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Report: States Making Strides in Overhauling Health Care Despite Weak Economy

By Melissa Attias, CQ Staff


February 20, 2009 -- Although no states in 2008 passed universal health coverage initiatives in the midst of a struggling economy, some states were able to enact laws that extended coverage for children and promoted cost and quality transparency, according to a BlueCross BlueShield Association (BCBSA) report released Friday.


The report, entitled "State Legislative Health Care and Insurance Issues," analyzes how state governments addressed key health issues in 2008.

"I tend to say the states are the leaders in health care reform," BCBSA Director for State Research and Policy Susan Laudicina said Friday at a news conference. "So far we've only had incremental change from the federal government on down. States can tell you what works and what doesn't."

According to the report, the states' efforts to expand health coverage for children were constrained by a lack of state and federal funding sources due to the weak economy. Nevertheless, five states—Colorado, Florida, Iowa, Kansas and Minnesota — modestly expanded their State Children's Health Insurance Program, while New Jersey mandated that all children ages 18 and younger have health insurance. Laudicina said the results of the New Jersey law are currently limited, however, since the legislation lacks an enforcement mechanism and has not specified funding source.

The report also shows that nearly half of the states considered establishing requirements to collect and publish data on provider charges and medical outcomes in 2008.

Nine states—Colorado, Florida, Iowa, Kentucky, Louisiana, Rhode Island, South Dakota, Washington and West Virginia—passed transparency laws, while five states—Iowa, Louisiana, Rhode Island, Washington and West Virginia—passed laws that require health providers to release their hospital-based infection rates and/or medical outcomes.

Because of the budget crisis, however, Laudicina said states are not showing much enthusiasm for universal coverage mandates. California 's universal coverage bill was defeated in the state Senate Health Committee last January and the New Mexico legislature adjourned without passing Democratic Gov. Bill Richardson's universal coverage legislation.

"Covering adult independent children is the one area where I see more mandates," Laudicina said.

Nevertheless, she said that several states considered creating and expanding subsidy laws for insurance premiums and allowing health insurers to offer incentives to promote wellness programs during 2008. In addition, she said health insurance technology (HIT) legislation is currently pending in 12 states, while 33 states passed HIT legislation during the past three years.

During Friday's news conference Alissa Fox, senior vice president of BCBSA's Office of Policy and Representation, also outlined BCBSA's positions on key components of health care overhaul.

Fox said BCBSA does not support a public government health insurance plan open to everyone because it believes private health plans are best equipped to provide every American with health insurance

"We question why that's needed," Fox said. "We see the private sector and we innovate in ways we think, quite frankly, the federal government could never do."

Instead, BCBSA believes health care overhaul should build on the employer-based system to focus attention on the cost and quality of health care.

Fox also said BCBSA opposes the development of federal agencies called "connectors" that would facilitate health insurance shopping for individuals and small businesses.

"We do not want a new federal bureaucracy," Fox said. Instead, BCBSA supports a state-based approach to overhauling purchasing arrangements.

Fox also noted that BCBSA is pleased with federal SCHIP legislation and provisions for HIT, subsidies for the unemployed and provisions to accelerate comparative effectiveness research in the economic stimulus package.

Fox also said BCBSA would support the appointment of Democratic Gov. Kathleen Sebelius of Kansas as Secretary of Health and Human Services.

"She's very knowledgeable about insurance," Fox said. "We think she'd make an excellent candidate."

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