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Observation: Health Reform: States Move Forward with Implementation January 2011

Health Reform: States Move Forward with Implementation

By Courtney Burke
Director, New York State Health Policy Research Center

Courtney Burke

Lawmakers in the U.S. House of Representatives are voting this week to repeal the health reform law that passed in 2010, known as the Patient Protection and Affordable Care Act. The law is also being challenged in the courts by a number of state attorneys general.

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Courtney Burke is director of the Rockefeller Institute’s New York State Health Policy Research Center (HPRC). Her research focuses primarily on topics related to Medicaid and the Children’s Health Insurance Program, including long-term care issues.

Yet in spite of these actions, states continue to move forward with reform implementation, for a number of reasons.

First, legal challenges to the law will likely take several months, if not years, to be resolved, and the repeal vote in the House is largely symbolic: Passage of a similar bill in the Senate is currently unlikely, and opponents of the law would have to win the White House and a majority in the Senate for a successful repeal. There already are conflicting court rulings about the law, with one decision in Virginia determining that a requirement that individuals purchase health insurance is an overreach of federal authority. Conversely, other court cases, such as ones in Virginia and Michigan, have made the opposite ruling. While the rulings are being sorted out, states may institute insurance purchasing mandates of their own. Currently, Massachusetts is the only state to have a health insurance mandate, but nothing precludes other states from pursuing a similar strategy. The purpose of the mandate is to bring healthier individuals into the pool of people purchasing insurance, thereby lowering the overall cost of insurance for everyone.

Second, many provisions of the law have already begun, and several others will soon take effect that will require states to move forward with implementation. For example:

  • At least 22 states have recently started or expanded operation of high-risk pools for adults unable to obtain insurance due to pre-existing conditions;

  • All states are examining whether they need to change regulations in their insurance markets to meet new requirements under the federal law;

  • States are helping residents understand how to take advantage of new health benefits available to early retirees and helping small businesses understand available tax credits by updating Web sites and outreach activities; and

  • States are determining how best to construct insurance exchanges, or marketplaces where consumers can choose from different insurance products, and potentially receive a subsidy to purchase their insurance.

A third reason states are moving forward is that the mandate that individuals purchase health insurance, the section of the legislation that is the target of the most legal challenges, is only one part of the law and a ruling on its legality may not affect remaining parts of the legislation. In addition, some parts of the legislation are likely to be more broadly supported, such as making prescription drugs more affordable for seniors, and no longer allowing insurance companies to rescind consumers’ policies.

Fourth, it will be difficult for some states not to embrace some opportunities in the law, which will provide billions of dollars in federal funding for such things as setting up insurance exchanges or enrolling more people in health insurance plans. Additional grants for states will be given out in the near future. These grants will reward states and providers for implementing new and innovative delivery systems, or for creating efficiencies. Nearly every state has already received funding from the law for one purpose or another. Many are weighing the benefits against the costs of administering the law, but turning down federal dollars is a tough proposition for cash-strapped states.

Fifth, regardless of whether federal reform moves ahead as passed, states know that they must seek ways to address rising health care costs and to cover the uninsured. States like Utah and Massachusetts have already set up state insurance exchanges — marketplaces where people can buy insurance — well ahead of the federally mandated date of January 1, 2014, and many other states may follow suit this year. States don’t have the luxury of waiting, since setting up exchanges will take time, and exchanges are one of the more widely supported aspects of the legislation. Laws must be passed and administrative mechanisms put in place soon.

There is a lot involved with implementation of the federal health-care law, and states are playing a fundamental role. As legal and political challenges make their way through legislatures and the court system, regardless of one’s position on the legislation, one thing is certain: the gears of state government will continue to keep changes in health-care financing and delivery moving forward.


The Nelson A. Rockefeller Institute of Government, the public policy research arm of the State University of New York, conducts fiscal and programmatic research on American state and local governments. It works closely with federal, state, and local government agencies nationally and in New York, and draws on the State University’s rich intellectual resources and on networks of public policy academic experts throughout the country.