Affordable Care Act: State Action Newsletter

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June 3, 2011

Vermont’s Single Payer Becomes Law

On May 26, Vermont Governor Peter Shumlin signed HB202, which sets the state on a path to creating the first single payer insurance system in America. “The new law lays out three tasks: immediate efforts to control health care costs, creation of a Health Insurance Exchange, and detailed planning to implement a single payer system,” he said.

• The law creates a health care oversight board to control the rate of growth in health care costs, such as health insurance premiums. The new board, to begin operating in October, is to work with providers to create a system of payment that rewards providers for efficient, effective practices that keep people healthy and reduce administrative waste, among other things.

• The health insurance exchange, a health insurance marketplace required by the Affordable Care Act, is created by the new law to simplify the purchase of insurance.

• The law also requires detailed planning for a universal health care system that is nearly a single payer system—federal and military employees would be exempt. In a press release Gov. Shumlin said, “The single payer health care system will maximize savings and take health insurance off the backs of employers.” 

As reported in the May 6 edition of this newsletter, implementation of the “Green Mountain Care” universal system is conditional on receiving the needed federal waivers and legislative approval of a financing plan.

Maryland Governor Appoints Exchange Board

Maryland is one of eight¹ states that have passed legislation to establish health insurance exchanges since the passage of the Affordable Care Act. Although each state’s exchange timeline and role for its board varies, Maryland is the second state to appoint exchange board members.

Health insurance exchange boards serve as the oversight body for the exchange. Board duties may include ensuring that all federal requirements are met; deciding which carriers to include in the exchanges; appointing an executive director of the exchange; and other implementation and oversight decisions.

Maryland’s enabling legislation allowed Governor Martin O’Malley to appoint six members of the exchange board, three of whom were appointed in consultation with the Senate. Enrique Martinez-Vidal, vice president at AcademyHealth and director of the State Coverage Initiatives program, was appointed chair of Maryland’s Health Benefit Exchange. A complete list of members is included in the governor’s press release. The board of trustees of the exchange also includes the secretary of health and mental hygiene, the insurance commissioner, and the executive director of the Maryland Health Care Commission.

¹  In addition to Maryland; California, Colorado, North Dakota, Vermont, Virginia, West Virginia, and Washington have laws that establish health insurance exchanges. 

Some States Pursue Health Compacts

Bill Status Updated: March 26, 2012 

State lawmakers opposed to the Affordable Care Act are taking a new approach in their efforts to opt out of the federal law. Legislation to create an interstate health compact giving states primary responsibility for regulating health care goods and services (except military) has been considered in at least a dozen states in 2011.  As of late March, 2012 a total of 25 states have considered interstate compact legislation and six have been signed into law.¹ 

Drafters at the Health Care Compact Alliance say it is simply "an agreement between two or more states that is consented to by Congress—that 'restores' authority and responsibility for health care regulation to the member states" and provides the funds to the states to fulfill that responsibility. States that agree to form a compact must pass identical compact language and enact separate statutes defining, or making it a crime to interfere with, health freedoms. 

Most of the measures filed in the past 12 months also include this provision:  “Each Member State… may suspend by legislation the operation of all federal laws, rules, regulations, and orders regarding Health Care that are inconsistent with the laws and regulations adopted by the member state pursuant to this compact."  The creation of any interstate compact requires formal congressional approval - a separate and future step. 

Of the health compact bills introduced in 16 states in 2011, four have been signed into law: Georgia H 461 on April 20 and Oklahoma S 722 on May 18. Missouri’s H 423 passed both chambers and became law without the governor's signature on July 14.  An Interstate health compact bill passed the Texas House and Senate and was signed by the governor on July 19, 2011.

In 2012, Utah enacted S 208, which was signed by the governor March 19, 2012.  One day later, Indiana's enacted H 1269 was signed by the governor as Chapter 150 of 2012.

Vetoes:  Arizona's legislature enacted S 1088 and S 1592, but Governor Brewer vetoed both in April. Her veto message stated it would result in additional fiscal challenges for the health care system and violate the state's separation of powers. Montana's H 526 passed, but was vetoed on May 12.

For 2012, Eight additional states have newly filed bills: Alabama, Florida, Kansas, Minnesota, New Hampshire, South Dakota, Utah (signed 3/19/12)  and Virginia.

Similar bills in Colorado, Indiana, Louisiana, Michigan, New Mexico, North Dakota, Ohio, South Carolina, Tennessee and Washington did not pass before adjournment in 2011. 

The U.S. Constitution (Article 1, Section 10) grants states the right to enter into agreements with other states for their common benefit. Historically, these compacts have been used to address common problems among states, such as border disputes, creating governmental commissions and establishing common guidelines for agencies in the member states. Any compact that increases the political power of the member states must be approved by Congress. Interstate compacts addressing criminal justice matters may be granted an exemption from Congressional approval under limited circumstances.

¹  The proposed Interstate Health Compacts have no legal relation to compacts that are authorized by the Affordable Care Act, which include "regional health compacts" (Sec. 1331) or "health care choice compacts" for 2 or more states to offer insurance policies (Sec. 1333).