — came from the state’s general fund. not eligible for Medicaid; merged the individual and small-group “Shared responsibility” was more than a slogan —a 2009 report insurance markets; instituted an employer “fair share assessment” and found that the overall distribution of spending on health insurance an individual mandate; and created the Commonwealth Connector, by employers, individuals, and government remained essentially the an insurance marketplace that also set coverage and affordability same between 2005 and 2007. Only about half of the more than standards. 400,000 residents who gained coverage by the end of 2008 were Climate for Reform. It is important to realize that Massachusetts publicly subsidized. In 2009, two Massachusetts officials noted that was building on prior reforms to the individual marketplace, including “the individual mandate and employer incentives have provided good guaranteed issue and community rating, and that the state had value for Massachusetts taxpayers, costing about $1,060 in net new already broadened Medicaid eligibility under an 1115 waiver. The spending per newly covered resident in 2008. The state succeeded in uninsured rate among the non-elderly was relatively low before enacting a government program that stimulated private parties to use the reform (10.9%, about 532,000 people), which dropped to private dollars to help fulfill a public good.” 5.5% in the year after implementation. Massachusetts had other Governing/Decisionmaking Body. The statute established the characteristics conducive to successful reform: it had a relatively high quasi-public Commonwealth Connector, an insurance-purchasing per capita income and large rate of employer-sponsored coverage. exchange, led by the Connector Board, composed of various Massachusetts had also created an uncompensated care pool in 1985, stakeholders, including consumers, business, and labor. The board to help compensate hospitals for otherwise unpaid care. was charged with defining affordability, negotiating premium rates A motivating factor in reform was revenue shortfalls and projected with health plans, developing consumers’ cost-sharing provisions, and state budget deficits that confronted the newly elected Governor defining the minimum benefits package. Significantly, Massachusetts Romney in 2003. Medicaid provider payments were cut an average did not include cost-control mechanisms such as rate setting or of 3%-5% for hospitals, nursing homes, physicians, pharmacists, and restrictions on cost growth. managed care organizations. Enrollment and eligibility cutbacks were in the works as well. The existing system seemed fiscally unsustainable. KEY INSIGHTS: One other immediate motivation was the impending expiration of the Medicaid waiver, which put more than $385 million in federal funds at • The Massachusetts reforms were built on pre-ACA scaffolding risk without further reforms. that included a low proportion of uninsured residents, a highly regulated insurance market, and significant state spending on an Political Support. The plan was introduced by a Republican uncompensated care pool. governor, and endorsed by prominent Democrats, business leaders, consumer advocates, insurance executives, clergy, and hospital • Most of the residents that gained insurance did so through CEOs. The plan was three years in the making, beginning with a employers, thereby avoiding the political problems that a massive Blue Cross Blue Shield Foundation-funded initiative that developed growth in government spending might produce. a comprehensive “Roadmap to Coverage.” Developed over two years with multi-stakeholder involvement, the Roadmap presented • Bipartisanship—with support from a Democratic legislature and a plan that minimized 1) disruption to the employer market; 2) the a Republican governor—reduced partisan divides and minimized need for new revenues; and 3) expansion of the government’s role. entrenched opposition by party lines. A central theme in the political debate was the need for “shared • The reform maintained the balance of funding across sectors, responsibility”— the idea that individuals, employers, and government thereby minimizing narratives about “winners” and “losers.” would all need to contribute to achieving access to health care for all residents. A survey conducted six months after passage (but before implementation) found that 64% of Massachusetts residents were largely supportive of the new law. 2 FIGURE 1 The Financing of Massachusetts Health Care Reform* Financing before