Carper's State Run Health Plans a Bridge to Nowhere
As Democrats in the House are nearing a consensus on health care reform, Delaware's Tom Carper has introduced a potential compromise in the search of common ground in the Senate. Hoping to bridge the chasm between the watered down Baucus bill and the persistently popular public option, Carper has called for the creation of health insurance plans instead run by state governments. But by sacrificing national economies of scale and failing to address the wide disparities in state health care resources and performance, Carper's proposal is a bridge to nowhere.
As the New York Times and the Wall Street Journal reported, Senator Carper's well-meaning effort is intended to split the difference between Max Baucus' feeble "co-ops," Olympia Snowe's stonewalling "trigger" and the public option favored by a majority of Americans:
A new proposal by Sen. Tom Carper would spell out how to boost competition in the private market by enacting government-run plans at the state level. States could act alone or in concert with others to gain more leverage in the marketplace, and would be bound by the same rules established for private companies using the national insurance exchange envisioned by the Senate Finance bill. Another option would entail states opening their workers' employee-benefit plans to the general public.
The Delaware Democrat's plan won praise from some in his party Tuesday as a way of bridging differences among them.
"Conceptually, having the states take responsibility makes a great deal of sense," said Nebraska Sen. Ben Nelson, a key voice for moderate Democrats. "It is important that we really take a close look at this." He noted that states are already in the health-insurance business because they administer Medicaid and other federal-state programs.
Sadly, when it comes to the twin objectives of lowering costs and providing coverage to all, the experience of state-by-state systems hasn't been a happy one.
Writing in the Washington Monthly two years ago ("Over Stated"), Ezra Klein documented "why the 'laboratories of democracy' can't achieve universal health care." Looking at the examples of Hawaii, Tennessee, Oregon, California and Massachusetts, Klein concluded:
The idea of giving universal health care a little more time in the laboratories of democracy may sound tempting to certain cautious, bipartisanship-loving Beltway observers. But letting states continue to take the lead would be disastrous, for one very simple reason: providing health care for all citizens is one of those tasks, like national defense, that the states are simply unequipped to manage on their own. The history of state health reform initiatives (and there's quite a history) is a tale of false hopes and great disappointments...
The current appetite for universal health care in state capitals may seem thrilling and unprecedented to some, but to those who follow the issue it carries an unsettling charge of déjà vu. Over the years, states have tried programs of many different ideological and economic persuasions. All of them failed, and not because the programs were insufficiently inventive, but because states are structurally incapable of sustaining them.
For starters, state constitutions and the vicissitudes of the business cycle make stable funding for the growing rolls of the insured problematic from the get-go. Unable to run budget deficits in lean years, recession-strapped state governments invariably must cut benefits, beneficiaries or even their programs altogether. Hawaii ultimately "restricted eligibility to people whose income was twice the poverty line, and introduced an assets test," with the result that "the dreams of universality evaporated." The ambitious TennCare managed care plan of the 1990's eventually foundered as the Volunteer State faced a fiscal downturn and insufficient tax revenues. As Klein wrote:
When voters rejected a tax hike, the state began cutting benefits. By 2005, Democratic Governor Phil Bredesen had dissolved much of the program, leaving more than 300,000 Tennesseans without coverage. "I say to you with a clear heart," said Bredesen, "that I've tried everything. There is no big lump of federal money that will make the problem go away."
As for California, Arnold Schwarzenegger's universal health care proposal ran aground in the state senate in Sacramento. With the financial meltdown that has gripped the Golden State, that program is now distant memory. That may explain why on Tuesday Schwarzenegger issued a statement backing President Obama's initiatives for national health care reform.
For its part, Massachusetts with its health insurance mandate for individuals has enjoyed great success in reducing the ranks of the uninsured. And to be sure, the addition of a public option there could help the state rein in costs and avoid further eligibility cuts and budget overruns. But as a wealthy state which started with a low rate of uninsured residents and an existing $1 billion pot to pay hospitals to treat them, Massachusetts may not serve as a model for the other 49.
All of which highlights the dramatic disparities from state to state in health care performance and the availability of resources to improve it.
A 2007 Commonwealth Fund report, "Aiming Higher: Results from a State Scorecard on Health System Performance," examined states' performance across 32 indicators of health care access, quality, outcomes and hospital use. Topping the list were Hawaii, Iowa, New Hampshire, Vermont and Maine. Bringing up the rear were the Bush bastions of Kentucky, Louisiana, Nevada, Arkansas, Texas, with Mississippi and Oklahoma. (The 10 worst performing states were all solidly Republican in 2004; 8 voted for John McCain in 2008.)
The extremes in health care performance are startling. For example, 30% of adults and 20% of children in Texas lacked health insurance, compared to 11% in Minnesota and 5% in Vermont, respectively. Premature death rates from preventable conditions were almost double (141.7 per 100,000 people) in Tennessee, Arkansas, Louisiana and Mississippi compared to the top performing states (74.1 per 100,000). Adults over 50 receiving preventative care topped 50% in Minnesota compared to only 33% in Idaho. Childhood immunizations reached 94% in Massachusetts, compared to just 75% in the bottom five states.
The implication, as the Washington Post detailed in a May article titled "A Red State Booster Shot," is that it would be blue state residents funding health care reform for their red state brethren.
Which is exactly as it should be. In the United States, luck - whether in parentage, accident, disease or state of residence - should not determine each American's access to insurance or prospects for a healthy life. Short of providing massive federal funding to offset empty state coffers, cushion economic downturns and account geographic disparities in funding, Tom Carper's compromise won't bridge the gap to universal coverage and lower costs. If not a bridge to nowhere, Carper's is a bridge too far.
UPDATE 1: Over the Washington Monthly, Steve Benen weighs in on the Carper plan, including feedback from TNR's Jonathan Cohn and the Washington Post's Ezra Klein. While each calls the plan "interesting," Klein echoes his 2007 piece by noting "The problem with it is that it is, at best, regional. It doesn't have the buying power of a national public option."
UPDATE 2: As it turns out, on Thursday the Commonwealth Fund released its 2009 state-by-state health care scorecard. Here are link to the executive summary, the full report and PDF and Powerpoint chart packs.
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