2018 Elections and State Health Policy: Expect More Innovation

Significant state health policy changes are on the horizon as a result of Tuesday’s elections, which ushered in new governors and political changes in state legislatures across the country. Seven governorships (IL, ME, MI, NV, NM, KS, and WI) will switch parties and be steered by Democrats who all campaigned on health policy proposals. The election also resulted in political shifts in state legislatures, with Democrats now controlling both the executive and legislative branches in Colorado, Illinois, Maine, Nevada, New Mexico, and New York. Here is an overview of state health policy initiatives that could emerge in 2019.

Gubernatorial changes: Twenty-six Republican and nine Democratic governorships were up for grabs this week. Democrats picked up seven (IL, KS, ME, MI, NV, NM, and WI), bringing the gubernatorial political split to 26 Republican and 23 Democratic, with the race in Georgia still undecided.

Statehouse changes: The election also resulted in changes in state government trifectas — where one political party holds the governorship and majorities in both houses. Elections in Kansas, Michigan and Wisconsin broke up Republican trifectas, while New Hampshire legislative wins ended that Republican power grip. Democrats picked up trifectas in Colorado, Illinois, Maine, Nevada, New Mexico, and New York, bringing the total number of Democratic trifectas to 14, compared to Republicans’ 22.

Medicaid Expansion

Kansas and Wisconsin, which had rejected the Affordable Care Act’s (ACA) Medicaid expansion, will now have Democratic governors who strongly support expansion, but they could face legislative resistance. In 2017, the Republican-controlled House and Senate in Kansas passed a Medicaid expansion bill, but lacked the votes to override Republican Gov. Sam Brownback’s veto. While Wisconsin’s legislature already covers childless adults with incomes up to 100 percent of the federal poverty level in Medicaid, it is unclear if the legislature, still controlled by Republicans, will support expansion. In Georgia’s race, where final votes were still being counted, Democrat Stacey Abrams made Medicaid expansion a central campaign issue, but if elected she would need the support of a Republican-controlled legislature.

In Maine, where a 2017 referendum approved Medicaid expansion, but its implementation was blocked by Republican Gov. Paul LePage, newly-elected Democratic Janet Mills will assure that it is carried out with support from the state’s newly-elected Democratic House and Senate. In Idaho, Nebraska, and Utah, voters followed Maine’s lead and supported ballot measures to expand Medicaid, which will provide coverage to an estimated 300,000 individuals in these states. Unlike what occurred in Maine, Idaho’s newly-elected Republican Gov. Brad Little indicated before the election that he would not block implementation of expansion if voters passed the initiative.

In Nebraska, the re-elected Republican governor strongly opposes expansion, but during his campaign signaled  the issue was up to the voters. Utah has submitted a waiver to federal officials to implement a partial Medicaid expansion that was approved by the state legislature, but with the passage of the ballot initiative full expansion will be implemented unless blocked by Gov. Gary Herbert, who has expressed opposition. Voters in Montana did not approve continuation of the state’s existing Medicaid expansion through a tobacco tax, and so the state legislature will need to decide before July 2019 whether to provide funding to continue the expansion.

Ohio’s new Republican Gov. Mike DeWine pledges to continue the Medicaid expansion there, but indicated he will impose “reasonable work requirements” on newly-eligible adults. Recently, under Gov. Rick Snyder, Michigan submitted a waiver request to implement work requirements for the expansion population, but Governor-elect Gretchen Whitmer has expressed opposition to Medicaid work requirements. Wisconsin also recently received federal approval to impose Medicaid work requirements on the childless adult population the state currently covers, and it is unclear if Governor-elect Tony Evers would seek to reverse these requirements.

Potential Comprehensive Health Coverage Reforms

Beyond Medicaid expansion, a number of newly-elected governors proposed comprehensive health coverage reforms. In New Mexico, Governor–elect Michelle Lujan Grisham, a former secretary of the state’s Department of Health, supports a Medicaid buy-in option. She also supports the New Mexico Health Security Act, a proposal to provide universal, publicly-supported health care based on a Medicare model through which commercial insurers provides supplemental coverage. In Illinois, Governor-elect J.B. Pritzker has called for implementing a Medicaid buy-in plan called “Illinois Cares” following an actuarial analysis to determine premium costs and cost sharing. Minnesota Governor-elect Tim Walz supports a public option modeled on MinnesotaCare, the state’s Basic Health Program. In Connecticut, Governor-elect Ned Lamont has proposed offering a Medicaid buy-in plan on the state’s exchange.

Maine’s Janet Mills calls for a public option – a Small Business Access Plan that includes self-employed individuals – that aggregates publicly-funded health plans and maximizes their buying power. In Colorado, Governor-elect Jared Polis wants to partner with other states to create a regional consortium with a common payer system to reduce costs, enhance coverage, and improve care quality.

Plans to Address Health System Costs

Polis in Colorado also proposed one of the most comprehensive state plans of the election season to address health care costs. He plans to target health care prices, noting that hospital consolidation or regions with only one hospital result in what he calls abuses of power in insurer–provider negotiations. He seeks more transparency in hospital pricing and stronger insurance rate review. His proposal could include creating a single geographic rating rule that would limit pricing differentials across the state, as well as examining the potential for global budgets to incentivize innovation, efficiency, and a focus on the social determinants of health. He also supports alternative payment approaches, including bundled payments and local models like community purchasing groups to level the playing field and ensure patients’ interests come before a hospital’s profit margin. Polis also wants to increase support for the state’s all-payer claims database (APCD) and use data to identify areas for cost savings.

Minnesota Governor-elect Tim Walz pledges to establish the One Minnesota Coalition to reduce health care costs and increase access. He also highlights the state’s medical research community and identifies opportunities to improve prevention strategies to reduce costs. In Connecticut, Governor-elect Ned Lamont identifies hospital consolidation as a cost driver and will seek legislation to address the issue and increase competition. He seeks a reasonable cap on facility fees, an end to surprise billing by facilities, and would require providers to publish plain-language disclosures of unexpected costs. Lamont also wants to reorient the state employee health care system around value-based care, require greater transparency from the state’s health care vendors, and implement innovations in preventive and primary care, such as on-site clinics that can improve employee health and productivity. Nevada’s Governor-elect Steve Sisolak plans to create a Patient Protection Commission to address health care prices and report recommendations addressing cost and access within 100 days.

Reinsurance and Proposals to Related to Individual Market Coverage

Newly-elected governors Whitmer of Michigan, Polis of Colorado, and Lamont of Connecticut all support a reinsurance program to lower rates in the individual insurance market. To improve affordability and access to individual health insurance, Lamont supports an extended open enrollment period for the state’s health insurance exchange, Access HealthCT. He plans to seek legislation to limit short-term plans to six months and require them to cover pre-existing conditions. Lamont, like Mills in Maine, vows to continue consumer protections in the ACA in the face of any federal roll-backs. In Nevada, Sisolak seeks to expand insurance options for the middle class who are not eligible for subsidies, and may consider a reinsurance plan for insurance companies that participate in rural markets. Maine’s Mills also supports well-regulated association health plans.

Reducing Prescription Drug Costs

Rising pharmaceutical costs is another issue that may receive more attention from a new slate of governors. A number of governors-elect indicated support for Canadian importation programs, maximizing purchasing power, alternative payment models, increased transparency, and other innovative plans to better control drug costs.

