Seven New York state unions have filed federal lawsuits against the state over what they claim is an unconstitutional increase in health care costs for retired workers. This is not a promising beginning for the Affordable Care Act (ACA), now that Kathleen Sebelius, Secretary of the U.S. Department of Health and Human Services (HHS), has given more power to the states in implementing the law.
HHS announced Dec. 16 that individual states will be left to select their own “benchmark” minimum health insurance plan under the national law. As a key step in defining universal health care in the U.S., determining minimum standards of health care should be done on a national level. Sebelius’ choice to delegate this duty to states is a cowardly attempt to evade tough decision-making, leading to a less efficient and effective policy of accommodation rather than full national change, and decreased federal accountability for the outcome of the ACA.
Under Section 1302 of the ACA, the Secretary of HHS is specifically assigned the task of establishing an “essential health benefits package” to determine minimum health coverage. Yet, HHS announced the transfer of the role to states as a way to give them “more flexibility” in implementing the ACA. Since the requirement is only to establish a benchmark, however, Sebelius could have done this while still leaving states plenty of freedom.
The law additionally requires the Secretary of Labor to conduct a survey of employer-sponsored coverage in order to determine the benefits typically covered by employers and to provide a report to Sebelius from which she is to base her decision. Instead, she will waste state resources by requiring each state government to go through this process of producing surveys and reports. Or possibly, states will forego the survey process, jeopardizing the quality of health care standards they establish.
The expectation for how states should set standards, as announced by the HHS, is for them to choose from one of 10 insurance plans pre-existing within each state. These include “one of the three largest small group plans in the state,” “one of three largest state employee health plans,” and so on. With 10 plans to choose from, it is likely that most states will choose the lowest quality plan. And the fact that many current insurance policies do not cover some of the benefits required by the ACA, such as oral and vision care, mitigates the advantages of allowing states to select from a pre-existing policy.
By delegating this responsibility to the states, Sebelius has also deflected federal, mainly executive, responsibility for the plan’s possible failure, though assuredly not its potential success. The unfolding details of the law will undoubtedly draw many critics: The greater the benefits, the higher the costs; yet the lower the benefits, the less successful the law – a trophy of Obama’s first term. With its validity and effectiveness questioned early on, the ACA is already in a weak position to affect change. Sebelius has further weakened it by giving up the federal government’s ability to establish a major component of how the law will affect the millions of uninsured people across the country.
Sebelius’ decision also minimizes the efficacy of the ACA by providing the opportunity for states to provide less than desirable coverage for uninsured Americans. Though the law establishes ten general categories as basic requirements for health coverage, it expands little beyond that. There are other “required elements for consideration” that are designed to ensure balanced and fair coverage, but the ACA still allows a great deal of room for variation. By leaving it up to states, over half of which have sued the federal government over the constitutionality of the law, Sebelius guarantees that at least some will try to provide health care at a level well below the mandate’s potential.
With the passage of the ACA as a move towards universal health care, the national government needs to be more involved in establishing the standards that will detail the bill’s vaguely stated requirements. Allowing states to determine their own benchmark plan is a disappointing indicator of the ACA’s potential to bring about actual change, representing a policy of accommodating existing practices rather than the real overhaul of health care that the U.S. needs. Should the Supreme Court uphold the ACA in 2012, the federal government needs to play a central role in overseeing its implementation throughout the states.
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