Additional Financing, Source Financing after Reform Reform Fiscal Years 2006-2009 Fiscal Year 2006, Actual Fiscal Year 2007, Actual Fiscal Year 2008, Actual Fiscal Year 2009, Estimated millions of dollars Spending MassHealth 770 511 642 795 Commonwealth Care 0 133 628 805 UCP-HSTNF 656 665 416 417 Total 1,426 1,309 1,686 2,017 Additional, 2006-2009 591 Revenues UCP-HSNTF provider 320 320 320 320 assessments and insurer surcharges Local contribution to MCO 385 0 0 0 supplemental payments Federal financial participation 688 816 888 1,272 Dedicated revenues 0 7 21 219 Total 1,393 1,143 1,229 1,811 Additional, 2006-2009 418 Difference General fund share 33 166 457 205 General fund share of net new 172 annual spending, 2006-2009 * ata are from the Massachusetts Executive Office of Health and Human Services. No enrollment increases besides those directly attributable to eligibility changes have been included in this analysis. D Commonwealth Care spending is net of enrollee contributions. Dedicated revenues include new taxes and penalties dedicated to paying for health care reform. Some differences appear not to be exact, because of rounding. MCO denotes managed-care organization, and UCP-HSNTF uncompensated care pool—Health Safety Net Trust Fund (as the pool is called under health care reform). SOURCE: Massachusetts Health Care Reform — Near-Universal Coverage at What Cost? NEJM 2009; 361:2012-2015 VERMONT (2011) Climate for Reform. In 2007, Vermont had enacted a package of health reforms, including a new program for covering the uninsured The most comprehensive state attempt to achieve universal health known as Catamount Health. This earlier reform was a product coverage in recent U.S. history occurred in Vermont. Its reform bill, of political compromise, with private, subsidized coverage offered Act 48, was enacted in 2011, with reformers wanting to improve to low-income uninsured people. Catamount Health experienced upon the ACA to cover the entire population while simultaneously higher-than-expected costs, the state had less revenue because of containing costs. the recession, and the ACA catalyzed advocates who had pushed for Elements of Reform. Act 48 instructed the state to develop a more radical reform in the earlier efforts. Before Act 48 was enacted, single-payer, government-financed system, called Green Mountain 7.6% of non-elderly residents were uninsured in 2009. After the ACA Care, to provide universal coverage, replacing most health insurance was implemented, the uninsured rate dropped to 6% (second lowest in Vermont except for Medicare and Tricare. Employees could choose in the U.S.), about 31,200 people. to keep employer-sponsored health insurance, with Green Mountain Political Support. In 2010, Peter Shumlin, a progressive Democrat Care as secondary coverage, but the Act anticipated replacing with a close alliance with Senator Bernie Sanders, ran on a single- most employer-sponsored coverage. Non-residents working for payer platform and won election as Governor. State legislators also Vermont-based companies would also be covered. The plan offered wanted to go beyond the ACA, and push for radical reform. The plan a broad array of services, designed to mirror or improve upon existing was bolstered by a strong “Healthcare Is a Human Right” campaign, coverage for most Vermonters. It required that hospitals and providers and the involvement of well-known health economists William Hsiao accept 105% of Medicare reimbursement rates for their privately and Jonathan Gruber. Hsiao had experience developing universal insured populations, and set an overall cost growth cap of 4%. health coverage programs in other countries. 3 FIGURE 2 anticipated federal revenues from Medicaid and the ACA declined Financial Estimates from Three Projections for a in the interim, and because the new plan offered ‘platinum’ level Vermont Single-Payer Health Plan* insurance (94% actuarial value) rather than the 87% actuarial value of 2014, State of the initial estimate. Yet policymakers refused to reduce the offering Variable 2011, Harvard 2013, UMass Vermont to gold-tiered benefits because that would have been a downgrade Estimated savings (%) 8-12% short term; 1.5% over 3 yr 1.6% over 5 yr in coverage for many Vermont citizens. The plan was also expensive 24-25% long term because it tried to replace federally-subsidized insurance with state- Estimated new taxes subsidized insurance. In the final, official analysis, the plan would require raising payroll taxes by 11.5% and income tax by