Stumbles Aside, States Press to Cover All

More than a dozen states are entertaining the idea of making health insurance available to all kids or all residents, but the same problems that stymied such ambitious proposals for years again are tempering expectations.

States' lofty ambitions to tackle the national problem of 46.6 million uninsured Americans are starting to meet stubborn reality.

In Massachusetts, widely regarded as the model for universal health care proposals across the country, a study released this week showed the costs for families to buy baseline medical coverage could be nearly double what policymakers thought last year, when they decided all Bay State residents must get insurance by July 2007. The high price of coverage could undermine the landmark legislation or delay its effectiveness.

Minnesota Gov. Tim Pawlenty (R) already has stepped back from a post-election promise to cover all uninsured kids there. His January budget proposal set aside enough money to cover just 13,000 of the state's 70,000 uninsured kids.

And California Gov. Arnold Schwarzenegger (R) has encountered fierce resistance to his ambitious new plan to ensure that all Californians find coverage. His proposal relies on a wide range of taxes and fees, major changes in insurance rules and a massive influx of federal funds - and opposition to any of those could unravel the effort.

All three states ran into the biggest obstacle to providing universal coverage: its hefty costs. But even the bad news isn't enough to keep other states from jumping on the bandwagon with Massachusetts and a handful of other vanguard states. Just this week, Wisconsin Gov. Jim Doyle (D) used his state of the state address to call for reforms to cover 98 percent of the state's residents, and Michigan Gov. Jennifer Granholm (D) lobbied for federal approval for her plan to cover the state's 1.1 million uninsured residents.

At least nine states are considering proposals to cover their entire population, following the lead of Maine, Massachusetts and Vermont, which already have launched programs. Additionally, eight states are mulling universal coverage for children. Illinois already covers all kids; Pennsylvania will soon; New Mexico covers kids 5 and under; and Connecticut offers insurance for all kids in the country legally.

Health-policy experts caution that any major expansion of health coverage will run into setbacks, even though the public and sometimes politicians expect quicker results.

"Any sort of major reform, and frankly any minor reform, takes time. … So there is certainly a risk that there will be unrealistic expectations about what will be achieved early on," said Jennifer Tolbert, a policy analyst for the Kaiser Commission on Medicaid and the Uninsured.

Tim Murphy, who served as state health secretary when Massachusetts' universal coverage plan was enacted, stressed that the final package came after three years of study and negotiation with interested parties.

The Bay State's plan requiring everyone to buy insurance aims to help people who can't afford insurance by using money that's already being spent on health care. Before acting, the state had to figure out how money in the health system already was being spent, he said.

"One of the biggest tasks is to have that knowledge. Otherwise, the result is inertia plus more money," Murphy said.

The example set by Massachusetts, Maine and Vermont is one reason for the sudden interest in universal health insurance. But there also are other factors at play.

Massachusetts was in a unique situation and stood to lose $375 million of federal funds if it didn't act. But the impetus for other states is that the ranks of uninsured are growing at a time that states may have some money to deal with the problem. States' revenues have improved because of a stable economy and a slowdown of health spending.

Ellen Andrews, a health expert with the Council of State Governments, said it's unusual that the ranks of uninsured are growing even as the economy rebounds. "It used to cycle: People lost their jobs, but when they got their jobs back, they got health insurance. Well, that isn't happening any more. There are a lot more people with what (you) would call 'good jobs' who still don't have insurance," she said.

Politics also is a strong factor in calls for universal coverage.

Now on the presidential campaign trail, Republican hopeful Mitt Romney is touting his success at shepherding through the universal coverage bill as Massachusetts' governor. Democrats running for the White House, including U.S. Sens. Hillary Clinton of New York and Barack Obama of Illinois and former U.S. Sen. John Edwards of North Carolina, are touting some form of universal insurance plans.

Five Democratic governors championed the cause of guaranteeing kids access to health care during their 2006 re-election bids; all of them won.

And President Bush made access to health insurance a centerpiece of his State of the Union address this year.

In most cases, the moves toward universal coverage are taking place where states already have enjoyed success with providing greater health care coverage. Except for California and New Mexico, the states weighing complete coverage already have a lower-than-average rate of uninsured residents.

Maine, whose health care plan took effect in 2005, looks to use savings squeezed out of the health care system to subsidize insurance. About 11 percent of Mainers lack health coverage, compared to 16 percent nationally.

Likewise, only 11 percent lack insurance in Vermont, which passed a law last year allowing residents to buy coverage through the state. Gov. Jim Douglas (R) said Vermont couldn't ignore those who remained uninsured. "I think it's a crying need in our state - and I'm sure in others - that (is) leading policymakers to consider this priority and to move the agenda forward," he told Stateline.org.

Other states are focusing their efforts on covering kids, who are cheaper and more likely to be insured than adults.

Illinois began offering insurance to all kids last year. Parents of all incomes can buy state coverage, depending on how much they make. Even illegal immigrant children, who are ineligible for Medicaid, qualify for Illinois' All Kids program.

Pennsylvania will launch a similar program in March. New Mexico agreed last year to cover all children 5 years old and younger. In Connecticut, all children who are citizens can get insurance through the state, and Gov. Jodi Rell (R) wants newborns to automatically qualify for coverage for their first two months.

Former Ohio Medicaid director Barbara Edwards said covering children is a "rallying point of public support." The public may question spending money on poor adults, but it's often easier to convince the public to cover kids, she said.