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Intersection of Policy and Politics in State Coverage Expansion Campaigns


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Title: Intersection of Policy and Politics in State Coverage Expansion Campaigns

Intersection of Policy and Politics in State
Coverage Expansion Campaigns
  • Walter Zelman
  • Professor, Director,
  • Health Science Program
  • California State University, Los Angeles
  • 323. 343.4635

Study Goals
  • Better understand the political dimension of
    coverage expansions
  • Provide value to those seeking such expansions
  • Increase research interest in that dimension, and
    provide starting points for more political

Scratching the Surface
  • Study involves 5 states and multiple issues,
    options, and variables
  • Many could be the focus of a full study
  • Given limited number of states, often unclear
    what is an exception and what is trend
  • Result Findings here as likely to be questions
    as answers

Study Methods and Sources
  • Review of public information
  • Monitored newspapers
  • Web sites of interests and others
  • Reports, press releases, and other publicly
    available documents
  • Interview about 5 individuals per state
    participants and observers

Outline of Presentation
  • I Systemic Factors
  • II Processes of Policy Development
  • III Financing Reform and Cost Control
  • IV The Interests
  • V Strategy
  • VI Leadership

Systemic Factors Complexity and
  • The redistricting analogy interrelated nature of
    the parts
  • Public and private sector connections
  • Multiple interests, major economic impacts likely
    to be involved in almost any issue
  • Hard to take one issue or opponent at a time

System Factors the Institutions and the rules
  • Supermajority votes the California problem
  • 60 votes in the US Senate
  • Political Science 101 the Madisonian model
  • Rules may favor the status quo, especially when
    interests are numerous and powerful Thumbs on
    the checkerboard
  • Unlimited need for campaign funds, mostly from
    the interests

Systemic Factors Federal Issues and Funding
  • Federal financing Medicare, Medicaid, SCHIP,
    disproportionate share, tax code, etc
  • Do states have tools to limit cost growth, and
    especially the major technological drivers?

Systemic Factors Economic Cycles and Budgets
  • Best opportunities for reform may come when
    capacity to address the problem is low
  • Hard economic times raise visibility of the
    issue, but put pressure on state budgets higher
    spending, lower revenues

Concerns and Economic Opportunity
Policy Development Private Processes
  • Governors and private processes
  • Good staff talent
  • Largely private
  • Appreciation of complexity led to expanded
    concepts to reform, more focus on cost
  • Romney came to individual mandate
  • Rendell moved from fed to state focus and more
    focus on small business and economy
  • Schwarzenegger all connected
  • Spitzer need to move incrementally kids first

Policy Development Public Processes
  • Varieties of public processes and outputs
  • Road maps MA, NY
  • Task forces hearings, reports, differently
    constituted IL, PA, NY
  • All states except California
  • Varied purposes and value
  • May reflect emphasis on search for
    evidence-based, consensus solutions

Financing Options Employer Requirements
  • Trend may be to modest levels
  • Low percentage requirements
  • Perhaps a sliding scale
  • Demands on employers may be limited by concerns
    about economic impacts
  • Particularly true for small employers who barely
    seem to even need organized lobbying power
    others use them to make the case

Financing Options Employer Requirements
Financing Options Employers
  • Chambers, like most associations, may continue to
    reflect lowest-common denominator positions
  • There is evidence of some employer willingness to
    accept some shared responsibility
  • But, support may require protection in out years
  • Apparent, sizable reluctance to break ranks
  • Individual business supporters or coalitions can
    reduce appearance of across-the-board business
  • May even be possible to win appearance of small
    business support

Financing Individual Mandate
  • Logic for mandate seems strong
  • May increase number of offering employers
  • Probably needed to fix individual market
  • Politically, may be required to win business,
    insurer support
  • Is possible to protect low-income families
  • Eventually accepted in MA limited version in CA
    IL task force accepted it

Financing Individual Mandate
  • But opposition still considerable All states
  • Slippery slope away from employer responsibility
    Uncertainty trumps economics
  • Large deductibles may make it affordable, but
    also less attractive
  • It is a hard sell for unions and to consumers
  • Politically, support may require imposition of
    requirements on employers

Financing Federal Funds
  • State reform as federal reform
  • All states report funding as the central
    challenge especially in lean years
  • States still wary of imposing broad taxes
  • Successful state efforts will probably require
    more access to federal funds
  • States with great disproportionate share funds
    may have greater capacity

Lets Not Forget… Public Debates Matter
Percent who support a universal health insurance
system, in which everyone is covered by a program
like Medicare that is govt-run and financed by
Percent who support the current system, in which
most people are covered through private
employers, but some people have no insurance
Percent who say they would support a universal
health insurance system even if it…
Meant they would pay either higher premiums or
more taxes
Meant there were waiting lines for non-emergency
Limited their choice of doctors
Meant some treatments currently covered would no
longer be covered
Source ABC News/Kaiser Family Foundation/USA
Today Health in America Survey (conducted
September 7-12, 2006)
Financing Cost Control
  • Policymakers clearly see tie they once did not
    see costs rising faster than wages
  • Public concern on costs also high
  • Some see cost control, improving system, as key
    to framing not uninsured
  • But public appears unwilling to deal with hard
    choices here

Pennsylvanias Employees and Businesses Cannot
Keep Up with Health Care Inflation
Increase in Family Health Insurance Premiums
vs. Inflation and Increase in Median Wages in PA
Between 2000 and 2006
WalterZelman Presentations
Projected Average Annual Growth in Illinois
Health Care Spending Without Reform, Gross State
Product and Wages 2005 - 2015
WalterZelman Presentations
American Views on Most Important Issue for
Government Saying Issue is One of Two Most
Source AP, 2006
Factors seen as Very Important Reasons for
Health Cost Increases
Financing Cost Control
  • Two conflicting themes
  • Cannot achieve or sustain reform without cost
  • Cannot achieve reform with cost control
  • Conflict easiest way to reduce interest group
    opposition is expanding, not contracting the pie

The Interests Organized Labor
  • Much of labor may lack enthusiasm for centrist
  • Traditional labor position employer required to
    pay 80 of defined benefit
  • Mixed reports on labor support in 2007-08
  • Issues with labor in MA, IL, CA
  • SEIU more supportive than AFL health care
    workers, lower wage workers
  • AFL more concerned on costs than SEIU
  • Purchaser, provider conflict?

