In its latest attempt to make a virtue of necessity, the Wyoming legislature is prepared to wait until 2015 or later to decide if the state will take even partial control over the state’s insurance marketplace under “Obamacare,” the federal healthcare law that will take effect in January.
Beginning next year, the Affordable Care Act will require every Wyoming citizen who is not an enrolled member of an Indian tribe to purchase health insurance or pay a tax penalty at the end of the year. Wyoming residents will begin the new era in healthcare this October by shopping for policies on a website run by the federal government.
If the state legislature had not tied its own hands with laws that prevented it from acting, Wyoming could be in a position today to build and oversee a health insurance exchange without the feds. Legislators and consumer advocates worry that a federal, one-size-fits-all online marketplace may not fit the special needs of a rural state without much managed care.
Although the state missed every deadline necessary to take control of Wyoming’s healthcare marketplace, legislators now maintain that doing nothing was the best policy all along.
“Frankly, I think we were wise to go down the road of letting the federal government do the exchange for this state to start with,” said Sen. Charles E. Scott (R-Casper) co-chair of the committee created to study issues in the health insurance marketplace. “You can’t do anything in this state without some problems. And if the feds are running it, if it is their law, their regulations, and they can’t blame somebody else. They have to fix it themselves.”
Scott believes that the state will be best served by studying the problems and possible solutions found in Wyoming and other states during 2014 and perhaps 2015 before making a decision. The decision could be delayed until the budget session in the spring of 2016, he said.
Whatever merit one finds in Scott’s argument, the now familiar fact is that state lawmakers left Wyoming no choice but to start with a federally run exchange. Gov. Matt Mead joined 31 other states in a national lawsuit against the Affordable Care Act as soon as he took office in January 2011, reinforcing what was already statewide opposition to the bill. The 2012 state legislature stopped almost two years of study on the ACA when it passed a law forbidding any Wyoming official to take action implementing the new law before the 2013 legislative session ended. Lawmakers, quoted in WyoFile and elsewhere, hoped that the U.S. Supreme Court would overturn the law or that Republican victories in the national elections in November would lead to repeal.
None of that happened, of course. Obamacare remains the law of the land, and while other Western states that opposed the ACA have changed course and begun creating state-run exchanges — Washington, Idaho, Utah, Nevada and Colorado, for example — Wyoming has held back. When the 2013 legislature created a select committee to study the health insurance exchanges, it was picking up more or less where it had left off in 2011.
The committee, co-chaired by Scott and Elaine Harvey (R-Lovell) met for the first time in Casper on April 12.
“The charge of this committee is to figure out whether Wyoming should take over the exchange for this state, do a partnership with the federal government, or continue down the road of letting the federal government run the exchange,” Scott said at the first meeting. That’s the same question that was on the table in all 50 states in 2010.
The committee is to make a preliminary report to Gov. Matt Mead and the Joint Labor, Health and Social Services Committee by Dec. 1, 2013. It is to continue studying the exchanges in Wyoming and elsewhere through 2014, according to the text of the law that established the committee.
“I’m content with the timetable,” Scott said. “We need to see the federal exchange in operation and we need to see the exchanges in the other states in operation. We’re going to learn a hell of a lot from that process. And it makes sense to learn that and it makes sense to learn that before we make our move.”
Scott also sees no downside to keeping the state out of the process at this stage. In his view, if things go wrong, the federal government is implementing a federal law. There is no question that the federal government needs to fix the problems.
“If you get a mixed federal state system,” he said, “you run the risk that the two bureaucracies will point fingers at each other.”
For some longtime advocates of state healthcare reform, this approach is too passive. Instead of embracing an opportunity, the legislature’s “study” approach looks like sitting back and waiting to see what goes wrong. What is lacking, they say, is a positive, optimistic attitude.
“I encourage the group to think about how this can be a solution,” said Anne Ladd, CEO of the Wyoming Business Coalition on Health, in her testimony before the committee. “It is now the law of the land. We have to stop stamping our collective little foot and saying, ‘I hate it, I hate it, I hate it’ and try to find out how to work with it constructively.”
