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State Coverage Expansions Could Lay The Groundwork For National Action, Say Researchers

In Progress Report On State Reforms, Researchers Say
Expanding Children’s Coverage Is The Most Common Form Of State Access Improvement

Bethesda, MD -- The enactment of ambitious health access reforms in Massachusetts and Vermont has ushered in a new wave of state coverage expansions, according to a Health Affairs Web Exclusive study published today. The study identifies 39 states that have passed laws expanding access in at least one area since Massachusetts and Vermont enacted their reforms in 2006. http://content.healthaffairs.org/cgi/content/abstract/hlthaff.27.2.w105

“The last time numerous states simultaneously engaged in coverage expansions was between 1988 and 1993. That period provided ideas and political will, which helped motivate the Clinton administration’s reform initiative. Judging by the interest of the current presidential candidates in national health reform, this new wave of state activity could have a similar impact,” said lead author John McDonough, executive director of Health Care for All, a Massachusetts consumer health advocacy organization.

The current wave of state reforms contain new ideas that could seed national legislation, write McDonough and his coauthors, Michael Miller and Christine Barber of Community Catalyst, a national nonprofit community advocacy organization. These ideas include new responsibilities for individuals and employers; new insurance exchanges such as the Massachusetts “Connector”; allowing all employers to buy into state coverage pools; merging the individual and small-group insurance markets; and combining coverage expansions with quality and cost initiatives.

McDonough, Miller, and Barber provide a comprehensive catalog of state coverage enactments in 2006 and 2007. The most common form of state coverage expansion during this time was adding coverage for children: 26 states expanded children’s coverage, principally through reforms involving the State Children’s Health Insurance Program (SCHIP). Eighteen states passed laws increasing the number of adults eligible for Medicaid and other public programs.

Fifteen states enacted insurance market reforms intended to improve access. In the most popular reform in this area, many states directed state-licensed insurers to allow children to remain on their parents’ insurance plans for longer, most commonly until age 25. Only three states -- Massachusetts, Vermont, and Rhode Island -- have enacted mandates on employers to provide insurance or on individuals to purchase it. However, if California’s recently announced agreement between the governor and legislators on comprehensive reform is enacted, the Golden State will join Massachusetts in having both employer and individual mandates.

As of the end of 2007, no state had joined Massachusetts and Vermont in passing comprehensive reforms, although California has taken significant steps towards that goal and parts of Pennsylvania Governor Ed Rendell’s comprehensive reform proposals have been enacted. All told, governors and key legislative leaders in at least 13 states other than Massachusetts and Vermont have proposed comprehensive reforms. The authors emphasize that, given the advantages enjoyed by Massachusetts and Vermont and the length of time it takes to develop and pass wide-ranging coverage expansions, “the lack of success to date for other states’ comprehensive reform efforts should not be surprising.”

States Have Seized A Window Of Fiscal Opportunity To Expand Access,
But Whether Financing Will Be Sustainable May Depend On The Federal Government

McDonough and coauthors attribute the recent wave of state coverage expansions to four factors: rising numbers of uninsured Americans, combined with a better understanding of the uninsurance problem; fiscal opportunity -- the 2006-07 coverage expansions occurred during positive economic times for state governments; recent changes in political leadership that brought more momentum to health reform efforts; and Massachusetts and Vermont demonstrating new policy options, together with other states wanting to be seen as health policy innovators.

The authors warn that the state enactments described in their study should not be taken as cause for complacency regarding the problem of the uninsured. To begin with, some state access expansions followed prior cutbacks, with the net outcome in states like Tennessee being fewer people insured overall.

Moreover, the future of state health reform is uncertain. “States remain very interested in expanding access, but the Bush administration has made it more difficult to expand SCHIP to relatively higher-income children, and the worsening economy is driving state budgets into the red. In this environment, the problem of how states will finance reforms in a long-term, sustainable way looms increasingly large. States can start the reform process going, but whether access expands or retreats in the end may depend on whether the federal government becomes a partner or an obstacle,” said McDonough.

You can read the article by McDonough, Miller, and Barber at
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.27.2.w105

ABOUT HEALTH AFFAIRS:

Health Affairs, published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears bimonthly in print with additional online-only papers published weekly as Health Affairs Web Exclusives at www.healthaffairs.org.

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©2008 Project HOPE–The People-to-People Health Foundation, Inc.