Affordable Care Act: State Action Newsletter

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February 9, 2011

Court Rulings Differ on the Affordable Care Act

The U. S. District Court for the North District of Florida issued a ruling on January 31, 2011, granting summary judgment to the state of Florida in its challenge to the constitutionality of the federal Affordable Care Act.

The ruling found: 1) the individual mandate is unconstitutional; 2) the act as amended lacks a severability clause, thereby the finding on the individual mandate makes the entire act as amended unconstitutional; and 3) the challenge to the Medicaid expansion was without merit because states are free to leave the Medicaid program at will.

Three earlier federal district court rulings included some differing opinions, setting in place appeals to three separate federal circuit courts.

"The [Florida] ruling does not change the urgent need for state-based reforms, nor should it derail efforts in the states targeted at fixing a broken and unsustainable system," said Alabama state Rep. Greg Wren, a Republican and co-chair of NCSL’s Health Reform Task Force.

Most believe that the Florida ruling will have no immediate impact on ongoing implementation activities and that the cases(s) will eventually work their way to the United States Supreme Court.

Find more information on state actions challenging federal health reform here.        

Arizona Requests Medicaid Waiver 

On Jan. 20, the Arizona legislature passed legislation authorizing Gov. Jan Brewer’s request for a Medicaid waiver of the ACA’s Medicaid eligibility maintenance of effort (MOE). The MOE provision requires each state to maintain their Medicaid eligibility levels as of March 2010 until January 2014 as a condition of receiving federal support for Medicaid. If approved by CMS, the waiver would allow the state to eliminate Medicaid coverage for about 280,000 Arizona residents—mostly non-disabled, non-pregnant adults. Arizona continues to grapple with persistent budget gaps. Read Gov. Brewer’s letter.

Bills to Create Exchanges Filed in at least 21 States

At least 21 states have pending bills to create a health insurance exchange intending to meet the requirements of the Affordable Care Act. They include Alaska, Arizona, Connecticut, Hawaii, Illinois, Iowa, Indiana, Maryland, Mississippi, Montana, New Hampshire, New Jersey, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, Texas, Virginia, Washington and West Virginia. California passed legislation in the 2010 session making it the first state to pass such a law post- ACA. Massachusetts and Utah created and implemented a health insurance exchange before the passage of federal health reform. 

Visit NCSL’s Web site to get the details on the federal law and state implementation activities.

Model Legislation for Creating Health Insurance Exchanges from NAIC and NASI

The National Association of Insurance Commissioners (NAIC) released DRAFT model legislation in September 2010. The Health Benefit Exchange Model Act provides a broad framework under which state policymakers can begin to move forward with the process of creating an exchange. Unlike other model laws, it is not a rigid, one-size-fits-all structure for how to establish the exchanges, but rather offers flexibility and options for designing state laws. The National Academy of Social Insurance built upon the work of the NAIC to design a toolkit including recommendations for legislative language with alternatives and additions to the NAIC document for state policymakers. The toolkit , Designing an Exchange: A Toolkit for State Policymakers, also contains narratives that explain key issues.

NCSL Launches Health Reform Task Force

NCSL President Richard Moore has appointed a Task Force on Federal Health Reform Implementation, with more than 30 legislators and legislative staff members. The initial meeting in Phoenix on December 9, 2010 included details about Exchanges. Upcoming efforts “will help guide NCSL’s activities to assist legislatures” in understanding provisions and “to advocate for continued state flexibility and for adequate financial support.” The Task Force is co-chaired by Rep. Greg Wren of Alabama and Assemblyman Herb Conaway of New Jersey.  

 

Governors Request Flexibility for Health Insurance Exchanges

Twenty-one Republican governors sent a letter to HHS Secretary Kathleen Sebelius asking for more flexibility in the creation and operation of the health insurance exchanges on February 7. The letter asks for six changes to the law, including eliminating mandates on benefit coverage, creating a comprehensive plan for income verification of those who are eligible for federal subsidies and allowing states to move non-disabled Medicaid beneficiaries into the exchange.