up to 9%, with Employers 9.4% of payroll Not estimated 11.5% of payroll lower predicted savings to the health system of 1.6%. Employees 3.1% of household Not estimated Sliding scale up to income 9.5% of household Governing/Decisionmaking Body. Act 48 created the Green income Mountain Care Board with unprecedented, centralized responsibility Cost gap to be state NA $1.6 million $2.5 billion for benefits design, coverage, and premiums. It was tasked with financed controlling the rate of growth in health care costs and “improving the New federal revenues $420 million $267 million $106 million health of Vermonters” through a variety of regulatory and planning from ACA Section 1332 tools. These tools included all-payer rate setting and an explicit cost Total cost of Green NA $3.5 billion $4.3 million Mountain Care growth cap (4%). The Board consisted of five Vermonters, nominated * ACA denotes Affordable Care Act, NA not applicable, and UMass University of Massachusetts by a broad-based committee and appointed by the Governor. SOURCE: The Demise of Vermont’s Single-Payer Plan. NEJM 2015; 372:1584-1585 Outcome. Citing the risk of “economic shock,” Gov. Shumlin pulled the plan in December 2014, stating that it was not the time to move forward with a publicly-financed health care system in Vermont. “Our However, in 2014, Gov. Shumlin won re-election by a single current way of paying for health care is inequitable. I wanted to fix percentage point margin, which left him without a strong mandate this at the state level, and I thought we could. I have learned that to implement the single-payer promise he had run on. In addition, the limitations of state-based financing – limitations of federal law, the political will to enact the plan waned in the absence of a clear limitations of our tax capacity, and sensitivity of our economy – make financing mechanism. that unwise and untenable at this time.” Political Opposition. “Partners for Health Care Reform,” a coalition of the Vermont Medical Society, Fletcher Allen Health Care, Blue KEY INSIGHTS: Cross/Blue Shield, Vermont Association of Hospitals and Health • The public was divided in its support for radical health reform Systems, Vermont Business Roundtable. Vermont Chamber of when it passed. Three years later, it was just as divided, in the Commerce, and the Vermont Assembly of Home Health Agencies, absence of any sustained effort to educate the public about what did not come out explicitly against the plan, but challenged some the act did and how it would affect people’s lives. Thus, there was of the assumptions regarding provider payments and administrative no groundswell of support when estimates were much higher savings. The group commissioned a report that estimated the plan than anticipated. Health reform needs significant time and energy would amount to a 16% cut in payments to doctors and hospitals devoted to educating the public about the plan and its financing. (something the state disputed). Public opinion polling in 2011 found that residents were divided in their support for the law, with 40% • The state government did not produce a competing narrative to supporting it, 35% opposing it, and 25% unsure. In 2014, polls showed the complaint about big-government expansion. that the public remained divided, with 40% supporting the plan, 39% opposing it, and 21% undecided. • States must work with hospitals and providers at the table for buy-in and to develop all-payer rates and limits on cost growth. Vermont’s Financing. The initial Act provided no financial details, but inability to bring these players together in support of the bill likely directed that a financing plan be produced by 2013. Initial estimates contributed to its failure. predicted immediate and longer term savings for the health system (see Figure 2), and concluded that a new payroll tax of 9.4% for • It is important to think about the behavioral economics of how a employers and new income taxes of 3.1% for individuals would replace plan will be received. For example, workers might fail to notice their health insurance premiums. However, other estimates were not so employer-based health insurance premiums, but would notice an optimistic, and Gov. Shumlin did not produce the report of how increase in their tax bill. much the act would cost until long after it was introduced, which may have contributed to its failure. Projections kept changing because 4 COLORADO (2016) Political Support. The initiative was shepherded by physician and Colorado State Sen. Irene