Kasich/Hickenlooper, ObamaCare by a Different Name

Rea S. Hederman Jr. Sep 13, 2017

Ohio Governor John Kasich and Colorado Governor John Hickenlooper issued a letter that laid out their ideas for fixing the Affordable Care Act. In a nutshell, the plan’s goal is to increase government spending and enforce the individual mandate in an effort to prop up the ACA insurance markets. Unfortunately, simply spending more taxpayer money does little to fix a core flaw of the ACA – heavily regulating insurance companies – which has driven up premiums and caused insurers to leave markets and leave Ohioans with few or no insurance options.

It is disappointing that the governor of Ohio would propose keeping the ACA’s individual mandate, when in 2011 Ohio passed a state constitutional amendment calling for the end of the individual mandate. In Governor Kasich’s first term in office, almost two-thirds of Ohio voters voted to enshrine an amendment that would prevent state level individual mandates. In 2015, Governor Kasich signed into a law a budget that called for Ohio to seek relief from individual and employer mandates utilizing a state innovation waiver. In the Kasich/Hikenlooper plan, Governor Kasich reverses himself and is now calling for an individual mandate.

All the governors who signed the Kasich/Hickenlooper letter recognize that the individual market in the ACA is failing and their citizens cannot find insurance. The plan’s alternative is to allow citizens to buy into the federal insurance program if there is only one insurer in their area. However, federal insurance has expensive premiums that would be unaffordable by many Ohioans and would not solve the problem of skyrocketing insurance costs in these counties.

Other provisions in the Kasich/Hickenlooper plan have similar flaws – increasing government spending as a way to keep insurance cost lows. These are temporary solutions at the cost of higher taxes on taxpayers. The one group that will benefit from the plan is insurance companies, because the plan asks the federal government to give more money to insurers through a provision called “cost-sharing reductions.” Since the ACA increased the cost of insurance, the ACA also forced insurers to make additional payments and subsidies to low-income people. These subsidies and payments are called cost-sharing reductions because they can take the form of help with insurance deductibles or co-payments.

The one area the Kasich/Hickenlooper get right is its attempt to improve the use of state innovation waivers with a call to repeal the Obama era guidance from 2015. Rescinding that guidance would be a step forward and Congress should go further and allow more of the insurance regulations to be waived under state innovation waivers. However, this positive aspect of the governor’s proposal does not offset the other problems with the proposal. 

Disappointingly, the Kasich/Hickenlooper plan will not fix the problem that regulations imposed by Washington, DC have caused in the state insurance markets. Prior to the ACA, Ohio had more than 50 insurers competing for business in the state and today there are several counties with only one insurer. Higher government spending will not fix the fundamental problem of the ACA, which is making insurance unaffordable for too many Americans.

It is time for Washington to stop imposing one-size-fits-all solutions that don’t work and return insurance regulations to states.

Rea S. Hederman Jr. is executive vice president and chief operating officer at The Buckeye Institute and is an expert in health care policy.