CLINTON’S HEALTH PLAN : The States: How They’re Tackling Reform

Not content to wait for President Clinton’s plans to revamp the nation’s health care system, many governors and state legislatures are moving to improve coverage on their own.

Health insurance for everyone has been a major White House goal. Yet Hawaii has been moving toward it since 1974, Vermont is aiming to achieve it by July, 1995, and Washington state wants it done by 1998. Oregon has started the process by expanding insurance coverage to many more of its indigent residents.

To help employees of small businesses obtain better insurance at more affordable rates, many states--including California and Washington--have moved to organize “purchasing cooperatives” that enable firms to join together to obtain coverage.

“State officials really don’t have the luxury of sitting on their hands waiting for the White House and Congress to do something,” says Richard E. Merritt, a state health reform authority at George Washington University. “The number of uninsured people is increasing, Medicaid costs are escalating and businesses in their states are concerned about the costs of health care.”

It is not yet clear how the Clinton proposal would affect the state initiatives, but here is a more detailed look at what the states are doing.

States That Have Enacted Changes

California: Effective July 1, the state established a program to help small businesses provide health coverage for their employees. The insurance pool--available to firms employing between five and 50 people--aims to make it easier for companies to purchase health coverage by allowing them to bargain with carriers as a unit. The Department of Health Services also is pushing a plan to contain costs by expanding enrollment of Medi-Cal patients in managed care programs.

Florida: The state Legislature has created a system of universal coverage that by Dec. 31, 1994, is intended to allow government, individuals and businesses to pool their resources to purchase better quality care at affordable prices. The legislation effects major changes in the small employer insurance market, specifically requiring insurers to issue policies to small businesses without regard to employees’ health status, pre-existing conditions or history of claims.

Hawaii: Beginning in 1974 with the passage of landmark health care reform legislation, Hawaii has moved toward providing universal coverage for its population, although about 5% of the islands’ residents remain uninsured. The state aims to stabilize costs and improve efficiency through a program of managed care. Hawaii’s law mandates employer-based health insurance for all employees not covered by collective bargaining or government employees with their own plans. Financing is shared equally by employees and employers. The state subsidizes insurance coverage for workers who are unable to pay.

Iowa: The state will allow experimentation, on a limited basis, with managed competition by establishing health insurance purchasing cooperatives and creating delivery systems. State officials say they hope to find out what works best in achieving the twin goals of cost containment and access to quality care.

Maryland: The small employer insurance market--defined as companies with two to 50 employees--is the target of Maryland reforms. Subscribers in the small-employer market must be notified in writing when a policy is canceled or not renewed, and pre-existing condition exclusions will be totally eliminated effective Jan. 1, 1995.

Oklahoma: Legislators have approved a plan to abandon the existing Medicaid fee-for-service system in favor of a mandatory statewide managed care program for indigent residents. Under the measure, Medicaid clients are to be folded into the managed care system on a four-year, phased-in basis.

Oregon: As far back as 1989, Oregon adopted a reform initiative to expand Medicaid coverage to all state residents with incomes up to 100% of the federal poverty level. Under a play-or-pay component of the plan, employers will be required to provide group insurance to their workers by July 1995 or pay into a state insurance pool. At tax on tobacco products is under consideration to provide supplemental financing.

Rhode Island: As a first step toward comprehensive, universal health coverage, the state legislature has approved a plan to provide coverage for all uninsured children under 6 years old and all pregnant women effective next April 1. In an effort to keep down costs, the program will be of the “managed care” variety with each enrollee to be assigned a primary care physician.

Texas: Gov. Ann Richards signed legislation this summer to make health insurance more affordable and more accessible to small businesses--firms having between three and 50 employees. The legislation created a statewide nonprofit purchasing cooperative to allow small companies to join together to buy health insurance at more affordable rates. The act also allows for creation of private nonprofit purchasing alliances.

Vermont: The state has enacted an initiative aimed at achieving universal access to health care coverage for its residents by July, 1995. To help reach that goal, the Vermont Health Care Authority, created by the initiative, is pushing for establishment of networks that would be responsible for providing services under a basic benefit plan to be designed by the state.

Washington: The state legislature has enacted a health reform initiative requiring all residents to have access to a uniform benefit package by 1998, mostly through an employer mandate. To accommodate small companies, the bill provides for employers to adopt a basic benefit package on a phased-in schedule. Unemployed who are not eligible for Medicaid are to be covered by a special state-funded indigent care program.

States That Are Considering Changes

Minnesota: A newly created health care commission has submitted to the legislature a cost-containment plan for slowing the rate of growth in health-care spending by 10% a year for the next five years. Key to this goal is the development of networks that will be responsible for providing health services to purchasers at a fixed price, including primary and preventive care.

Montana: The state has begun laying the groundwork for a system of universal health-care coverage, with a law that creates a five-member health care authority that will study different statewide access plans and cost containment measures.

New York: Gov. Mario Cuomo last April introduced legislation to make substantial changes in how health care is financed and delivered in the state. A major intent of the proposal is to redirect health care dollars away from costly in-patient hospital care toward more cost-effective primary and preventive care delivered in non-institutional, community-based settings.

Pennsylvania: Gov. Robert P. Casey unveiled a plan last May aimed at providing insurance coverage to those who lack it and giving greater security to those who have coverage. Central to the plan is development of a guaranteed benefits package. The state would like all Medicaid recipients to enroll in health maintenance organizations, but the U.S. Department of Health and Human Services has turned down the state’s initial application on grounds that “it would unduly limit the freedom of the needy to choose health providers.”

South Carolina: Gov. Carroll Campbell has said he plans to apply early next year for a federal waiver to operate Medicaid as a managed care insurance plan.

Tennessee: Tennessee has proposed replacing Medicaid with a program that would provide health care coverage to both Medicaid-eligible recipients and others who are uninsured. The program would pool certain public health care resources into a single fund to finance health care for these recipients.

Utah: The state legislature has created a 16-member commission charged with drawing up “at least two distinct options” for controlling health costs and assuring universal access to health coverage.

West Virginia: Proposed legislation would establish several major reform goals for the state, including health insurance coverage for all residents, a plan for containing health care costs and a system of community-based care.

Wisconsin: The state is considering a reform initiative would divide the state into geographic regions to be represented by local health councils. The regional organizations would consist of both purchasers and providers of health care and would furnish a forum for purchasers and providers to enter into long-term partnerships and establish payment procedures.