Until Bill Clinton’s ascent to the White House, the battle for American health-care reform was waged without a headquarters, largely in the scattered trenches of state government.
Spurred on by rising Medicaid costs and decades of inaction at the federal level, states began tackling the issue in the late 1980s by proposing a variety of reform plans to expand access and cut ballooning costs.
Now, with Clinton’s transition team setting the stage for a national plan, some fear these pioneering efforts may lose their impetus or be pre-empted by a one-size-fits-all plan that may not fill their needs.
“You have some states concerned that what they are going to get from the federal government will be the least common denominator, less than what they want to put in place themselves,” said Kala Ladenheim, a senior research associate at the Intergovernmental Health Policy Project at George Washington University.
At the same time, some state legislatures, such as Ohio did two weeks ago, have questioned the need to proceed with their own plans since a national plan now appears to be forthcoming.
“We were down to the final wire on the most time-consuming, complicated bill in 27 years and then came the debate: `Should we pass it because of Clinton’s plan?’ ” said state Sen. Robert Nye.
The plan, which passed, is not a universal-access plan, but it does assure coverage for all Ohio children, places controls on insurers rates and overhead and restricts doctors from billing for unnecessary services or making referrals to facilities in which they have a financial interest.
On the other hand, some states-Florida, Washington, Oregon, Vermont, Oklahoma, Colorado and Kentucky-are forging ahead with their own plans partly out of concern that Clinton’s efforts may meet the same lobbyist opposition and congressional gridlock as past proposed federal health-care reforms.
“It’s going to be hard even for the president of a Democratic-controlled Congress to push through a comprehensive health-care program in his first session,” said Roger Auerbach, health policy adviser for Oregon Gov. Barbara Roberts.
Florida Gov. Lawton Chiles, a Democrat, argued that his state could not wait because its health-care costs, which he estimated at $86 million a day, were cutting business profits and eating into the state’s education, environmental and safety budgets.
Florida’s plan would assure the state’s 13.5 million residents of full access to health care by 1994. It would be the first to attempt a statewide system of so-called managed competition by establishing a network of health insurance purchasing cooperatives (HIPUCS) and promoting large HMO-style provider networks. Both are key elements of the Clinton plan.
Some rural states such as Iowa, however, are concerned that managed competition will not work for them because there are not enough rural doctors and hospitals for viable competition.
Still, an early start on such a system could give Florida a voice in the national health-care debate, which some expect will last at least two years before producing a federal plan.
“We’re hoping that if we got our plan out early enough, if enough people got a chance to look at it, it would help inform the national plan while dealing with some pretty severe problems in Florida,” said Douglas Cook, director of Florida’s Agency for Health Care Administration.
While many states see their plans as compatible with Clinton’s, some are quietly looking for assurances that his plan will be flexible enough to accommodate theirs.
“They want it to be a floor, not a ceiling,” Ladenheim said. Several states-Vermont, Colorado, New York and New Mexico-want the latitude to experiment with single-payer Canadian style plans, if their legislatures so decide.
“My fear is that at the end of the bargaining process on the Clinton bill, late one night Congress will put in a clause prohibiting states from pursuing alternatives,” said Richard Gottlieb, a New York state legislator whose single-payer bill passed the Assembly in Albany last year. “That would be something the insurance industry would look for as a final ounce of flesh to squeeze out of Congress.”
Mixed signals are being sent out by the Clinton transistion team about further state experimentation. When state health-care planners met in October with team member Kenneth Thorpe, they reportedly were encouraged to proceed. Some of those present say they were told that whatever the administration comes up with, it will allow for substantial state flexibility.
But when Chiles met with top Clinton health-care policy formulater Judy Feder last month to discuss federal Medicaid waivers needed for Florida’s plan to proceed, he reportedly was told that Clinton was not eager to have states go off on their own and divert attention from the national plan.
“I think there is some reluctance on the part of the new administration on granting state waivers because they feel that may take the pressure off Congress to act,” said Joy Wilson, director of the health committee for the National Association of State Legislatures.
A key piece of federal legislation that would remove roadblocks to state experimentation and provide one-stop shopping for federal waivers from Medicaid and ERISA (Employee Retirement Income Security Act) regulations died in the last congressional session. Plans for its resurrection are uncertain.
“We’re going to let Clinton start out and see what he does with health care, and then maybe we’ll ease into this again,” said a legislative aide to Sen. Patrick Leahy (D-Vt.), who introduced the measure last session. In the meantime, the National Governors Association hopes to introduce a similar bill to facilitate the granting of waivers.
Some state health-care planners hope that Clinton’s proposal will include an “opt out” provision, which will allow them to pursue their own plans.
“Opt out wouldn’t mean a wholesale opt out, but within certain parameters,” said Anya Rader, who works with Vermont Gov. Howard Dean, co-chair of the governors association’s task force on health-care reform.
So if, for example, Vermont wanted to shift doctors from fees-for-service to salaries or if Oklahoma wanted to form a single statewide pool and create IRA-like family health accounts, these states could do so.
Most of Clinton’s still fluid proposal won endorsement at the National Governors Association meeting in December. It would promote managed competition and managed care, establish a national health-care board to tackle costs and set a minimum standard health insurance package.
States are more in agreement on the need for a uniform national framework and standards for a minimum benefits package and insurance reform.
“If the nation chooses not to undertake aggressive insurance reform, then community rating (spreading risk throughout an area, rather than assessing risk within each group or business) may not be the norm and small businesses may have trouble paying their premiums,” said Jack Lewin, Hawaii’s health director and a Clinton adviser.
Lewin, who oversees the nation’s only fully reformed health-care system, is concerned about what seems to be the Clinton team’s focus on managed competition, and to a lesser extent, global budgeting. He says the new administration would be better served by first concentrating on insurance reform, quality assurance standards, tax restructuring, setting a national benefit package and making insurance mandatory for all.
States also are hoping for federal solutions to some of the bigger problems, such as addressing the needs of underserved rural and urban areas, tackling long-term care for America’s swelling population of elderly people and setting broad national cost-containment standards.
Some state health officials have reservations about setting national price controls, or global budgets, for health care. The concern is that a federal global budget would only control federal expenditures, which could result in price increases elsewhere in a state’s health-care system.
“You talk about increasing access, and everybody nods their heads,” said Auerbach of Oregon, which pioneered a move toward rationing of health care as a way to expand access for low-income people. “You talk about cost control and everybody points their finger at each other and says, `Why do we have to do more?’ “
