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Lawmakers Unveil Bill that Would Help Fund States' Efforts to Cover Uninsured

By Mary Agnes Carey, CQ HealthBeat Associate Editor

January 17, 2007 -- A bipartisan, bicameral group of lawmakers unveiled legislation Wednesday that would provide federal funding for state initiatives to provide health care coverage to the nation's more than 46 million uninsured.

Noting that Congress seems incapable of reaching consensus on legislation to help cover the uninsured—and that the upcoming 2008 presidential election will further complicate those efforts—funding state proposals might be the best way to proceed, the lawmakers said.

"Our bill authorizes grants to states or groups or portions of states to enact the strategy best suited to them," Rep. Tammy Baldwin, D-Wis., said at a news conference. "Under our plan, states have a lot of freedom to think creatively and independently."

Sen. Jeff Bingaman, D-N.M., said that most of the major efforts aimed at reducing the uninsured are happening at the state level and that the federal government should help foster such efforts, as well as help states improve the quality of health care offered and expand the use of information technology. "The principles underlying the legislation would . . . give states greater latitude and resources with which to experiment to accomplish those objectives," Bingaman said.

Massachusetts and California have recently unveiled proposals to help cover their states' uninsured and Democratic Pennsylvania Gov. Edward G. Rendell is unveiling his state's proposal Thursday.

The House and Senate bills would authorize grants to individual states, groups of states, or portions of states to fund a variety of approaches, such as tax credits, an expansion of Medicaid or the State Children's Health Insurance Program, or health savings accounts as ways to cover the uninsured. The proposals would be submitted to a bipartisan "State Health Innovation Commission," which then would present the proposals to Congress for review and funding.

At the end of five years, the commission would report back to Congress on how the states' approaches are working. As part of their proposals, states also may ask for relief from federal laws that they think complicate efforts to cover the uninsured, such as tax law or the 1974 Employee Retirement Income Security Act, known as ERISA (PL 93-406), which governs multi-state employers.

Beyond start-up funds for the commission set at between $3 million and $4 million, there is no specific funding level in the bill, said Sen. George V. Voinovich, R-Ohio, a cosponsor of the Senate bill. "I think the decision will be made by Congress: How promising is the proposal and what is the budget situation?"

Rep. Tom Price, R-Ga., a physician and House sponsor, said savings from the state proposals could be used to pay for the grants.

With spending on care in the United States reaching $2 trillion and 16 percent of the nation's gross domestic product in 2005, creating access to affordable, quality health care "is the greatest domestic challenge this nation faces," Voinovich said. But he said political pressures from the upcoming presidential election will make impossible for Congress to take action. "Dealing with this problem between now and the election is not realistic," he said.

Arthur Garson Jr., dean of the University of Virginia's School of Medicine and one of the advisers who helped Bingaman develop the bill, said it makes sense to look to states as testing grounds for ways to help reduce the number of uninsured.

"The federal government has taken little substantive action, but the states have moved in impressive ways," Garson said. "This is a way to start moving, one state at a time, toward improving our health care system."

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