Aguilar, a Democrat, and had the support Through a ballot initiative in 2016, Colorado was the next state to try of slightly more than half of the Democratic-controlled legislature. to pass an ambitious, universal health coverage plan (ColoradoCare). It garnered the necessary 100,000 signatures to put it on the ballot The plan would have replaced most employer-sponsored insurance by tapping into public frustrations over rising out-of-pocket costs coverage, individual market plans, Medicaid, and CHIP with a single- and limited coverage. It was supported by ColoradoCareYES, a payer system. community-based organization. Elements of Reform. ColoradoCare was a taxpayer-financed Political Opposition. The Denver Metro Chamber of Commerce system of universal health coverage for all Colorado residents. It coordinated opposition through a campaign group called Coloradans would be created by the state constitution (through Amendment for Coloradans. State Treasurer Walker Stapleton, a Republican, 69), but largely beyond the control of the governor and legislature. and former Governor Bill Ritter, a Democrat, co-chaired the group. It would replace Medicaid (but not Medicare) and private insurance. Gov. John Hickenlooper, a Democrat, also opposed the proposal, It featured broad coverage, no restrictions on provider networks, no stating, “Our reforms are just beginning to bear fruit…and it would be deductibles, and some copayments. premature to dramatically remake our health care system at this time.” It would have also replaced the medical care portion of workers’ Strong bipartisan political opposition included four U.S. representatives, compensation insurance. Beneficiaries that would have been eligible more than a dozen state senators, and more than a dozen state for Medicaid or the Children’s Basic Health Plan would have received representatives. Sen. Bennet and three former governors spoke out benefits required by federal law, in addition to ColoradoCare’s against it, while candidates up for re-election found it risky to support standard benefits. The wording of Amendment 69, as presented to the plan. Additionally, influential industries including realtors, bankers, the voters on the ballot, is below: farmers, contractors, and especially health insurance companies opposed it. The measure lost the support of important women’s health groups SHALL STATE TAXES BE INCREASED $25 BILLION ANNUALLY IN THE FIRST FULL FISCAL YEAR, AND BY SUCH AMOUNTS THAT ARE due to a fear that because the Colorado state constitution bans the RAISED THEREAFTER, BY AN AMENDMENT TO THE COLORADO use of ‘public funds’ for abortion, women covered by ColoradoCare CONSTITUTION ESTABLISHING A HEALTHCARE PAYMENT SYSTEM would not be covered for abortions. By August 2016, the liberal group TO FUND HEALTHCARE FOR ALL INDIVIDUALS WHOSE PRIMARY ProgressNow Colorado announced its opposition to the measure. RESIDENCE IS IN COLORADO, AND, IN CONNECTION THEREWITH, CREATING A GOVERNMENTAL ENTITY CALLED COLORADOCARE TO ADMINISTER THE HEALTHCARE PAYMENT SYSTEM; PROVIDING Financing. Unlike Vermont, Colorado did propose a financing plan: FOR THE GOVERNANCE OF COLORADOCARE BY AN INTERIM a payroll tax of 10% (pre-tax payroll premiums of 3.33% for employees BOARD OF TRUSTEES UNTIL AN ELECTED BOARD OF TRUSTEES and 6.67% for employers), and 10% of all non-payroll income, such as TAKES RESPONSIBILITY; EXEMPTING COLORADOCARE FROM THE self-employment and capital gains. The tax would apply to individual TAXPAYER’S BILL OF RIGHTS; ASSESSING AN INITIAL TAX ON THE TOTAL PAYROLL FROM EMPLOYERS, PAYROLL INCOME FROM EMPLOYEES, income below $350,000 for a single person, or $450,000 for married AND NONPAYROLL INCOME AT VARYING RATES; INCREASING THESE couples filing jointly. Business owners said the extra taxes would have TAX RATES WHEN COLORADOCARE BEGINS MAKING HEALTHCARE been burdensome and unpopular, driving business from the state. PAYMENTS FOR BENEFICIARIES; CAPPING THE TOTAL AMOUNT OF When fully implemented, the plan would cost $36 billion, more than INCOME SUBJECT TO TAXATION; AUTHORIZING THE BOARD TO INCREASE THE TAXES IN SPECIFIED CIRCUMSTANCES UPON APPROVAL the state’s present budget. An independent, nonpartisan analysis OF THE MEMBERS OF COLORADOCARE; REQUIRING COLORADOCARE concluded that the proposed revenue to pay for ColoradoCare would TO CONTRACT WITH HEALTHCARE PROVIDERS TO PAY FOR not keep up with increasing health care costs, resulting in growing SPECIFIC HEALTHCARE BENEFITS; TRANSFERRING ADMINISTRATION deficits each year. OF THE