California Measure Highlights State Health Care Reform Activity

January 10, 2020

While there is a chance for federal legislation addressing the issue of surprise medical bills in 2020, state reforms will continue with California looking to enable private purchasers to benefit from state’s bulk pharmaceutical purchasing program and price negotiation initiatives.

States are implementing a wide variety of reforms, including public insurance options, cost controls, and non-traditional payment models for Medicaid.  In GOP-controlled states, there is an increased interest in promoting short-term insurance plans and expanding Medicaid to cover more low-income Americans.

Here is a glimpse at what some of these reforms look like:

  • California Gov. Newsom has signed a first-in-the-nation executive order that will create the nation’s biggest single-purchaser system for drugs and will allow private employers to benefit from the program’s negotiate prescription drug prices for the 25 highest-cost drugs.

  • Washington state has implemented, and Colorado is looking to implement, a public option plan.  This week, Colorado Governor Jared Polis urged lawmakers to support him in creating a state-administered public option at his State of the State address. Lawmakers in D.C. will certainly point to the impact of implementing a public option at the state level during their own debate over the future of health care.

  • North Carolina is implementing the Healthy Opportunities Pilots, which will use up to $650 million in Medicaid funding for non-medical interventions on social determinants of health, such as housing, food, and transportation.

  • Tennessee is reviewing a plan to convert Medicaid into a block grant with financial caps on federal spending, a popular proposal among conservatives.  In this case, the state would receive a fixed sum of money from the federal government and could spend the money as it chooses.

Going forward, it will be important to look towards these "laboratories for democracy" to see the effect of these proposals on health care costs.  If successful, expect to hear more about these reforms at the federal level.