Governor Herbert Testifies About Healthcare Before United States Senate Committee
On September 7, Governor Gary R. Herbert testified before the United States Senate Committee on Health, Education, Labor and Pensions about stabilizing the individual health insurance market. He spoke on a panel of five governors, including Governors Bill Haslam of Tenessee, Steve Bullock of Montana, Charlie Baker of Massachusetts, and John Hickenlooper of Colorado.
You can read his full testimony here:
Thank you Chairman Alexander and Ranking Member Murray; and members of the committee, thanks for this opportunity to share my perspective on how to stabilize our individual health insurance markets.
The markets for individual health insurance protect, among others, the families of Utah’s entrepreneurial self-employed. It would be irresponsible to allow these markets to collapse simply because of political paralysis and inaction.
Having served as chairman of both the National Governors’ Association and the Western Governors’ Association, and soon to be the next president of the Council of State Governments, I have a broad appreciation for the role that states have in our federal system.
I would therefore urge Congress to get past this healthcare impasse and delegate the responsibility to find solutions to the laboratories of democracy — our fifty states.
I would recommend allowing each state to take on the full role of regulating our health insurance markets. You can diversify the social, economic and political risk associated with this policy change by letting the states experiment as these laboratories of democracy to determine what policy works and what policy doesn’t.
For your information, the state of Utah has one of the lowest health care costs in the nation. That certainly stems from our local culture and our favorable demographics.
But it also comes from such practices as: Evidence-based measures of effectiveness; Eliminating duplication of services; Innovative use of managed care organizations; and Empowering doctors and patients alike to make more informed choices.
I believe if you will empower the states to determine their own healthcare destiny, the states will innovate and create practical solutions to the most complex healthcare issues of the day. We will learn from each other and therefore improve.
Under current law, empowering states means greater flexibility in defining Essential Health Benefits and simplifying the State Innovation Waiver process.
But true state self-determination goes well beyond coming to the U.S. Department of Health and Human Services with hat in hand, on bended knee, with hope for favorable treatment.
True self-determination would mean a block grant of Medicaid and Affordable Care Act funds, with a formula that gets us to funding parity among the 50 states.
But before achieving that vision of a vibrant state-based approach, Congress needs to provide immediate certainty to the individual insurance market.
To that end, I recommend establishing a clearly defined transition period.
This would allow markets to incentivize the broadest, continuous participation in the individual insurance market.
This should be done while anticipating the adjustments in a market based on greater state-level autonomy.
I personally am not a fan of cost-sharing reduction (CSR) payments. Nevertheless, in the near term, individual insurance markets need predictability in order to price their products adequately.
The sudden demise of CSRs would destabilize Utah’s individual insurance market, putting at risk some 110,000 Utahns who benefit from this program. A transition should include funding for CSRs through at least 2018.
We should also look to market-oriented incentives to maintain and increase continuous participation in individual health insurance markets.
For example, Congress could immediately reduce the cost of premiums by eliminating the Health Insurance Tax.
Insurance products could be better tailored to demand by allowing insurers to underwrite a wider array of cost-effective products, including more affordable high-deductible plans.
Participation could be incentivized thru greater flexibility in health savings accounts.
The federal government should fund a temporary reinsurance program for high risk pools with an option for states to operate their own risk stabilization programs.
At the bottom of all this, health insurance needs to be able to do its job of pooling risk and protecting against unforeseen health care costs instead of being used as a vehicle for social justice reform.
But to get there, the excessive burden of regulatory restrictions that we have placed on insurance policies needs to be peeled back, and that needs to be done with predictability and transparency.
Frankly, most of America’s consumers don’t care whether or not a law is repealed and replaced, or modified and improved. What Utahns want is to know that if they are prudent in their planning and budgeting, that they will be able to purchase reliable health insurance to protect them against life’s unexpected health challenges.
And they need to know that if they experience a medical catastrophe, that there is a safety net that will keep them from spiraling into a financial catastrophe.
The states are better able to address these issues for their unique populations and demographics than the federal government which is too often trapped in a one-size-fits-all mentality.
So, I urge you to consider a healthcare future that gives back to the states the lion’s share of responsibility. It is something that both sides of the aisle can support — giving more authority to governors and statehouses. Returning control to the states is both prudent policy and prudent politics.