MEDICAID AND CHILDREN’S BASIC HEALTH PROGRAMS AND ALL OTHER STATE AND FEDERAL HEALTHCARE FUNDS FOR Governing Body/Decisionmaking. The Amendment proposed COLORADO TO COLORADOCARE; TRANSFERRING RESPONSIBILITY TO COLORADOCARE FOR MEDICAL CARE THAT WOULD OTHERWISE an interim board of 15 members appointed by the Governor and BE PAID FOR BY WORKERS’ COMPENSATION INSURANCE; REQUIRING legislative leaders, followed by a permanent 21-person board of COLORADOCARE TO APPLY FOR A WAIVER FROM THE AFFORDABLE trustees elected from seven districts across the state. That board would CARE ACT TO ESTABLISH A COLORADO HEALTHCARE PAYMENT set benefits and budgets. There was a great deal of fear that the board SYSTEM; AND SUSPENDING THE OPERATIONS OF THE COLORADO HEALTH BENEFIT EXCHANGE AND TRANSFERRING ITS RESOURCES TO would have too much control over health care, and voters would not COLORADOCARE? have been able to recall the elected board members. Detractors also said that health care providers could be inadequately reimbursed under the new system, causing them to stop providing care in Colorado and, Climate for Reform. In 2013, 14% of Colorado’s non-elderly residents, thus, decreasing Coloradans’ health care choices. approximately 646,200 people, were uninsured. After implementation of the ACA, the uninsured rate decreased to 10% (469,600 people), Outcome. When Colorado put single payer on the ballot as but parts of Colorado (rural areas with few providers and little insurer Amendment 69 in 2016, it failed badly, with 79% voting against competition) faced skyrocketing premiums and growing cost-sharing. it. Opponents (Coloradans for Coloradans) outspent supporters 5 (ColoradoCareYES) by more than five to one, with messages cost about $400 billion per year—double California’s current budget. focused on the increased tax burden on employees and employers, California could cover about $200 billion from current federal and and claiming that inadequate reimbursement would lead to a state spending—including Medicaid and Medicare. An additional decrease in health choices. $100 to $150 billion could be captured from what employers are already spending. The additional funding needed could involve a 15% payroll tax, a 2.3% sales tax, and/or a business tax increase. KEY INSIGHTS: Political Support. The powerful California Nurses Association led • A ballot initiative, because the language is set early, does not lend the campaign for the bill, with other support from labor unions and itself well to the process of building support over time for large- consumer groups. Public support in California for single payer is 65%, scale reforms. yet drops to 42% if such a plan requires an increase in taxes. Lt. Gov. • It is clear that tax shock is a severe obstacle to such efforts. Support Gavin Newsom supports single payer and is running for governor in for single-payer dramatically drops if a tax hike is imposed. “Shall 2018. state taxes be increased $25 billion annually…” is not likely to be Political Opposition. A wide array of business groups opposed the positively received without a major initiative to educate the public measure, including health insurers, manufacturers and the California about savings in the long-term. Chamber of Commerce, which called the bill a “job killer” because of • Fear of diminished or constrained choices in providers or coverage the tax burden it would impose on responsible employers. Opponents proved to be a powerful drawback. There was little appetite for also pointed to the lack of cost containment measures that would lead delegating choices to a board, even an elected one; the public’s to budget shortfalls, requiring drastic cuts in services or long waits for distrust of such governing bodies runs deep. providers. • Fractured coalitions with the loss of women’s health groups proved Governing Body/Decisionmaking. An independent public entity problematic. called the Healthy California Board would govern the program. The nine-member board would have representatives from the health • Without unified support from either party’s officials, building care sector, labor, and the general public, and include individuals with political will for large-scale reform is unlikely. health care experience. The Governor, Senate Committee on Rules, and Speaker of the Assembly would appoint the board members, and each member would serve four-year terms. The board would be responsible for negotiating contracts and payment methods CALIFORNIA (2017) with health care providers and health care systems, and