Rhetorical Federalism: Governing Institutions, Planning, Public Investment and The perils of health-care federalism.

August 17, 2013 at 8:02 PM

Is it a matter of finding a top-down pattern or a bottom-up approach to American federalism?  In other words, should changes occur from the top down with the national government establishing policies that determine the scope and content of health care coverage for the entire U.S. population?  Or should it operate from the bottom up, allowing states to have the flexibility to experiment with different packages of benefits and services or even to establish their own individual, state-level health care systems?  This fundamental question of federalism and the balance between these two approaches will continue to dominate future discussions and analyses of American health care policy.

We cannot lose sight of the time where state officials use nontraditional organizations or partisan group and mechanisms or direct lobbying, mobilizing public opinion to exert influence on congressional deliberations.  These times shows that state officials reflective in shaping policy how one of their concerns are closely aligned with those of federal officials.  Imagine if the federal government deployed its powers to increase the ability of individuals and states to choose law.  What is it about reform, about the particular exercise of federal power to compel rather than deter the purchase of health insurance by individuals that has sparked such concerted objection from states?  The problems of American health care bound up with its strengths.  On the one, hand, our system yields the most medical innovations, the widest availability od cutting-edge treatments, and the highest cancer survival rats in the world.  On the other hand, lavish spending on such technological wizardry inflates costs and laves millions unable to afford basic coverage.  Over time, we would expect the costs of these new medical innovations and treatments to come down, much as they have in other industries transformed by niche technologies, like telecommunications and consumer electronics.  So why are health costs different? 

The competitive forces that drive down process throughout most of our economy often fail to constrain the cost of health insurance.  Given that so much care is provided on a fee for service basis to patients who have already surpassed their deductibles, providers seldom make cost effectiveness a high priority.  Patients choosing the most expensive procedures are rarely responsible for paying for them.  And as long as insurers are legally bound to pick up the tab, patients have little reason to pay attention to prices.  Addressing this problem has been a key goal of policy reformers on both sides of the political aisle.  It has been at the center of a long-running debate over health care that has produced, among other attempted solutions, the Affordable Care Act.  In that debate, some form of managed care-in which insurers drive bargains with providers and enforce rules to manage the volume of health services doctors employ-has been widely recognized as essential to controlling costs.  The Affordable Care Act, for instance, established Accountable Care Organizations, which build on earlier attempts to encourage managed/care networks that compete to provide health Care more effectively.  But this latest form of managed care-and any other that might follow/is likely to fail unless reformers look to the states.  For all the attention heaped on federal health policy, the debate has largely neglected the responsibly of state governments for inflating the cost of health insurance.  Simply put, the effectiveness of managed care has long been undermined.

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The invocation of federalism arguments in the health care debate offers several possible benefits.  Rhetorical federalism brings transparency to the challenges of implementing a complex, multi-faceted package of reforms.  Massachusetts, and now California, have the boldest plans.  But they are not the only states concerned with reducing the ranks of the uninsured.  Illinois, Tennessee and Pennsylvania have pledged to insure all children.  Massachusetts for example, has had in place a § 1115 waiver expanding Medicaid eligibility to 300% of FPL.  That waiver, which represented $385 million dollars in federal revenue for state health coverage, was set to expire in 2007.  The potential loss of substantial federal health care funding was a significant driver in bringing lawmakers from opposite ends of the political spectrum together to enact the Plan.  The success or failure of universal coverage in Massachusetts has seemed to rest on renewing the waiver.  In addition to continuing expanded eligibility, the waiver renewal submitted to federal authorities for approval included direct subsidies to safety-net hospitals, shifted insurance subsidies for uninsured residents, and improved outreach.  It is important to note that some of California’s largest public projects, including the State Water Project, the Master Plan for Higher education, and the state highway system were passed during Governor Pat Brown’s tenure about four decades ago.  A rise in federal government aid for domestic infrastructure, notably a massive program for highway construction, helped propel Brown’s efforts to expand the state’s infrastructure.  State governors, e must remember, have less ideological baggage.  States have often been America’s policy laboratories, pioneering changes that becomes national models.  Massachusetts tried and failed to fore employers to provide health insurance 

Three things suggest that state-led innovation has greater promise now than in past.  However, I suggest that there are five.  The first is the Schwarzenegger-Romney effect.  Second, the big federally-funded State children’s Health Insurance Programme (SCHIP) is up for renewal this year.  Third, a revamping of the insurance market for individuals and small businesses.  Fourth, Massachusetts’s success much like Illinois, Tennessee, and Pennsylvania will depend on whether its mandate actually prompts people to buy insurance.  Fifth, before the ACA was enacted, it certainly made sense for states to engage in the policy debate over whether comprehensive federal state health reform was needed and, if so, what form it should take.  After President Obama signed the ACA into law, states continued to express vigorous opposition through various channels including proposing state legislation purporting to nullify or opt out of the new federal health law.

But we have to remember that the United States is not unique in facing issues related to the scope of the spending power in a federalist system.  The purpose of Congress is not to serve as an arena for cultural war or ideological sport. 

Concluding thoughts

Health policy debates are replete with discussion of federalism, most often when advocates of reform put their hopes in states.  But, specifically, health policy is remarkably silent to the question of allocation of authority, rarely asking which levels of government ought to lead.  Should we be suggestive of the fact that the federal government should be able to lead present and future financing of healthcare coverage, since it would require major changes in American intergovernmental relations t make innovative state health care financing sustainable outside a strong federal framework?  In the United States, responsibility for financing health care is spread over numerous schemes.  That is, employer-based health insurance (EBI), which is b far the most important in terms of enrollees, covering just over 60 percent of the nonelderly population.  Perhaps and is more telling criticism of the approach to is that in the United States man might not agree that an ‘ideal’ system is one that satisfies a commands universal support in the comparator.  Indeed, federalism may be the most important governmental feature shaping the nation’s health care system. 

 The Guest Column is our readers' opportunity to write about a given issue or topic in an in-depth and educational manner.

The opinions expressed herein are the writer's alone, and do not reflect the opinions of TAPinto.net or anyone who works for TAPinto.net. TAPinto.net is not responsible for the accuracy of any of the information supplied by the writer.

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