Health Reform: State Examples
April 2, 2010
With the passage of federal health reform, states face numerous implementation issues. Fortunately, state examples exist for many of the national reform components, which may provide useful lessons as states continue to move forward. Below is information about several reform components with links to NCSL and other resources.
STATE HEALTH REFORM TOPICS
Medicaid and CHIP Coverage Expansions
While the federal government has set minimum eligibility and benefit standards for Medicaid, many states have expanded their coverage to other populations, such as people with higher incomes and others who would not otherwise qualify, no matter how poor they are, such as childless adults. States have also used the Children's Health Insurance Program (CHIP) to extend coverage to more children and to pregnant women. States have different approaches to using Medicaid and CHIP to cover low-income populations beyond those required by federal law.
Insurance Exchanges & Connectors
Insurance exchanges or connectors link people and small businesses to health insurance options. They are statewide purchasing pools designed to offer consumers an easy-to-understand and wider range of health insurance products, some with a tax-advantage. Several features from the Utah and Massachusetts initiated state exchanges were included in the bills passed in the US House and Senate.
States often regulate or guide what health services are included in insurance policies, seeking to strike a balance among adequate coverage, choice for patients and affordability. These reports provide some specific examples of traditional and reform approaches.
Medicaid, CHIP and Medicare are public insurance plans that cover the elderly, certain people with disabilities, children, pregnant women, and low-income parents. Several states also subsidize health insurance for low-income people who do not qualify for Medicaid or CHIP. Generally, enrollment in these plans is subsidized fully or in part with state funds or taxes. Some states allow those who do not meet income eligibility limits to "buy-in" to CHIP coverage for their children, paying the full cost. And some states have Medicaid waivers to allow certain uninsured people to purchase Medicaid coverage.
State Employee Self-Insured Health Programs
At least 42 states now act as both health purchasers and insurers by managing and "self-funding" parts or all of their state employee health benefits programs. Most of these programs look much like private insurance products and some claim that these health plans provide an example of a "public option." State features, premiums, and innovations such as wellness and consumer-directed options, are included in the report below.
Premium Assistance Programs
Medicaid and CHIP Premium Assistance Programs
Premium assistance programs tap Medicaid and CHIP funds to purchase private insurance coverage. Through premium assistance, states can subsidize employer-sponsored coverage for workers who are eligible for Medicaid or CHIP or who have eligible family members.
Small Business Premium Assistance Programs
Some states offer premium assistance to help small businesses and/or low-income individuals purchase insurance in the private market.
Health Information Technology
To improve quality and control costs, many states are increasing the use of health information technology. States are adopting various strategies to transform health care from paper to the digital age including addressing privacy concerns, correcting misaligned financial incentives and allowing for data exchange among providers.
Prevention & Wellness
To prevent disease and promote healthy behaviors, states have passed initiatives to educate the public about healthier choices; to facilitate healthier lifestyles through community supports; to include wellness, nutrition, physical activity and fitness as elements within health reform; and to prevent the spread of infectious diseases.
Although states have a limited ability to require employers to provide coverage due to restrictions under the federal Employee Retirement Income Security Act (ERISA), a few states and one city require employers to pay for health care either as a contribution toward employee insurance or through taxes.
Massachusetts is the only state with an "individual mandate" that requires everyone who can afford insurance to purchase it or face a fine. New Jersey passed legislation in 2008 to create an "individual mandate" for children but there are no consequences for not complying.
Community Health Centers
Community health centers provide primary care services—priced according to ability to pay—primarily to those who are uninsured or are covered by public health insurance, such as Medicaid and CHIP. Acting as a medical home to millions of low-income people, community health centers can do much to improve the health of and reduce the cost of care in underserved areas. In addition to federal funding, many states provide financial support to community health centers.
Section 125 health cafeteria plans allow employees to pay for a variety of health care expenses without paying any federal tax on those charges. As of spring 2009, at least 12 states have added laws to require or encourage employers to offer a cafeteria plan for premiums, to help keep coverage available and affordable, while expanding the number of employees using commercial health insurance.
The patient-centered medical home model of care aims to improve the coordination of care, increase the value of health care received, expand administrative and quality innovations, promote active patient and family involvement, and help control the rising costs of health care for both individuals and other payers, such as Medicaid and private insurers. Legislators play an important role in creating and supporting this health care delivery model, especially in the policy areas of health information technology and provider payment reform.
There are disparities in heath, access to appropriate services and quality of health care received among different populations. For many racial and ethnic minorities in the United States, health status is often associated with an individual's economic level, insurance status, and gender. For example, American Indian women are nearly twice as likely to die from cervical cancer compared to white women, and African Americans are 1.5 times as likely as non-Hispanic whites to have high blood pressure.
Small Business Employers
Many employees of small businesses are uninsured because insurance premiums can be much higher when there are fewer employees to spread the risk. Many states help small employers to provide insurance to their employees through premium assistance, reinsurance, tax incentives and multi-employer pooling. The following states have laws intended to assist small employers to attain affordable insurance: Alabama, Arizona, Arkansas, Georgia, Idaho, Kansas, Kentucky, Maine, Massachusetts, Montana, Nevada, New Mexico, New York, North Carolina, Oklahoma, Tennessee, Washington and West Virginia.
For almost a decade, some states have looked to consumer-directed and free-market dynamics to provide better health care. Strategies include use of high-deductible health plans, health savings accounts (HSAs), tax credits for individuals and small businesses, cross-state insurance purchasing and exemptions from traditional mandates.
States have examined a wide variety of policies to contain costs and improve efficiency. Such strategies are often used to control public health care expenditures in Medicaid, CHIP and the public employee health programs.
Prescription Drug Coverage
At least 20 states have programs that make pharmaceuticals more affordable and accessible for seniors and people with disabilities covered by Medicare, by paying for gaps in federal coverage, including costly copayments and the $3,000+ annual "donut hole." Also, several states use direct negotiation to provide discounted drugs to residents under age 65 or those with limited incomes and also save on purchasing for public program.
- State Pharmaceutical Assistance Programs-NCSL
- Prescription Drug Bulk Purchasing