for seeking The next state to attempt universal health coverage was California. In necessary waivers and approvals to allow existing federal health- June 2017, the California State Senate passed a bill to create “Healthy related payments to be made directly to the program. California”—a program to create a single health care market in the state. Outcome. California Assembly Speaker Anthony Rendon shelved Elements of Reform. The bill would create the “Healthy California the plan in June 2017, citing a lack of a funding mechanism that Trust Fund” in the State Treasury. Federal and state funds previously would allow it to deliver the care and coverage that it promised. The allocated to Medicaid, CHIP, Medicare, ACA subsidies, and others measure is likely to be reconsidered in the 2018 legislative session. would be deposited in the trust fund. Under the Healthy California plan, individuals would not be subject to premiums, copayments, or deductibles. Medical, pharmaceutical, dental, vision, and long-term KEY INSIGHTS: care would be provided to all residents—including undocumented • The California plan is about as ambitious, and disruptive, as has immigrants—free of charge. Providers would be paid Medicare rates. been introduced. Climate for Reform. In 2013, 16% of California’s non-elderly • The plan faced significant hurdles both politically and practically. It residents, approximately 5.47 million people, were uninsured. After would require a variety of federal waivers of existing Medicaid and implementation of the ACA (and Medicaid expansion), the uninsured Medicare regulations, and the financing mechanism would need to rate dropped to 10% (2.95 million people) in 2016. One in three of be developed. California’s remaining uninsured are non-citizens who are not eligible for any public program of coverage. California has a long history • The lack of a defined financing mechanism for California’s proposal of campaigns and political leaders who have espoused universal left even its supporters unable to proceed. coverage. • Because the plan would create a true single-payer market (replacing Financing. The bill required the legislature to develop a revenue all present insurance, both public and private) it faced predictable plan for Healthy California. Experts estimate the program would continued on next page  6 and well-funded opposition from those whose livelihoods were at Political Support. In 2017, Democrats controlled both chambers of stake (such as health insurers). the Nevada Legislature, which meets every other year. During floor votes on the House and Senate floors, there was no debate even as • California is one of the success stories in terms of implementing the the bill passed along largely party lines. Nearly one in four Nevada ACA and creating a robust individual market. The fact that many residents is insured by Medicaid, which enjoys broad popular support. of its remaining uninsured cannot obtain coverage through ACA- related provisions (due to citizenship status) provides incentive to Political Opposition. The Nevada Hospital Association, along with pursue disruptive change. other health care providers, voiced concerns about the new plan reimbursing them at lower rates. However, they remained neutral, given the lack of detail about whether the plan might displace private payers or primarily be an option for people who were uninsured or at NEVADA (2017) risk of losing their existing Medicaid coverage. In 2017, the Nevada legislature passed a plan to take the state closer to universal health coverage by building on the existing multi-payer Financing. No details. According to Rep. Sprinkle, the state insurance model. It leverages the structure and negotiated rates of Medicaid commissioner was prepared to obtain an actuarial estimate of the to create a “public option” plan on the state exchange. It should be premiums and costs once the bill was signed. The goal, he said, was to noted that although the plan would be available to all, it would not be offer a premium that “is affordable, but that is also not going to cause subsidized—making it a vehicle for incremental progress, while unlikely such marketplace disruption that we lose a private insurance industry to achieve universal coverage on its own. that we obviously need in the state.” Because the bill included no state subsidies for the plan, its effect on taxpayers would be minimal, with Elements of Reform. The Medicaid-buy in model —known as administrative costs built into the premium calculation. “Sprinkle