The Interests Organized Labor
  • Concerns about individual mandate and slippery
  • Concerns about level playing fields
  • Concerns about loss of union benefits as a
    recruiting tool
  • Concerns about paying higher costs/taxes so that
    non-union employers can get subsidized coverage

  • Provider and leader in business community
  • Have been important supporters Mass, Ill
  • Can be major force for reform sees benefits, can
    lead in some business communities
  • Ideal interest group a leader in virtually every
    district Boards are whos who of community

  • Multiple problems in hospital leadership
  • Trade associations may not lead reform may
    produce winners and losers
  • Safety net, DSH hospitals will demand protection
    even as fewer dollars are needed
  • Multiple concerns about changes, reductions in
    revenue streams inherently conservative
  • Support of hospitals may require a larger pie

  • Not reported to be playing major roles
  • Negative in some states insignificant in others
  • Primary care and family physicians different can
    they fill the void?
  • Perhaps with public but not with inside
    political leverage

Health Plans
  • Some supportive of coverage expansions Can be
    sizable business asset
  • If insurance model unchallenged, regulatory
    elements limited and market rules acceptable
  • Support may require individual mandate
  • Those with underwriting models may be vigorous

  • Need much more study
  • Broad coalitions appear effective but capacity
    to mobilize public may be limited
  • Religious ties effective in several cases
    produce real credibility
  • Role of labor in these coalitions needs study

  • Little evidence of significant public pressure
  • Public attention to state issues way below that
    of federal
  • Single payer leverage down consumer groups
    support it, but more in theory than practice
  • But may still maintain capacity to undermine
    other reform efforts (California)

Strategies Partisan and Centrist
  • Consensus-building strategies seem dominant
  • Republican votes rare but Democrats need
    business and provider allies
  • Public, stakeholder processes may reflect that
    perceived need
  • Cost control now central to strategy

Leadership Some Findings
  • Systemic forces may be most important in long
    run, but leadership and specific decisions matter
  • Many leaders made major efforts
  • But many reports of major animosity between key
    players NY, CA, ILL
  • Significant input re Governors not maintaining
    positive, respectful relations with legislators

Leadership in Massachusetts
  • More recognition of leaders and leadership in
  • Is it just the result of success?
  • Or, did leadership really emerge and why?
  • Greater perception of shared need to succeed

Five States a Positive View
  • Massachusetts succeeded
  • Illinois has made progress, might have made more
    tax proposal hurt, Governors relations with
    Speaker hostile
  • Pennsylvania some progress made, issue still in
  • California came close
  • New York has potential

Five States an Alternative View
  • Massachusetts Unique
  • No new successes in 2007
  • Obstacles vary, but always substantial costs,
    complexity, multiple interests
  • Primary problem is finding a political coalition
    that will support the cost reductions or new
    financing needed
  • Creating, sustaining state reforms may require
    major federal assistance

Some Future Research Needs
  • Analysis of interest group positions. What might
    change, what wont hospitals, labor, physicians
  • Processes for seeking input and building support
    on costs and coverage

Premiums and Poverty Levels
What is Affordable?
  • Need to subsidize to higher levels of poverty
  • Cap on family spending 15 of income
  • Premium is 11,879
  • Income needed 79,193
  • of poverty 383

A Tale of Two States
A Centrist Strategy Core Premises
  • Must minimize widespread interest group
  • Accept coverage before effective cost control
  • Accept up-front, additional cost consider use of
    incentives for additional federal
  • Primary reliance on expansions of federal
    programs for new dollars

A Centrist Strategy Core Elements
  • Modest, individual mandate with adequate
    protections on affordability
  • Coverage would have to be broad deductibles or
    co-pays might be middle range
  • Modest, scaled employer mandate (ERISA
    flexibility or safe harbors may be required)
  • Some mechanism to protect against near-automatic
    increases in employer fee

A Centrist Strategy Core Elements
  • Reliance on expansions of federal programs for
    additional state funds
  • May need to include higher provider payments
  • Builds on current programs
  • Does not create new programs
  • Assumes a national strategy federal requirements
    with state flexibility

A Centrist Strategy Core Elements
  • Connector, pool, FEHB-type mechanism to ease
    subsidy, individual market, and pay employee
  • Capacity of pool to expand may prove critical
  • Potential to gain single payer support
  • Framing security (keep what you like, wont lose
    insurance), affordability, prevention
  • Revenue federal tax exclusion change?

A Centrist Strategy Core Elements
  • Visible public process to seek input from
    stakeholders and public and craft policy
  • Runs counter to traditional honeymoon strategy
    right choice may depend on margin of victory
  • High level commitment or commission to address
    long-term strategy for cost control
  • Alliances with sub-groups of major interests
    Physicians, large and small employers, insurers