History of State Health Reforms

Though the Massachusetts health reform plan received ample media attention as unprecedented legislation, Massachusetts is just one of many states to implement public plans for the uninsured in an effort to achieve universal health coverage. The only original addition in the reform is the individual mandate law. Minnesota’s 2003 HealthRight bill, Tennessee’s TennCare program, and Oregon’s 1989 reform were similarly expected to create landmark change in health coverage among state residents. Washington and Vermont passed such legislation in the 1990’s. These reform attempts were all received similarly by the national media, but none lived up to their claims.

The Massachusetts reform is simply a reincarnation of nearly identical plans that have been tried and failed in numerous other states. However, this fact has been misconstrued by the national media, which has portrayed each attempt as unique and revolutionary. After the reform, Massachusetts was lauded as “the only American state committed to comprehensive medical care.” (CBS, 4/6/06) Minnesota’s reform involved subsidies for the uninsured and a state pool that employers could buy into, and was welcomed as a “plan to solve the health insurance crisis.” (USA Today, 7/1/92) Similarly, Oregon’s health reform in 1989 made headlines such as “Oregon’s Health Law Cure for National Ailment.” (Tulsa World, 10/10/89) Tennessee’s governor claimed his plan would become “a national model” and “the most radical health care plan in America.” (Federal and State Insurance Week) All of these plans, advertised as solutions to the national health care crisis, were eventual failures. Harvard professors David Himmelstein and Steffie Woolhandler note that “each of these reform efforts promised cost savings, but none included real cost controls.”

Tennessee’s massive healthcare reform, TennCare, exemplifies the typical trend of these incremental state reforms. Tennessee planned to cover 300,000 uninsured residents in the first year, expanding to 500,000 in the second, through increased federal funds and expanded Medicaid access for the uninsured. The plan, however, quickly proved unsustainable, with the rate of uninsured in Tennessee dropping from 14.7% to 11.2% the first year, but then rising to 16.4% the following year as funding for new enrollment deteriorated. Studies show that, if left unchecked, TennCare would have consumed 91% of all new revenue growth by 2008, creating an overwhelming fiscal crisis and essentially eliminating the state’s ability to fund other state departments and priorities.

States which implemented “universal” incremental reforms, similar to Chapter 58, between 1987 and 2005 overwhelmingly followed the national trend of increasing percentages of uninsured citizens rather than resulting in decreased rates after the implementation of reforms. Consistently, these incremental reform strategies have faced overwhelming budget constraints due to inadequate cost-control strategies and few effective sources of revenue. These budget crises, coupled with rising health care costs, have prevented incremental reform movements in other states from delivering on promises of “universal” health coverage. Single-payer systems cut the waste out of health care by removing a large portion of the administrative overhead. Without addressing the underlying problem of waste and abuse by the insurance companies, universal health care will not be achievable.

Further Resources: