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2017 State Policy Review: Health Care & Wellness

By Bill Kramer | January 11, 2018

State lawmakers kept an eye on federal health care action in 2017, but they didn't remain idle as states face growing health care costs, an opioid crisis, and the growing popularity of marijuana legalization.

This is the sixth post in a series reviewing the top state issues of 2017 and previewing what's ahead in 2018. Earlier posts covered state budget issues, transportation and infrastructure, data privacy, taxation, and employment and labor issues.

Will States Step In to Save the ACA's Individual Mandate?
In December, President Donald Trump signed the long-awaited tax reform legislation into law. One often overlooked aspect of the legislation was the repeal of the Affordable Care Act's (ACA) individual mandate, which required individuals to secure health insurance or pay a financial penalty to the IRS. One of the ACA's three legs of the stool — vital, interlocking parts of the law — the individual mandate survived legal challenges in 2012.

The Congressional Budget Office projects that the individual mandate repeal will result in millions of people declining to purchase health insurance, raising health care premiums and potentially destabilizing state health insurance markets. However, states have the option to enact their own mandates, similar to the mandate that Massachusetts set up before the ACA's enactment. Several blue states are already looking into this option.

The purpose of a statewide individual mandate would be to help stabilize health care marketplaces and lower premiums. States would also have the freedom to design the financial penalties for individuals refusing to secure health insurance, and any resulting revenues would flow to state budgets instead of the federal government. Budget-crunched state policymakers may find this additional source of revenue appealing.

Similar to this time last year, there are more questions than answers when it comes to U.S. health care policy. But one thing is fairly certain: with tax reform, states will be recapturing some control from the ACA, and the health care industry, consumers, and state budget officers will be closely watching what they do with it.

State Lawmakers Struggle to Solve the Opioid Crisis
The opioid epidemic remains a ballooning public health crisis with upwards of 91 Americans dying from opioid overdoses each day. State lawmakers continue to introduce, debate, and pass legislation in the hopes of solving this crisis.

Abuse-deterrent opioid formulations (ADF) are specialized drugs with extended-release mechanisms that prevent users from manipulating the drug’s chemical delivery systems. State lawmakers are attempting to curb the number of future addicts by passing legislation requiring health plans to provide coverage for ADF drugs, which can be prohibitively more expensive than their generic counterparts. By improving access to ADF drugs, these lawmakers aim to keep opioids out of the hands of patients at risk of addiction. However, only five states successfully passed legislation with ADF insurance requirements in 2017. We identified nearly a 50-percent drop in ADF bill introductions from 2016. One reason ADF legislation is losing traction stems from the cost burdens they pose for state-run health plans, as Medicaid is one of the largest payers of opioid products.

Some lawmakers have shifted attention to new methods of preventing opioid abuse, such as limiting the supply of opioid prescriptions. Last February, New Jersey passed legislation (NJ SB 3) limiting initial opioids prescriptions for outpatients to five days. We identified roughly 30 opioid prescription limit bills in at least 16 states during the 2017 legislative session. Generally, these laws target first-time opioid patients and minors. Read More...

Marijuana Legalization Continues to Spread
Last April, Governor Jim Justice (D) signed legislation (WV SB 386) making West Virginia the 29th state to legalize medical marijuana for certain conditions. This follows lawmakers in Ohio and Pennsylvania passing medical marijuana laws in 2016, while voters in Florida, Arkansas, and North Dakota approved ballot measures to legalize medical marijuana. Additionally, ballot measures that year legalized recreational marijuana in California, Nevada, Maine, and Massachusetts, making it a total of eight states that now allow recreational marijuana use. The Vermont Legislature voted to legalize recreational marijuana in 2017, but Governor Phil Scott (R) vetoed the bill, though he later indicated that he would consider similar legislation in future legislative sessions. Read More...

What to Expect in 2018
Federal actions will continue to drive health care policy in the states in 2018. Congress failed to fully repeal the ACA last year, but as we've outlined, the federal Centers for Medicare and Medicaid Services (CMS) has a great deal on control over expanding Medicaid waivers, which could transform state-federal programs. CMS Administrator Seema Verma has already indicated that work requirements will be on the table. States are also likely to respond to Congress repealing the ACA's individual mandate, especially blue states.

In 2018, state lawmakers will continue their search for solutions to the opioid crisis and prescription drug pricing, as well as take a renewed look at single-payer health care. One idea that caught the attention of health policy wonks and could gain support is allowing state residents to buy into the Medicaid program. The proposal passed the Nevada Legislature in 2017, but Governor Brian Sandoval vetoed the bill (NV AB 374).

Vermont will try again to become the first state to legalize recreational marijuana through the legislative process. But after marijuana legalization proponents' success with ballot measures in 2016, election year 2018 will be another popular time for marijuana on state ballots. There are already 25 potential marijuana-related ballot measures aiming for the 2018 ballot. A medical marijuana legalization initiative (State Question 788) in Oklahoma is the only measure that has been certified so far, but expect more to follow as November approaches. Oklahoma Governor Mary Fallin (R) made the unusual move to place Question 788 on the June 26 primary ballot instead of the general election ballot in November, where turnout is traditionally much higher.

Adding a new wrinkle into the marijuana legalization debate is Attorney General Jeff Sessions' decision this month to reverse an Obama-era memo, which had previously directed federal law enforcement official to not prioritize non-violent marijuana prosecutions, which remain illegal under federal law.

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