Care” after its namesake and champion, State Rep. Mike Sprinkle, a Democrat – would have been the first state program to Governing Body/Decisionmaking. The Nevada Medicaid allow individuals of all incomes to buy into Medicaid, at full cost; low- Department would manage the new program, which would be income people who qualify for tax credits under the ACA would have separate from the Medicaid program. The department would have the option to use those credits to buy Medicaid-style coverage on the the option to contract with managed care organizations (MCOs), as it state’s Health Insurance Exchange. Employer-sponsored insurance does with four MCOs in the Medicaid program in the more populous and Medicare would have been maintained, but a commercial areas of Nevada. insurance product resembling the state’s Medicaid coverage would have provided consumers a new option and leveraged the state’s Outcome. In June 2017, Gov. Sandoval, a Republican, vetoed the lower Medicaid reimbursement rates. The bill was only four pages plan, writing that the legislation was “an undeveloped remedy to an long, and provided limited information on costs, premiums, and cost- undefined problem.” He also expressed concern that many people sharing. buying into the plan would be those with private insurance, rather than the uninsured. Proponents vowed to bring the plan back for Climate for Reform. Prior to the implementation of the ACA, 22% consideration in the next legislative session in 2019. of Nevada’s non-elderly population (522,200 people) were uninsured in 2013, one of the highest rates in the nation. A number of factors KEY INSIGHTS: accounted for the high rate of uninsured, including Nevada’s high rate of service sector jobs and low-wage jobs without health benefits, as • A Medicaid buy-in approach made sense in a state that saw its well as a high level of unemployment. uninsured rate decline significantly through Medicaid expansion. Under the ACA, that percentage was cut in half, primarily because • The bill passed quickly in reaction to the threat of ACA repeal and of Nevada’s Medicaid expansion, in which enrollment grew by 90%. particularly threats to federal Medicaid funding. Nevada’s Gov. Brian Sandoval was the first Republican Governor to choose to expand Medicaid after the Supreme Court made it • The plan had a short timeline for start-up, with a target date of optional. According to Rep. Sprinkle, the idea for the bill sprung from January 2019, with few details on how the plan would actually work. two dynamics: first, the new Administration’s support for a greater This likely contributed to its failure. state role in health reform decisions, and second, ambiguity and uncertainty around whether the ACA would continue to exist. A • The plan sought to build upon Nevada’s existing framework, which primary motive to move the bill was to give the Medicaid expansion includes four managed care companies with Medicaid contracts. In population an option to buy-in if the ACA were repealed and the so doing, it attempted to avoid severe pushback from the insurance state lost the significant federal subsidy that enabled it to expand industry. Medicaid in the first place. 7 EMERGING QUESTIONS AND THEMES This review summarizes prominent recent attempts at the state level to adopt health reforms that could improve health care access through expanding coverage to all residents. As such, each state operates as a case study in building, or failing to build, the popular and political will towards reform. What might we learn across the experience of very different states, proposing very different solutions? GETTING TO THE FINISH LINE BUILDING POLITICAL COALITIONS States that have pursued universal health coverage often have Although universal health care is often considered a Democratic relatively low percentages of uninsured residents, meaning that the issue, the example of Massachusetts shows that it can be a Republican gaps in coverage they have to fill may be small. But paradoxically, it one as well. Conversely, the example of Colorado shows that health may be harder to build the support to pass a broad proposal when reform can cause intraparty division and bipartisan opposition, the coverage problem is limited. In the face of small coverage gaps, especially if it conflicts with other party priorities. disruptive reforms may encounter majorities of the public fearful of changes to their existing coverage and thus more skeptical of change. COUNTERING THE OPPOSITION Single-payer proposals create the