Governors Offer Their Plan to Fix Obamacare. Will Congress Listen?

Aug. 31--As the prospects in Congress have shifted from repealing the Affordable Care Act (ACA) to fixing President Obama's signature achievement, governors haven't stopped lobbying Congress.

On Thursday, a bipartisan group of governors, led by Republican John Kasich of Ohio and Democrat John Hickenlooper of Colorado, wrote a letter to congressional leaders outlining their ideas for stabilizing the health insurance marketplaces.

Most of the people who buy insurance through the ACA qualify for Medicaid or subsidies, but those who don't have faced rising premiums and dwindling options for coverage. As of this week, though, every county in the country will have at least one option for insurance in 2018.

The letter itself comes with few surprises. In fact, much of what the governors are asking for has already been written about ad nauseam by health experts.

It's not unusual for governors to try and sway national policy. But on this issue, they have so far appeared to have a significant amount of influence, as even some of the most conservative governors cautioned Congress about the impacts of repealing the law without an immediate replacement plan.

Nevada Gov. Brian Sandoval was rumored to be the key reason U.S. Sen. Dean Heller voted 'no' on the first several repeal bills. Arizona Gov. Doug Ducey was thought to be behind U.S. Sen. John McCain's dramatic 'thumbs down' moment in July, which killed the prospect of repeal -- at least for now.

Next week, five governors will testify before Congress about the ACA. Two of them -- Hickenlooper and Steve Bullock of Montana -- signed the letter sent on Thursday.

But the question remains: How influential will governors be once Congress comes back from August recess?

Gail Wilensky, a health-care economist who was administrator of the Centers for Medicare and Medicaid Services during the H.W. Bush administration, is cautious.

"My concern isn't the substance of the letter. It's that the people who signed that letter are moderates. Moderates don't control Congress," she says.

Of the six other governors who signed Kasich and Hickenlooper's letter, one -- Sandoval -- is a Republican, and one -- Bill Walker of Alaska -- is an independent. The others are Democrats (Tom Wolf of Pennsylvania, Terry McAuliffe of Virginia, John Bel Edwards of Louisiana and Steve Bullock of Montana).

Like Wilensky, Matt Salo, executive director of the National Association of Medicaid Directors, is skeptical.

"Governors can have a very effective role in stopping bad policy from happening, but it's much harder for them to have an equally effective impact on promoting specific change," he says. "To get something prospectively passed, you need to grapple all the logistics, all the politics and all the fiscal impacts that make health policy so very difficult in this country today."

Most surprisingly, Kasich and Hickenlooper recommend keeping the individual mandate, something that's been unpopular even among some Democrats.

"For the time being it is perhaps the most important incentive for healthy people to enroll in coverage. Until Congress comes up with a better solution -- or states request waivers to implement a workable alternative -- the individual mandate is necessary to keep markets stable in the short term," the governors wrote.

The letter also asks the federal government to exempt insurers from the federal health insurance tax on exchange plans in counties with only one insurance option. That move is meant to incentivize insurers to start offering coverage again in places they deemed unprofitable.

Other policies in the letter are common bipartisan solutions that have been percolating for some time: funding cost-sharing reductions, streamlining the waiver process so states don't have to jump through so many hoops to implement changes, funding outreach efforts to get younger, healthier people to enroll, and funding reinsurance programs, which protect insurers from major financial losses.

Several of the governor's recommendations are in stark contrast to recent decisions made by the Trump administration. For example, late last month, the federal government ended contracts with two companies that helped people sign up for health insurance on the Obamacare marketplaces.

Mattie Quinn -- Staff Writer -- mquinn@governing.com -- @mattiekquinn

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