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States take up their own healthcare reform

By Staff writer of The Christian Science Monitor / June 10, 2004



Like a train pulling out of the station, the nation's healthcare system is leaving behind an increasing number of Americans who can't afford it.

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That is why - despite more immediate worries over Iraq and the economy - both presidential candidates are talking about fixing health insurance. President Bush wants to lower costs by offering tax incentives for families. John Kerry, his presumed Democratic challenger, would increase health coverage for children and low-income Americans and make available a group health plan similar to the one the president and members of Congress have.

But in an election year, neither candidate is talking radical reform or pushing to put the system on a whole new track. So the momentum on reform has switched to the states. Their solutions could prove significant, observers say. They could help swing the national debate by showing what can be done - programmatically and politically.

Already in the works, for instance:

Maine's new Dirigo Health Plan. The plan groups individuals and employees of small businesses into an affordable health-insurance pool while the state subsidizes the poorest people. It is supposed to start in July, but it's unclear if any private insurers will meet Friday's deadline to bid to run the program.

California's healthcare mandate for business. Last year, the state passed a law requiring that by 2007 businesses with 50 or more workers provide health benefits to their employees, but a November ballot initiative is seeking to overturn it.

Massachusetts' universal healthcare proposal. The legislature is taking up a constitutional amendment that would guarantee universal healthcare, though it does not stipulate how it must be achieved. If approved this week, the proposed amendment would face a second vote next year in the legislature and approval by voters in a referendum before it could be enacted.

The amendment is a way to force the legislature and the healthcare industry to find "some kind of consensus, but it also leaves the flexibility over time to adapt the system to changes," says Barbara Roop, cochair of the Committee for Healthcare for Massachusetts and author of the wording of the amendment. "The 600,000 [uninsured] in Massachusetts, and the hundreds of thousands more who are threatened by losing their insurance ... can't wait for a federal solution."

But any ideal solution involves changes at the federal level, say those who study healthcare issues. Even though states regulate insurance companies that do business within their borders, federal mandates can supersede state laws. That makes it complex for states to act alone to reform health insurance, says Ed Haislmaier of the Center for Health Policy Studies at the Heritage Foundation.

But federal reform isn't likely to happen soon. "2004 is a political, not a policy year," says Ron Pollack, executive director of Families USA, a nonprofit advocacy group for affordable healthcare, in Washington. "Virtually nothing of significance is likely to pass Congress, and yet there will be an enormous amount of rhetoric."

The problem, says Robert Moffit, director of the Center for Health Policy Studies at the Heritage Foundation, is that politicians "attempt to reduce the complexity of the healthcare problem to a bumper sticker: 'Free care for all.' 'Cheap drugs for seniors.' Whatever you want to call it. The truth is this is the most sophisticated and technically complex sector of the American economy."

So far, both presidential candidates have magnified smaller initiatives, such as Mr. Bush talking about limiting punitive damages in medical malpractice cases or Senator Kerry backing cheaper prescription-drug imports from Canada.

Buying Canadian drugs is not a big part of the answer to the crisis, "but it's easy to understand and doesn't involve the government taking over something," says Dr. Robert Blendon, a professor of health policy and management at Harvard University.

Bush had hoped to point to his Medicare drug reforms as a big first-term achievement, but public opinion has soured toward it. Cost estimates for the Medicare drug benefit over the next decade have risen from about $400 billion to $540 billion.

"What was supposed to be a massive political plus is turning out to be a dangerous political minus.... And the reason is that nobody knows how to pay for this," says Mr. Moffit of the conservative Heritage Foundation.

Of course, the issue won't go away, analysts say, because 43.6 million Americans, about 15 percent of the population, lack access to health insurance.

By one estimate, a federal program mandating health insurance for all could save at least $200 billion annually by eliminating bureaucratic inefficiencies in the patchwork private system. That savings, according to an article in the Aug. 13, 2003, edition of the Journal of the American Medical Association, would be "more than enough to cover all of the uninsured," said the authors, four prominent physicians.

But few see any political momentum for such a plan. "It has to do with cultural things going on in this country where people do not want to increase the ... size of government," Dr. Blendon says.

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