Actions by the federal government have taken health care out of the hands of state officials and centralized it in Washington. The result: families are paying ever higher health insurance premiums for coverage they often do not want or need. This means less money to pay other bills, college tuition, or even buy food. And although federal policies to expand Medicaid had the best of intentions, the program has been drastically altered and is having the unintended consequence of trapping people in low-paying jobs or encouraging them to leave the workforce or work fewer hours so they qualify for Medicaid.
The good news is, this trend is reversing and the federal government is giving states new flexibility to fix their health insurance markets. While having to ask the federal government for permission is not the optimal strategy, it is an improvement, and Ohio is taking advantage of this opportunity.
On March 30, Ohio became the first state to file a state innovation or 1332 waiver, which will eliminate the individual mandate penalty for Ohioans for the next five years. If approved, the waiver will protect Ohioans from being forced to buy a product they do not want or need. In fact, in November of 2011 Ohioans overwhelmingly passed a state constitutional amendment opposing this federal mandate, recognizing that they know better than the federal government how to spend their own money.
While Ohio is the first state to use the 1332 waiver to eliminate the individual mandate, other states have used the waivers to try and stabilize their individual insurance markets.
While Ohio’s 1332 waiver request is a good start, the state must continue to utilize the waiver process to improve our health care system. For example, Ohio should look for ways to waive the employer mandate and should push the Trump administration to issue new guidance on how innovation waivers can be used to exempt employers from the mandate fine. These changes would enable Ohio businesses to provide more job opportunities to Ohioans.
The 1332 waiver isn’t the only one Ohio is pursuing. The state is finalizing its application for the Medicaid community engagement waiver, which, as we said in our public comments, will help healthy, able-bodied adults gain work experience and learn new skills. These new skills will result in higher lifetime earnings and income, and as we learned from the bipartisan welfare reform law of the 1990s, will encourage recipients to work.
Ohio’s Medicaid community engagement waiver is an important, but only a single, step in Medicaid reform. Neighboring states like Kentucky and Indiana have submitted stronger reform packages that combine community engagement with other reforms such health savings accounts, better benefits for recipients who engage in healthy behaviors, and cost-sharing provisions. These reforms will help Medicaid recipients obtain private coverage, which has been shown to offer better care than Medicaid.
To serve Ohioans best, policymakers should develop a comprehensive Medicaid reform plan with the goals of helping Medicaid recipients obtain and keep private coverage, and getting access to the care that meets their needs.
Up until this point, the federal government’s approach to health care has been a one-size-fits-all solution. This approach has not worked and does not give states the flexibility they need to fix or make improvements to their health insurance markets. It now appears that the federal government is willing to work with the states and Ohio should seize this opportunity to make bold improvements to its system that will better serve Ohioans and their families.
Rea S. Hederman Jr. is executive director of the Economic Research Center at The Buckeye Institute and vice president of policy. A nationally recognized health care policy expert, Hederman is the co-author of Returning Health Care Power to the States.