State Capacity for Innovation
States have shown that they can enact
new policies that provide models or
political momentum for federal action
STATE LESSONS IN
HEALTH CARE REFORM
• In a few states, significant efforts for
universal coverage
Tom Oliver
School of Medicine and Public Health
University of Wisconsin—Madison
• Small-group insurance market reforms
• Children’s health insurance
• Mental health parity
• Preferred drug lists
• Higher age for dependent coverage
Prepared for the AcademyHealth National Health Policy Conference,
Washington, D.C., 2 February 2009.
The Coming Flood for State Finances
Q
45 states facing deficits in FY 2009 or
FY 2010
Q
Total deficits at historic highs
• Currently $91 billion for FY 2009
• Est. $145 billion for FY 2010
• Est. $180 billion for FY 2011
Center on Budget and Policy Priorities, January 2009
Cumulative Changes in Health Insurance
Premiums, Overall Inflation, and Workers’
Earnings, 2000-2006
Health Insurance Premiums
Overall Inflation
The Coming Flood for State Finances
Q
Projected 5.8% growth in Medicaid
spending compared to 0.1% decline
in state general funds in FY 2009
Q
Projected Medicaid enrollment
growth 2.1% for FY 2008 and 3.5% for
FY 2009
National Governors’ Association and National Association
of State Budget Officers, December 2008
Limits of State-Based Approach to
Expanding Health Coverage
Q
Workers' Earnings
100%
point is very uneven and weakening
87%
80%
Employer-based coverage as a starting
73%
• Range 49.3% to 75.9% (average 62.9%)
59%
60%
Q
43%
40%
• Substantial burden for many states
25%
20%
11%
0%
0%
2000
4%
7%
Eligibility for public insurance
10%
3%
5%
7%
2001
2002
2003
12%
10%
2004
Note: Data on premium increases reflect the cost of health insurance
premiums for a family of four. SOURCE: Employer Health Benefits, 2006
Annual Survey, Kaiser Family Foundation and Health Research & Educational
Trust, September 2006.
15%
14%
2005
20%
• Childless adults rarely covered
18%
• Legal and illegal immigrants
2006
Q
Enrollment of eligible population
1
ACCESS: PARTICIPATION
Percent of Adults Ages 18–64 Uninsured by State
1999–2000
2005–2006
WA
VT
NH ME
WA
ND
MT
ID
VT
MI
WY
PA
IA
NE
OH
IN
NV
IL
UT
CO
CA
MA
NY
WI
SD
KS
WV VA
MO
KY
NJ
RI
CT
MN
OR
ID
NC
NM
OK
PA
IA
NE
MS
TX
AL
UT
CA
IL
CO
MO
KS
WV VA
KY
RI
CT
DE
MD
DC
NC
TN
AZ
GA
NM
OK
SC
AR
MS
LA
TX
AL
GA
LA
FL
AK
NJ
OH
IN
NV
SC
AR
MA
MI
WY
DE
MD
DC
NY
WI
SD
TN
AZ
NH ME
ND
MT
MN
OR
FL
AK
HI
23% or more
HI
19%–22.9%
14%–18.9%
Less than 14%
Data: Two-year averages 1999–2000, updated with 2007 Current Population Survey correction, and 2005–2006 from the
Census Bureau’s March 2000, 2001 and 2006, 2007 CPS.
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008
Distribution of the Uninsured Nonelderly
in the U.S. by State, Calendar Year 2007
California
Texas
Florida
New York
Illinois
Georgia
Ohio
6.5 million
5.9 million
3.6 million
2.5 million
1.8 million
1.6 million
1.3 million
14.4%
13.1%
8.0%
5.9%
3.7%
3.7%
2.9%
Rest of U.S.
22 million
49.3%
Follow the Yellow Brick Road . . .
Brain?
Q
Tools for coverage mostly available
• Key barrier is ERISA
• What is “affordable” coverage?
Q
Tools for cost containment are lacking
• Stronger approaches in prevention, primary care and
management of chronic disease
• Institutions and incentives for cost-effective treatment
Source: U.S. Census Bureau, Current Population Survey
• Universal adoption of living wills
Follow the Yellow Brick Road . . .
Heart?
Follow the Yellow Brick Road . . .
Courage?
Q
Economic hardship is widespread
Q
Very few states taking initiative
Q
Role of medical debt in personal financial
Q
Excessive reliance on cost-shifting to federal
troubles also widespread
Q
Treatment of childless adults, immigrants?
government
Q
Leaders not necessarily rewarded
Q
Interests find it hard to abandon past positions
Q
Still little capacity or cohesion in grass-roots
2