The brilliant legislative logicians that dreamed up (or forced) a 2014 start date for the exchanges, Medicaid expansion, many of the health insurance market reforms, and, yes, the mandate, will be very nervous. Could they have made it much harder for the court to rule against the law?
Had the implementation been one to two years sooner, a nullification of the law, or part thereof, would be dramatically more disruptive. The pressure would be enormous for something to be done to prevent that possibility. I gather 2014 was a budgetary necessity. How much harder would it have been to buy another year or year and a half? Was that completely out of the question?
The conventional wisdom as to why 2014 is the start date of the coverage expansions in the health reform law is that it's largely a budgetary gimmick: conservatives charge that this is intended to mask the law's deficit impact, liberals generally seem to accept that this is to lower the price tag over the 10-year budget window that the Congressional Budget Office uses in its analyses (note that these are different suggestions).
I'm not sure I buy that fiscal forecast finagling is the reason the timeline is what it is.
Simplifying a scenario or concept can sometimes be helpful for working out its basic principles. A physicist putting Newton's laws to work might deal at first only with idealized point particles for conceptual and calculational simplicity. For identical reasons, students of government might choose to assume that laws--public policies--are born whole in a triumphant, poly-penned signing ceremony at the White House, the culmination of a winding legislative process. But real objects are extended in space, not points. And policies take shape during an implementation process, their final form is not reached instantaneously.
To a large degree, implementation of the Affordable Care Act lies in the hands of states. Certainly that's the case with the big ticket coverage items in the law. The two mechanisms by which millions of people will be gaining health insurance are: 1) expansions of state Medicaid programs, and 2) the construction, by states, of state-run health insurance exchanges.
What does that mean? That means instead of one particular top-down federal solution--a national Medicare-like payer or a single federally-administered health insurance exchange--you're potentially going to see 51 unique exchanges and 51 state-tailored solutions to the strains the expansion will put on their Medicaid program. That means you have to navigate state legislative calendars, state budget and procurement cycles, and state-specific troubleshooting and customization of the ACA. That takes time.
Take insurance exchanges, the new insurance markets that will be created under the ACA (if you want to see what that looks like in a concrete sense, Wisconsin developed a prototype of an exchange web portal that you can play around with). Given that they have to throw the doors open and be live on January 1, 2014 that really means that by the fall of 2013 they have to be in the final stages of implementing all the functionality they'll need; indeed, as you can see from this helpful timeline, exchanges will likely have to actually start selling insurance by the late fall of 2013. This means that thirty months from now, they'll have to have determined which health plans they'll allow to be sold through their exchange and negotiations/contracting with health insurers will have to be in full swing. And by that point, the construction of the infrastructure supporting their exchanges will have to be well underway.
Seems like a long time to get to those end stages, doesn't it? But it's not. A common motto in states is some variation of "2014 is tomorrow" and, indeed, it is.
It's been ten months since the ACA was signed into law in March of 2010. In most states, the exchange-building process remains in its infancy. 2010 was a year for reflection (and, in some states, acceptance). Planning and coordinating bodies were formed in states to assess the health care landscape in the state, analyze the contents of the ACA, and synthesize the two to chart a course for the coming years.
Some of the key questions facing states as they consider the design of their exchanges are laid out in this article from the Denver Post on the process in Colorado:
More than 500,000 Coloradans who lack health insurance will use a new state-run exchange to get generous subsidies and comparison shop for a health plan — that much is a given.
What that consumer website — the centerpiece of national and state health care reform — will look like upon launch in 2014 is the next great task for medical and insurance leaders in Colorado.
Will it be a bare-bones, three-choices- and-good-luck Web page? Utah is going that route.
Or will Colorado take the activist route pioneered by Massachusetts and California, adding mandates for coverage, negotiating directly with insurers and carefully policing rates, complaints and care? Will insurance plans created by the state Medicaid office and Denver Health compete for customers alongside big names such as Kaiser, Anthem, Cigna or Rocky Mountain Health Plans?
And even before that, who creates and operates the exchange that will guide billions of dollars in health spending? A state agency controlled by the governor? A private nonprofit? A quasi-governmental board where legislators, Cabinet secretaries and insurance interests will vie for appointments?
But the very first question to be answered is still being deliberated in many states: should the state build an exchange at all? While all states are required by the ACA to have an exchange, states aren't required to design, construct, and run an exchange. If they decline, the federal government will step in and run one in the state. While many states have recommendations on this question from their planning bodies, the issue is not yet settled in most states.
The only state whose legislature has passed the enabling legislation required to create an exchange at the state level is California. The matter has been complicated by the fact that 2010 was an election year. Indeed, 37 states had gubernatorial elections and the result is that this year we have 23 first-time governors taking office. And gubernatorial turnover ripples through the upper echelons of the state government's health policy leadership.
The point of all this is that as we sit at the beginning of 2011, states have a lot of ground to cover in the next two and a half years. In addition to building exchanges (a significant undertaking in and of itself), they'll need to modify their Medicaid programs to absorb significant numbers of new enrollees. And at the intersection of these two responsibilities is the imperative to revamp their IT systems to handle the new eligibility and enrollment burdens the exchange and Medicaid expansion will place on them. There are additional things for states to focus on in implementing the ACA but we need not go into them here.
In addition to the intricacies and idiosyncrasies of state-level implementation, there is still a federal element to consider. When it comes to exchanges, even though states will (in most cases) be building them, there will still be some sort of federal regulations guiding them. States were asked to submit initial suggestions for these regulations to the feds months ago. I don't know when a draft product will be out but from what I've heard, a final product shouldn't be expected before this fall.
Suppose the year 2014 had been scratched out of the ACA before passage and the year 2012 substituted. Could we make this deadline? I would say almost certainly not, given where we are now and all that remains to be done. The original House legislation had an implementation date of 2013, a full year earlier than the final product that became law. But even that strikes me as potentially overly ambitious (though, remember, the House bill didn't have 51 exchanges being developed by 50 states and D.C. at their own pace, it relied on a national exchange) given that many states are waiting until the final federal regulations on exchanges are released to begin their state legislative process. That means we can probably expect many state legislative debates to wrap up in 2012 and their bills creating exchanges to be passed around that time. Then comes the actual implementation period with about 12-18 months to go. With a 2013 deadline, that would be six months to completely build an exchange.
You might argue that setting a 2013 date would've lit a fire under both the federal and state governments and all of this would be moving at an accelerated pace--the federal regulations, the state legislation, the state implementation process. But I'm not convinced there's any reason to believe that would actually be the case. As I said, state legislative calendars and procurement cycles place obstacles in the path of any would-be speed demons. The politics and the fiscal challenges facing states would still be the same, and these are minefields that must be navigated carefully. Additionally, in fleshing out the details of the ACA on the regulation-writing front, the feds have a lot on their plates right now. And there's plenty of reason to be wary of overly ambitious implementation target dates. Arguably, with the spate of provisions required to take effect in the first 6-9 months of the law's existence (deadlines which were often missed, if not by much), some of the law's early implementation was rushed to generate solid products that could be pointed to by the administration. We want to make sure, particularly for the big, enduring things like exchanges and Medicaid program revisions, that states get this right. And that requires having not only the resources but the time to get it right.
All this is my long-winded way of saying I suspect the 2014 start date isn't really all that unreasonable, given the enormous role the myriad states have in bringing the text of the law (and yet-to-be-written regulations) to life. We might wish it took less time to get from Presidential signature to functional program but the real world is messy.
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