  • Importing drugs from Canada: Democratic governors-elect Polis and Evers have specific plans to end prescription drug price gouging, which both include importing drugs from Canada. Whitmer and Mills also highlighted Vermont’s recent drug importation legislation as a possible solution to curb rising drug prices in Michigan and Maine, respectively.
  • Increasing purchasing power: Four Democratic governors-elect — Evers in Wisconsin, Sisolak in Nevada, Michelle Lujan-Grisham in New Mexico and Mills in Maine — have expressed interest in bolstering their states’ purchasing power. Evers plans to partner with other states and require state agencies to work together to maximize Wisconsin’s bargaining. Sisolak aims to create Silver State Scripts, a network of insurance purchasers that would leverage its collective purchasing power for cheaper drugs. In Maine, Mills plans to explore pooling the purchasing power of public health plans to negotiate better deals. Similarly, Lujan-Grisham wants to harness New Mexico’s combined purchasing power of Medicaid and public employee and retiree health plans to drive down costs.
  • Holding pharmaceutical companies accountable: Many governors are eager to hold pharmaceutical companies accountable for the rising costs of prescription drugs. In Wisconsin, Evers’ pharmacy cost plan includes establishing a drug price review board and empowering a consumer watchdog to review pharmaceutical drug price increases. In Connecticut, Lamont wants manufacturers to report and justify price increases so the state can block unnecessary price hikes. Whitmer plans to implement transparency standards in Michigan modeled after existing laws in California, Nevada, Oregon and Vermont. Polis plans to improve support for Colorado’s APCD and require pharmaceutical companies to disclose pricing and justify any increases that outpace inflation. Ohio Republican Governor-elect DeWine also supports more transparency in drug pricing to address costs. Mills in Maine wants to hold pharmacy benefit managers to strict financial scrutiny.
  • Payment reform: A handful of governors-elect expressed plans to implement new payment models for prescription drugs. Evers wants to explore pay-for-performance and incentive-based pharmacy models in Wisconsin, while Lamont has expressed interest in value-based pricing models and a subscription model for Connecticut, similar to a plan recently proposed in Louisiana, in which the state pays a flat fee for access to certain drugs.
  • Other plans to tackle drug costs: Whitmer plans to repeal state Sen. Bill Schuette’s Drug Industry Immunity Law, which makes Michigan the only state in the country that gives pharmaceutical companies immunity from fraud charges. In Connecticut, Lamont is interested in implementing utilization management measures to better control drug spending. He wants to explore a model similar to New York’s Medicaid Drug Spending Cap, which allows the state to address excessive price increases and seek more reasonable rates.

Health Care Workforce

In New Mexico, Lujan Grisham supports new strategies to address health care workforce shortages. Polis is calling for more clinics and telehealth in rural Colorado, expanding providers’ scope of practice, licensing reciprocity to address workforce shortages, and possible expansion of the state’s health services corps. In Nevada, Sisolak has also vowed to address the severe shortage of medical professionals in the state by providing more vocational training and reforming Medicaid reimbursements to help retain primary care physicians. Whitmer has also taken on health care workforce issues, including addressing nursing shortages and expanding telemedicine. Other new governors from both parties have expressed support for increasing access to telemedicine to address provider shortages in rural areas, including those in Florida, Nevada, Oklahoma, and Tennessee.

Social Determinants of Health

Whitmer’s comprehensive proposals are framed as “Healthy Michigan, Healthy Economy” and address public health and the social determinants that drive costs, including proposals to address food insecurity, invest in outdoor recreation, raise the age to purchase tobacco to 21, and launch a “Get Fit Michigan” campaign. Lamont of Connecticut wants to invest in public health and the social determinants of health by incorporating interventions in housing, education, poverty, and the environment. In Ohio, DeWine calls for expanded wellness initiatives to improve health outcomes, including requiring Medicaid managed care plans to provide health education and promote prevention initiatives. Tennessee’s governor-elect plans to reduce preventable disease by providing patient education resources to encourage healthy lifestyles.

Addressing the Opioid Epidemic

Most candidates addressed the opioid crisis and highlighted initiatives to better address mental health issues. Among opioid proposals, Polis of Colorado supports more focus on the epidemic and better integration of physical and behavioral health care. Lamont of Connecticut plans to strengthen the state’s efforts to address the opioid crisis by appointing a cabinet-level position to coordinate a multi-agency response. In Ohio, DeWine proposes a 12-point comprehensive plan and advocates for a multi-faceted approach involving law enforcement, community outreach, and education. Michigan’s Whitmer seeks to expand treatment services, invest in treatment courts, and hold physicians and drug companies accountable.

Clearly, 2019 promises to be a year of lively state health policy debate and action across the nation. Along with the strategies outlined here, there will be new proposals from governors who may take a more market-driven approach to policy and who may seek to take advantage of new Trump Administration authorities to restructure health care and provide different options to consumers. The National Academy for State Health Policy will work with all states and continue to report on their progress in advancing health reform proposals.