States and Federal
Health Care Reform
Skidmore College
Dr. Robert Turner
State and Local Politics
Presented by Courtney Burke
September 23, 2010
Overview of States and Health Care
Examples of How Governments
Influence Health Policy and Law
 Advertising and marketing of health services &
products
 Expending funds on public programs, including public
health insurance
 Regulating anti-trust, health care contracting, privacy
 Overseeing employment, workforce, patents, taxation,
disparities, consumer protection, bioterrorism, etc.
 Overseeing health insurance regulation, Rx
regulation, human subjects research
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Government’s Balancing Act
 Balance between public regulation for public
health’s sake and the rights of private
individuals
 Examples – regulating companies’ advertising
of cigarettes; gun manufacturers’ liability for
injury; requiring the use of seatbelts; taxing
unhealthy foods
 What is federal vs. state jurisdiction?
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Law and Policy Powers of Government
 Powers of public health agencies that directly
protect and promote health
 Power to police (states retain this right, too)
 The right to tax and spend (this can coerce
certain health behaviors)
 Provide for the public’s welfare (public health
insurance)
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Who Makes Policy? States
 Governors and legislatures – pass laws;
allocate money; provide oversight
 State agencies – license and accredit; ensure
public health; oversee health insurance
 Courts – decide on scope of law;
enforcement; balance between government
and individual rights; punitive role
 The scope and role is different in every state
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States and Medicaid
States’ Role in Medicaid
 Setting eligibility, benefits
 Overseeing payments, program integrity
 Enrollment and coordination
 Financing
 Overall administration
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Interesting Things about States, the
Federal Government, and Medicaid
 Federal government sets minimum rules, provides for
at least half of total costs
 Medicaid (MA) is the largest grant-in-aid to states
(much larger than education, transportation, or other
funds)
 To alleviate state budget gaps, the federal
government has often used Medicaid as a vehicle for
helping states balance their budgets
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Interesting Things about States and Medicaid
 Very different across states
 States have maximized flexibility
 Medicaid is the largest funding source for longterm care (e.g., nursing home care, home care,
hospice, durable medical equipment, services for
persons with disabilities, etc.)
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Medicaid: NY and US Comparison
Source: Kaiser Commission on Medicaid and the Uninsured
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States and Medicaid Waivers
 Waivers are a statutory means for flexibility
 Waivers have allowed cuts in services, but
primarily focused on expansion and
innovation
 Research & demonstration or programmatic
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States and Health Care Reform
State Role in Health Reform: Financing
 Three main sources of costs for states:
 Increased minimum levels for Medicaid eligibility –
state share
 “Woodwork” effect for those currently eligible but
not enrolled in public insurance
 Administrative costs
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Financing (Example of New York)
 Woodwork – Enhanced state match may not apply to
those already eligible for public insurance but not
currently enrolled (close to 1 million people in NY)
 Administrative – Enrolling thousands more people,
creating new administrative entities, etc.; NY Bridge
Plan, exchange
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State Role in Health Reform: Administration
 Create and oversee state insurance exchanges
 Regulate products and rules within exchanges
 Regulate small group & individual markets
 Provide wraparound services or additional subsidies
 Coordinate exchange with public insurance programs
 Enforce individual or employer mandates
 Potentially administer public option or develop co-ops
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Administration Examples in New York
 Exchange – upstate/downstate, statewide, interstate?
 Change rating rules or keep pure community rating?
 Who is eligible for exchange?
 Wrap services for those above federal eligibility levels
or require them to use exchange with subsidies?
 Provide additional subsidies to low-income because
cost of insurance is higher?
 Expand Family Health Plus buy-in or develop co-ops?
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State Role in Health Reform: Implementation
 Update legislation, programs, and processes
 Request waivers from federal rules if needed
 Inform residents about options, provide outreach
 Create technology to link old and new programs
 Ensure services and programs mesh
 Create new forms and eligibility processes
 Assist citizens through the process
 Expand capacity to deal with new enrollees
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Other Potential Roles for States
 What about illegal immigrants? Underinsured?
 Interim operator of high-risk pools in some states
 Creators/operators of co-op or public option
 What exactly might the public option be? A Medicaid
or Family Health Plus buy-in? A Medicare buy-in?
FEHBP buy-in? A new plan? A stop-gap?
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State and Local Governments
 All states (except VT) must have balanced budgets
(some annual, some semi-annual)
 About half of states have tax and expenditure
limitations requiring supermajority or voter approval to
increase taxes
 Supplement federal programs; fill gaps; implement
programs
 Administer and help fund Medicaid and SCHIP
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Example of State Role in Health Reform
 Implement and monitor compliance with new insurance
regulations; oversee insurance products, rating rules
 Provide outreach and assistance to residents about new
laws and regulations
 Set up and administer state-based insurance exchanges
 Provide subsidies to businesses or individuals
 Coordinate new programs with existing programs
 Help finance costs of increased enrollment
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Class Role Play: States and Health Reform
 Governor
 Community health center
 State Medicaid director
 State Insurance commissioner
 Small business
 Medicaid enrollee
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Class Role Play: Health Reform
 Explain your role in the policy process
 What are your priorities/interests?
 Where/how will you intervene in the process?
 What will you say to your congressperson?
 How will your point of view affect the process?
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Favorite State Health Policy Resources

Kaiser State Health Facts online
 www.statehealthfacts.kff.org

National Academy for State Health Policy
 www.nashp.org

Commonwealth Fund
 www.cmwf.org

Robert Wood Johnson Foundation
 www.rwjf.org

State Coverage Initiatives
 www.statecoverage.org
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Rockefeller Institute
The Public Policy
Institute of the
State University of
New York
Courtney Burke
Director, Health Policy Research Center
411 State Street
Albany, NY 12203-1003
(518) 443-5522
burkec@rockinst.org
www.rockinst.org