impression of larger government BUILDING PUBLIC SUPPORT at the expense of the private sector, while an all-payer model raises Educating the public about present health care costs and existing the specter of price setting and price caps. In either case, getting the financing mechanisms is key. An understanding of this dynamic is language right is essential, to avoid concepts that prompt immediate essential to understanding the “problem” and countering the message opposition. The example of Massachusetts shows that messaging of higher taxes. Financing through taxes leaves taxpayers (and the such as “shared responsibility” can be used to counter these objections proposals) vulnerable to health care costs that grow at greater rates effectively. than revenue sources. DETAILS FINANCING One unanswered question is whether including details in an initial These proposals had varying levels of information as to the financing proposal is a help or hindrance to initial buy-in. It may be the case for the reforms. Some efforts floundered by either not offering that when building upon existing frameworks, detailed plans are not information about how their policy would be fiscally sustainable, needed for buy-in; but when planning for disruptive change, detailed or by proposing drastic tax increases that faced backlash from the financing and payment plans are essential in fully educating the public, public and business community. Massachusetts found success by or opponents may fill the void with scare tactics. demonstrating the program could be paid for by reallocating existing funding sources and would require minimal new state funds, in the THE IMPORTANCE OF THE FEDERAL GOVERNMENT “shared responsibility” model. Implementing universal coverage in a state, by almost any mechanism, must involve buy-in from the federal government in terms of waiver STAKEHOLDER INVOLVEMENT approvals. It is important for proponents to understand what the Building a broad stakeholder coalition in support of coverage parameters of that approval might be, and to frame state debates expansion proposals is an important element of success in swaying within the context of the federal government’s likely reaction. public opinion and political support. Influential stakeholders who feel left out, or who feel their interests may be threatened, are likely to galvanize opposition to efforts to expand coverage. In particular, hospitals and other providers should be brought in early to address concerns about the long-term adequacy of payments. 8 FUTURE STATE EFFORTS Expanding health coverage to all people is a popular idea, but not a monolithic one. In the coming years, many states will consider a variety of approaches specific to their needs, population, economic characteristics, and political will for reform. Some state leaders are pursuing a single-payer model, and others are looking to find market-based solutions with a mix of public and private payers. UNITED STATES Our future analyses will examine and track developments at the state level to catalogue and OF CARE share lessons learned, and inform state lawmakers as they consider alternatives. As they do, we will update this review and build on the foundation of both the successes and the failures. Launched in February 2018, United States of Care is a non-partisan non-profit organization mobilizing stakeholders to achieve long- lasting solutions that make health care better for all. United States of Care aims to ensure every American has access to an affordable regular source of health care; protection from financial devastation due to illness or injury; and to accomplish this in an economically and politically sustainable fashion. UNITEDSTATESOFCARE.ORG @USOFCARE LEONARD DAVIS INSTITUTE OF HEALTH ECONOMICS Since 1967, the University of Pennsylvania’s Leonard Davis Institute of Health Economics (Penn LDI) has been the leading university institute dedicated to data-driven, policy- focused research that improves our nation’s health and health care. Penn LDI works on issues concerning health care reform, health care delivery, healthy behaviors, and vulnerable populations. Penn LDI connects all of Penn’s schools and the Children’s Hospital of Philadelphia through its more than 250 Senior Fellows. LDI.UPENN.EDU @PENNLDI This review was prepared by Janet Weiner, Rebecka Rosenquist, and Erin Hartman at Penn LDI. It was produced as part of a research partnership between United States of Care and Penn LDI, and we thank reviewers from both organizations for their valuable input. 9