Health-Care Re­form to Shift Fo­cus

The Washington Post - - National News - By Christo­pher Lee

The demise of Cal­i­for­nia’s at­tempt at com­pre­hen­sive health­care re­form this week means that ad­vo­cates of over­haul­ing the health-care sys­tem will turn their fo­cus back to Wash­ing­ton, sev­eral ex­perts said yes­ter­day, as an in­creas­ingly tough bud­get cli­mate raises new ques­tions about whether states can go it alone.

When the plan cham­pi­oned by Gov. Arnold Sch­warzeneg­ger (R) and state As­sem­bly Speaker Fabian Núñez (D) went down to de­feat in a leg­isla­tive com­mit­tee, so did hopes that suc­cess­ful re­form in such a pop­u­lous, in­flu­en­tial state would bol­ster ef­forts else­where to cover more of the na­tion’s 47 mil­lion unin­sured.

While Cal­i­for­nia is unique in some re­spects — it has a di­verse elec­torate, a high num­ber of unin­sured and a his­tory of oc­ca­sional bud­get crises — ex­perts said some of the same eco­nomic forces at work there threaten to slow or swamp sim­i­lar pro­pos­als in other states. The slump­ing econ­omy di­min­ishes states’ tax rev­enue at the same time that spend­ing de­mands in­crease as more peo­ple seek help from pro­grams such as Med­i­caid, which serves the poor. And, un­like the fed­eral gov­ern­ment, state gov­ern­ments have to bal­ance their bud­gets ev­ery year.

“The fail­ure of Cal­i­for­nia’s plan pushes the fo­cus about ex­pand­ing cov­er­age even more strongly to­wards Wash­ing­ton,” said Paul B. Ginsburg of the Cen­ter for Study­ing Health Sys­tem Change, a non­par­ti­san pol­icy-re­search group. “I’ve never be­lieved that states would be able to go very far on their own be­cause of their fis­cal lim­i­ta­tions. A state in an av­er­age year could be able to af­ford some­thing, but once they get into a re­ces­sion, they get into fis­cal trou­ble.”

Karen Davis of the Com­mon­wealth Fund, a non­profit re­search in­sti­tu­tion, said fed­eral lead­er­ship is cru­cial be­cause Cal­i­for­nia and some other states’ plans de­pend, in part, on ex­pand­ing Med­i­caid and other pub­lic pro­grams to cover unin­sured chil­dren who cur­rently do not qual­ify. But the Bush ad­min­is­tra­tion has been un­will­ing to sign off on most such ex­pan­sions. “The lack of fed­eral sup­port for state in­no­va­tions has proved to be a ma­jor hur­dle to re­form,” Davis said.

Cal­i­for­nia’s pro­posal, bor­row­ing el­e­ments from a sim­i­lar plan that passed in Mas­sachusetts in 2006, would have re­quired most res­i­dents to ob­tain private health in­sur­ance and would have called for new charges on busi­nesses, hos­pi­tals and cig­a­rettes to help fund it.

It drew op­po­si­tion from Repub­li­cans who saw it as too oner­ous on busi­ness and from Democrats, in­clud­ing ad­vo­cates of a sin­gle-payer sys­tem, who said it would im­pose a fi­nan­cial bur­den on work­ing peo­ple and yet bring too lit­tle ben­e­fit. But the crown­ing blow came from the gap­ing $14 bil­lion hole in Cal­i­for­nia’s bud­get, which made many sup­port­ers and op­po­nents doubt­ful that the state could af­ford the pro­gram’s $14 bil­lion cost.

Sch­warzeneg­ger and Núñez have vowed not to give up. About 6.6 mil­lion Cal­i­for­ni­ans lack health in­sur­ance, more than 20 per­cent of the state’s pop­u­la­tion.

So far, Mas­sachusetts — which be­gan with an es­ti­mated 400,000 to 600,000 unin­sured peo­ple, less than 10 per­cent of its pop­u­la­tion — is the fur­thest along among states try­ing to ex­pand cov­er­age.

Since July, Mas­sachusetts has re­quired al­most all res­i­dents to ob- tain health in­sur­ance or face a penalty of as much as $912, ex­empt­ing only those deemed un­able to af­ford cov­er­age. More than 300,000 peo­ple had signed up for cov­er­age as of Jan. 1, ac­cord­ing to the Com­mon­wealth Health In­sur­ance Con­nec­tor Author­ity, the new state en­tity im­ple­ment­ing the law. But the pro­gram’s long-term cost re­mains a con­cern, with state bud­get ex­perts pro­ject­ing a short­fall of as much as $147 mil­lion this fis­cal year.

“We’ve been ex­tremely suc­cess­ful in en­rolling peo­ple in health plans, but there is still an aw­ful lot of work to do,” said Dick Pow­ers, a spokesman for the author­ity.

De­spite the sag­ging econ­omy and the col­lapse of the Cal­i­for­nia ef­fort, other states are still try­ing. In re­cent years, Ver­mont and Maine ap­proved leg­is­la­tion in­tended to ex­pand cov­er­age to the unin­sured, and Illi­nois and Wis­con­sin made it a pri­or­ity to cover more chil­dren. Late last year, Mary­land ex­panded Med­i­caid cov­er­age for sin­gle adults and ap­proved new sub­si­dies for small busi­nesses. Other states that are de­vel­op­ing plans and may con­sider them in leg­is­la­tion this year in­clude Colorado, Iowa, Mis­souri, New Mex­ico and Wash­ing­ton, ac­cord­ing to the Na­tional Con­fer­ence of State Leg­is­la­tures (NCSL).

“They are likely to take a look at what hap­pened in Cal­i­for­nia and tweak some­thing that they may al­ready have in the works, but I wouldn’t see those states as chang­ing a ba­sic di­rec­tion or aban­don­ing what mo­men­tum they al­ready have,” said Richard Cauchi, health pro­gram di­rec­tor at the NCSL. “States, to be hon­est, look in­ward pri­mar­ily. They are not nec­es­sar­ily try­ing to be the na­tional trend­set­ter. They are look­ing to cre­ate a law that will work within their own bound­aries.”

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