Maryland: "Insurance Down Payment" bill morphs into "Easy Enrollment" bill...could be a big deal!

Since Congressional Republicans effectively repealed the ACA's individual mandate penalty at the federal level back in December 2017 (by reducing the penalty amount from $695 or 2.5% of income down to $0 or 0.0%), causing premiums on the individual market to shoot up an average of $580 per unsubsidized enrollee nationally, a half-dozen states or so have sprung into action.

Massachusetts, didn't really have to do much, since they never repealed their own state-level pre-ACA mandate penalty; they simply dusted it off and ramped up a statewide outreach/awareness campaign to make sure everyone knew it was still in place. Result: Record-breaking enrollment numbers and the lowest uninsured rate in the nation.

New Jersey and the District of Columbia, meanwhile, just passed bills which reinstated the exact same coverage mandate penalty that the ACA previously had. The effect in NJ & DC is murkier. New Jersey is on the federal exchange, and thus doesn't have their own marketing/outreach budget (the state's ad market is also crazy expensive since it overlaps with New York's), and as far as I can tell, neither NJ nor DC did much in the way of getting the word out to residents about the reimposed mandates.

The DC exchange barely even mentioned the penalty at all...even on their own website (until recently, there was no mention of it at all on the home page; you had to visit the FAQ section, then drill down several levels to see any reference to it). DC finally recognized the problem after the fact and has created a 60-day special enrollment period for people to #GetCovered who didn't know about the District-level mandate. For this and other reasons, it's gonna take some time to know for certain just how effective their mandates have been in shoring up enrollment.

Other states such as Vermont and California have their own mandate penalties in the works--Vermont did pass an "enforcement mechanism" bill last year set to go into effect for 2020...but the specifics are vague. California hasn't done so yet but reinstatement of the mandate is being pushed hard by Gov. Newsom and seems likely to go through later this year.

And then there's Maryland. In early 2018, Maryland state legislators introduced a bill which included a twist on the coverage mandate penalty--those who failed to sign up had another option: They could either pay the penalty or they could choose to have the penalty amount be used to automatically enroll them in the lowest-cost insurance policy available. If they qualified for ACA subsidies, those would even be baked into the equation as well. This was a clever way of softening the blow, while also increasing enrollment and helping out the ACA risk pool.

I supported this bill because the primary goal of a coverage requirement in the first place isn't to penalize people, it's to encourage (goad) them into getting covered. Anyway, the bill didn't go anywhere in the 2018 session, then was reintroduced for 2019 back in November.

That was the last I heard about the "Down Payment" bill until this week:

MD shows how it's done! Unanimous, bipartisan approval of a groundbreaking, innovative strategy for enrolling the uninsured into health coverage. It's not over till it's over, but so far so great! https://t.co/StoM1W9yLb

— Stan Dorn (@standorn) March 15, 2019

Stan Dorn is a Senior Fellow at Families USA, and apparently he's been hard at work on helping push through a revised version of the "Down Payment" bill, which seems to have a much better chance of making it through the process and becoming law:

Bill would use tax returns to identify and help Marylanders without health insurance
Pamela Wood

Maryland would use state tax forms to identify uninsured residents and refer them to options for no-cost or low-cost health care under a bill moving forward in the General Assembly.

The bill, if approved, would add a question on state tax returns asking taxpayers if they have health insurance. Those who answer that they don’t have health insurance would be referred to the state's Medicaid program or the health exchange, where individuals can buy health insurance plans.

The wording in the article makes it sound like a checkbox on a paper form which would just say "If you checked 'no', visit this website to enroll now" or whatever, which wouldn't be terribly effective. HOWEVER...

Proponents of the bill believe tens of thousands of people could gain no-cost or low-cost health insurance through the program, which is being called the “Maryland Easy Enrollment Health Program.”

“We are thrilled that Maryland will be the first state in the nation to actively use the tax system to enroll uninsured Marylanders in health care,” said Vincent DeMarco, president of the Maryland Citizens’ Health Initiative.

...Dorn explained to me that the way it would work is much more than that: The state tax returns would include a new line where uninsured filers would be required to check off one of two boxes:

  • Box 1: "Have the exchange determine my eligibility for free or low-cost insurance"
  • Box 2: "I prefer to remain uninsured."

When the tax form goes to the state treasury department, if they checked Box 1, their data is forwarded to the Maryland Health Benefit Exchange, which now has permission to check their status. If they qualify for Medicaid, they're auto-enrolled. If they qualify for a subsidized exchange plan, the exchange will then contact them and let them know what sort of plans they're eligible for.

I'm not sure what happens if they don't qualify for subsidies...presumably nothing, or perhaps the exchange just sends them a quick "sorry, full price only for you" notice.

The program is expected to identify about 50,000 people eligible for Medicaid, the government health insurance program for those with low incomes, according to the Maryland Citizens’ Health Initiative.

An additional 70,000 Marylanders could buy insurance at little to no cost through the state’s health exchange with the help of government subsidies, according to the organization.

Those projections are presumably high-end targets, but if they were to be achieved, it would potentially increase Maryland's ACA exchange enrollment by up to 45% and Medicaid expansion enrollment by 17% (from 291,000 in 2017). Assuming all 120,000 people were previously uninsured (which isn't likely...the odds are a chunk of each do have some type of coverage today), this would theoretically reduce Maryland's uninsured rate from 6.1% down to 4.1% (from 362,000 down to 242,000).

Health advocates say that those Marylanders might be unaware that they qualify for Medicaid or for help in paying for health insurance — and that the tax return is a way to identify those individuals.

The bill had started out as levying a penalty on Marylanders without insurance, but allowing them to use that money instead toward buying health insurance. That penalty was considered as the federal government is no longer enforcing a penalty provision that was created under the Affordable Care Act.

The revised version of the bill — removing the financial penalty — sailed through the House of Delegates Health and Government Operations Committee on a bipartisan 22-0 vote this week.

The bill is supposed to go to the full state House of Delegates today.

I still think it'd be more effective if the mandate penalty component hadn't been removed, but again, if something as simple as an auto-enroll checkbox (plus the corresponding technical work done at the back end, which presumably wouldn't be that simple) really does end up having that much of a positive impact, it'd still be a huge improvement (and obviously this bill has a far better chance of actually becoming law anyway).