Wyden pushing for accelerated waiver process, waiver of mandate

Last week, Sam Stein reported on Sen. Ron Wyden's efforts to get his home state of Oregon exempted from some of the Affordable Care Act reforms. I spoke with Wyden about his efforts.

First, as Stein reports, Wyden is going to introduce legislation that would move up the start date for state waivers--included in a provision he helped get into the final bill--by three years, and to attempt to get a waiver for Oregon itself even earlier.

The Oregon Democrat is seeking to take advantage of a provision he helped write into the legislation that allows states to set up their own health care systems as long as they meet minimal requirements established by the Department of Health and Human Services. In a letter to the state's Health Authority office, Wyden announced that he will introduce legislation to accelerate the start date for state waivers from 2017 to 2014, if not earlier for Oregon specifically.

In addition, he strongly suggested that the state should use the provision to exempt Oregon from the individual mandate, which would penalize those individuals who refuse to purchase insurance coverage. The mandate was a feature of Wyden's own health care bill but has proved to be remarkably unpopular among voters.

Wyden says that there's both policy and political considerations behind his efforts. The politics first. He thinks the debate can be changed if individual states are given more of an opportunity--and given it sooner--to shape how the exchanges will work in individual states. This, he says, could "put the attorneys geenral in the states that are suing on the spot--make them innovate rather than litigate" on health reform. He says in conversations with governors around the country, including Republican governors, they recognize that repeal of the Affordable Care Act and successful lawsuits against it aren't feasible, and what they need to do is start working on ways to make the reforms work for their own states.

As far as exemptions from the individual mandate are concerned, as the waiver was written into the law, states can only get an exemption from the federal individual mandate if they can come up with a better way to achieve the federal coverage requirements locally, so this is far from what some on the other side of the aisle seem to be proposing when they say that their states should be exempted from health reform. States will still have to abide by the Affordable Care Act, but would have more flexibility in doing so.

Wyden is coming from a very Oregon-based perspective, given Oregon's history of innovation in health care reforms, that if a state can come up with a better way of covering its citizens they should have the leeway to innovate. In other words, what works in Oyster Bay, New York isn’t necessarily what’s best for Coos Bay, Oregon. Wyden believes that Oregon can do even better than the national law and can help serve as a model for what other states and even the federal government can achieve. For example, if Oregon can implement a public option and demonstrate how effective it can be at holding down costs, providing better coverage, forcing private insurers to compete, etc. etc. then it becomes easier to argue for a public option in other states or on the national level. He predicts that Oregon will be the first state in the nation to have a public option.

When asked about the ability of individual states to have much impact in the insurance market and achieve significant cost containment, Wyden conceded that economies of scale could work against them, but that the ACA and the waiver provision also allow for regional exchanges which could be "much more aggressive in holding insurance companies accountable." Larger, regional exchanges would provide more people--and more healthy people--participating in the exchanges. Combined with a public option, these larger exchange populations could have a maximum amount of bargaining power within the exchange.

Thus far, Oregon state officials are eager to work with Wyden. In a letter [pdf] from Oregon Health Authority director Bruce Goldberg, provides his strong support for Wyden's effort.

...Oregon began planning for a health insurance exchange about a year ago. Given teh work we have done to date, I believe we are in the position to begin piloting an exchange relatively quickly, In fact, with insurance exchanges as the centerpiece of national health reform, I believe it would be most beneficial to the nation and Federal agencies for a state of the size and demographics of Oregon to go early with an exchange. This would allow us to test a variety of the systems and policies that will be necessary for national success and for other states to learn from.

That's what Wyden is hoping for. Oregon certaily does have the potential to lead the way for the nation in shaping how this law is implemented. Of course, politics can get in the way. He doesn't expect his legislation to accelerate the waiver start date to be taken up this session, and the potential loss of the majority in Congress could be a setback. But he says states are looking for more flexibility and innovation in the law, and he believes there will be support for his effort from the nation's governors and legislators. In the near term, like between now and November, he's not going to be able to change the political debate. But after the dust of this election settles, it's possible that he'll be able to redirect the debate somewhat.

(Disclosure, I worked for Wyden from 1987-93, when he was in the House of Representatives.)