ACA safe, but Hawaii needs waiver

The Patient Protection and Affordable Care Act of 2010 — the ACA, or “Obamacare,” for short — has laid the groundwork for improving access to health insurance. So it’s good to see that, in its Thursday ruling, the nation’s high court reaffirmed the law’s basic framework and given relief to millions who have secured health care coverage for the first time.

For Hawaii, and for many other states, having more certainty about the legal landscape is welcome relief after years of politically charged turbulence.

That’s to be celebrated, as long as the ACA is accepted as the first of a series of reforms to make the American health care system work more efficiently and effectively.

This state was a pioneer in broadening health care access, starting four decades ago with the passage of the Prepaid Health Care Act. Hawaii’s employer-based system of providing coverage has brought down the uninsured rate to one of the lowest levels in the country.

Ironically, that’s what made the one-size-fits-all approach of the ACA — one of the law’s principal weaknesses — such a problem here. Hawaii did not have a big enough pool of uninsured people whose purchases of health insurance could help sustain the operation of the Hawaii Health Connector, the “shop and compare” online insurance exchange.

The federal government found that exchange, the Hawaii Health Connector, to be out of compliance because it had not sold enough policies to keep the agency afloat without more infusions of cash from state taxpayers.

Given that the Connector was set up as a nonprofit that was endowed with more than $200 million in federal funds and supposed to become self-supporting, a bailout was hard for lawmakers to stomach.

Gov. David Ige pulled the plug on the Connector and, in consultation with federal officials, directed its 30,000 enrollees to transition to the federal exchange, Healthcare.gov.

Thanks to the U.S. Supreme Court 6-3 decision, these people will qualify for the same subsidies on the federal exchange as they got from the Connector, ensuring that the premiums will remain as affordable.

The worry has been that not all the plans offered on the federal exchange meet the higher bar set by the state’s Prepaid act. And if businesses turned to the federal exchange to buy plans for employees, there would be no enforcement of state requirements, meaning the state’s successful health insurance provision would be undermined.

State officials appear not to be worried that this will happen, and if the lack of enthusiasm among Hawaii’s businesses for the state exchange is any indication, perhaps there won’t be an exodus from the state health insurance program.

Before and after the implementation of the ACA, Hawaii business leaders were angling instead to take advantage of grandfather clauses enabling them to keep their current plans rather than switch, all to avoid the complexities imposed by the new federal rules.

Besides, said Beth Giesting, the state’s health care transformation coordinator, the state is already in the midst of petitioning for a waiver that should enable Hawaii to find more flexibility within the law’s requirements.

Giesting is part of the ACA State Innovation Waiver Task Force, preparing to request an “innovation waiver” for Hawaii from select provisions of the ACA. That waiver won’t take effect until Jan. 1, 2017, but actually the clock is already ticking.

The Ige administration must finalize its waiver proposal this fall so it can be presented for approval by the state Legislature.

The federal authorities want six months to review the proposal, so getting it through the coming lawmaking session is essential.

Giesting’s office presented a preliminary report this past session on the issue.

According to that report, it’s already clear that the state could get a waiver from definitions of plan types and required benefits, the rules concerning exchanges and many other sections of the law.

Clearly what needs to emerge is a waiver proposal that embraces the best parts of the ACA — the coverage guarantees for those with pre-existing conditions, for example, and coverage for children up to age 26 — but keeps the framework as similar to the Prepaid Health Care Act as possible.

The state law has surpassed Obamacare, in the breadth of coverage and the level of benefits, among other ways. Being allowed to preserve that successful model as a launching pad for further improvements would be the best outcome for Hawaii.