Heath Care Debate Returns to States

The pendulum of health care reform has swung back towards state governments.  In the February 2, 2010, issue of the Wall Street Journal, Anna Wilde Mathews notes in her article “States Restart Health Care Push” (may require subscription) that the uncertainty of federal health care legislation has pushed reform back to the states.  Mathews correctly reports that, prior to the Obama administration, health care reform efforts were pursued primarily at the state level.  Massachusetts stands as the prime example of state reform.  California was expected to follow suit, but a poor economy and a wait and see approach due to the possibility of federal reform froze the progress of many state reform efforts under consideration.

While the absence of federal legislation may now inspire states to reconsider these proposals, budget necessities are forcing state legislatures to deal with health care issues in a more focused way than Congressional efforts.  Federal legislation included efforts to expand coverage as well as provisions aimed at “bending the cost-curve.”  Expanding coverage at the state level, either through state Medicaid and Children’s Health Insurance Program (CHIP) eligibility expansions or through comprehensive single-payer plans, is now off the table in most states due to budget concerns.  As a result, states are now targeting the cost factors that federal proposals postponed into later years or did not address at all.

State Medicaid plans are the largest factor in the push to control costs.  The stimulus bill provided states with increased federal matching funds for state Medicaid plans.  These matching funds were stipulated on states maintaining 2008 eligibility levels in these programs.  With this assistance ending December 31, 2010, it was possible that the states could escape, or at least delay, cost reduction efforts (including eligibility restrictions) until a recovering economy started providing additional state tax revenues.  As the recovery continues to move slower than expected, states are now facing the daunting task of funding their Medicaid plans with even lower revenues and less of a prospect for immediate federal help.

Budget gaps are forcing states to look at every option.  States are addressing pharmaceutical costs by creating new prior authorization requirements for certain drugs and encouraging the use of generics.  They are increasingly utilizing mail order systems and negotiating for lower reimbursement and increased rebates from pharmaceutical and medical equipment providers.  Health service providers are also receiving lower reimbursements, and some optional Medicaid services (dental, optometic, and others) are being eliminated altogether.  In addition to these reductions in services and reimbursement, plan enrollees are being required to pay more in co-payments and more states are looking at higher taxes on hospitals and insurers.  These efforts may forecast the policies the federal government adopts as Medicare costs continue to grow.

While coverage issues are largely on hold, states are acting under their authority as the primary regulators of the insurance market.  States continue to impose coverage mandates on health insurers, either through mandated benefits or, increasingly, mandated coverage for dependants in their 20s.  Nevertheless, reform proposals not addressed at the federal level are being considered.  Twenty two states have proposed constitutional amendments or other legislation that would prohibit an individual mandate to purchase insurance, as in Massachusetts, or limit the ability of the state to limit access to providers or health plans.  In addition, states have proposed measures that would allow residents to purchase plans available in other states, in effect eliminating their own mandated coverage requirements in an effort to make more affordable options available to consumers.

Robert Holden

February 2010

NATIONAL GOVERNORS ASSOCIATION (NGA)

Stateside Contact: Mark Anderson at mda@stateside.com

NGA will hold its 2010 Winter Meeting February 20-22 in Washington, DC. The meeting will feature the “Rx for Health Reform: Affordable, Accessible, Accountable” initiative. The initiative has been Vermont Governor Jim Douglas’ (R) priority as NGA Chair. This initiative will focus on the critical need for health reform to reduce health care costs, ensure Americans get the highest quality of care and increase coverage for those who lack health insurance.

Additionally, the following “Time Limited” policy positions will expire at the meeting and will have to be renewed in order to remain in effect:

Executive Committee

• EC-01. State Grant Programs
• EC-04. Public Pay and Pension Plans
• EC-08. State Countercyclical Funding
• EC-09. Federal Tax Policy
• EC-11. Representation in Congress for the U.S. Citizens of the Northern Mariana Islands

Education, Early Childhood & Workforce Committee

• ECW-02. Education Reform
• ECW-04. Early Education: Head Start and Other School Readiness Programs

Economic Development & Commerce Committee

• EDC-02. Transportation Conformity with the Clean Air Act (under EDC and NR Committees)
• EDC-09. Air Transportation

Health & Human Resources Committee

• HHS-04. Public Health Services
• HHS-05. Veterans Affairs
• HHS-11. Constitutional and Civil Rights in Managing Institutionalized Populations
• HHS-12. Food Stamps
• HHS-13. Emergency Management
• HHS-18. Indian Health Services
• HHS-19. Low-Income Home Energy Assistance Program
• HHS-20. Synar

Natural Resources Committee

• NR-02. Solid Waste Facilities
• NR-05. Transportation Conformity with the Clean Air Act (under EDC and NR Committees)
• NR-08. Environmental Compliance at Federal Facilities
• NR-12. Endangered Species Act
• NR-17. Land Management and Land Use Planning
• NR-19. Low-Level Radioactive Waste Disposal

NATIONAL ASSOCIATION OF STATE ENERGY OFFICIALS (NASEO)

Stateside Contact: Constance Campanella at cc@stateside.com

NASEO and the Association of State Energy Research and Technology Transfer Institutions (ASERTTI) will host the 2010 State Energy Policy and Technology Outlook Conference February 1-5 in Washington, DC.

The agenda includes:

*Implementation of the ARRA State Energy Program and Energy Efficiency and Conservation Block Grants.
*The DOE and Obama Administration proposals for the 2011 energy budget.
*A preview of DOE’s energy efficiency and renewable energy programs for the coming year.
*NASEO-ASERTTI Industrial Committee and Roundtable examining collaborative industrial efficiency efforts regarding funding, technological assistance and training.
*ARRA-funded clean energy jobs creation in the states.
*The latest on renewable energy technology, with a focus on photovoltaics, offshore wind and renewable biogas.
*Vehicle electrification, focusing on the cars, infrastructure investments and consumer demand.
*A National Laboratory Roundtable about current R&D and transferring emerging technologies.
*International energy policy.

NASEO, the administrator for the Zero Energy Commercial Buildings Consortium, a public-private partnership, sponsored an informal session at the Ecobuild America Conference in Washington, DC in December. David Terry, NASEO’s Executive Director, and other consortium representatives provided an overview of the consortium’s goal of the market transformation of commercial buildings to net-zero energy by 2030, the DOE’s Commercial Buildings Initiative and detailed information about the consortium’s working groups and activities. Other members of the consortium include the Building Owners and Managers Association, the International Code Council, ASERTTI, the American Institute of Architects, the Alliance to Save Energy, the North American Insulation Manufacturers Association and the U.S. Green Building Council