Ladd said she expected the exchanges to help small businesses, which struggle to find appropriate benefit plans for employees. Simply comparing plans can absorb an enormous amount of time.
“When you are looking for coverage,” she said, “it is easily a 100 hours a year for small employers. That 100-hour year can be put to more productive uses.”
Ladd said the sort of apples-to-apples comparison her clients need is exemplified by her experience buying a pressure cooker on Amazon.com.
“It was really fun to be able to go to the consumer reviews of the pressure cookers and to see which ones people liked,” said Ladd, who is a member of WyoFile’s board of directors. “I think it’s really important that we provide that kind of service to our community. It will help them.”
In response to Ladd, Harvey pointed out a difference in the experience consumers might have when they are buying health insurance instead of pressure cookers.
“Amazon did not call you and tell you that you were going to have a pressure cooker,” Harvey said. “And they did not tell you that this is what you are going to pay for a pressure cooker. When you went online, you were able to look at brands and features and a lot of different things. But then, as you looked at those prices, you were able to determine what you wanted. Or if you wanted it at all.”
Harvey, as she has throughout the ACA deliberations in Cheyenne, took the federal government to task for not providing the information necessary to make informed choices.
“It’s April,” she said. “Just before enrollment starts in October. And we still don’t even know what plans are available, what the prices are. We don’t know what features they will have. My frustration is two years of meeting with the federal government and getting no answers.”
Answers to some of these questions, in broad strokes at least, surfaced in a presentation by Tom Hirsig, the state insurance commissioner. But the law is complicated and, Hirsig pointed out, consumers and employers were not well informed about the new law. A big PR campaign would be necessary to help people become aware of what coverage was available.
In an interview after the meeting, Scott said the laws passed in Cheyenne last session give the insurance commissioner a way to do some advertising that will explicitly address these issues and a way to fund it, “essentially by assessing the insurance companies.”
But even a well-informed consumer or employer must make some complex decisions.
For example, Hirsig told the committee, consumers who expect subsidies for health insurance need to begin by identifying the level of coverage that can be subsidized.
The new health care plans will come in four levels: platinum, gold, silver and bronze. In general, the platinum plan would pay 90 percent of costs with the individual chipping in 10 percent. The gold plan would pay 80 percent, the silver 70 percent and the bronze 60 percent of the cost of coverage, based on actuarial averages if not individual medical bills. In many respects the bronze plan will function like catastrophic insurance, Hirsig said.
Subsidies and tax credits for consumers who earn less than 400 percent of poverty would be based not on the top platinum plan but on the silver plan.
“If consumers are eligible for a subsidy and want more coverage than the silver plan, they will have to pay 100 percent of the difference,” Hirsig said.
Such fine distinctions abound in the law, which spells out in some detail how a small business must calculate the number of workers and their average salaries to determine if they must provide health insurance and if they can receive tax credits for doing so.
Hirsig also explained how the penalties for not buying insurance will rise over the next three years. In 2014, those who do not have medical insurance will pay $95 per adult up to $285 or 1 percent of household income, whichever is higher.
By 2015, that penalty will rise to $695 per adult up to $2,085 or 2.5 percent of household income. Penalties for children are half of an adult penalty. Beginning in 2016, penalties will be indexed to CPI.
The sheer volume of information in the law promises to be overwhelming, especially for people who are not online and do not read a newspaper regularly. Many people will need help understanding the law.
“Look at us,” Scott said. “We’re so called experts on health care. We don’t understand it very well. The individual consumer is going to have a hell of a time.”
Some observers of the law feel that the benefits offered to the consumer may be the best hope for Obamacare’s survival.
“Insurance companies will have to compete on performance instead of price,” said Barb Rea, a member of Consumer Advocates: Project Healthcare. “If Wyoming people get good coverage and start to like it, the legislature might be willing to create a better product for consumers.”
— Ron Feemster covers the Wind River Indian Reservation for WyoFile in addition to his duties as a general reporter. Feemster was a Visiting Professor of Journalism at the Indian Institute of Journalism & New Media in Bangalore, India, and previously taught journalism at Northwest College in Powell. He has reported for The New York Times, Associated Press, Newsday, NPR and others. Contact Ron at firstname.lastname@example.org.