The Health Care Compact?

Kirsten Stewart reported recently in the Salt Lake Tribune (http://www.sltrib.com/sltrib/news/53757475-78/health-compact-states-bill...) that Utah has joined a six state effort to avoid implementation of Obama-Care by passing legislation concerning an interstate "Health Care Compact". Excerpts:

The Salt Lake Tribune
March 20, 2012
Utah fifth state to join Health Care Compact
By Kirsten Stewart

Utah Gov. Gary Herbert on Tuesday signed a controversial measure to replace Medicare and Medicaid with a block grant to the states.

SB208 would have Utah join an interstate "Health Care Compact" designed to allow states to opt out of federal health reform without forgoing billions in federal funding.

But hospitals and consumer advocates warned the bill risks tying Utah’s fate to states with poorer health and higher health costs.

It also would also mean sacrificing $132 million in federal funding by 2014 because the block grants are not designed to keep pace with medical inflation, they said.

To date, four states have pledged to join the compact: Texas, Missouri, Oklahoma and Georgia. Two governors have vetoed the idea, including Arizona Gov. Jan Brewer.

Here is what they are saying about the Health Care Compact in Indiana:

Health Care Compact Blog
March 21, 2012
Indiana Gov. Mitch Daniels Signs Health Care Compact Into Law
By Shonda Werry

Gov. Mitch Daniels Monday signed the Health Care Compact into law, paving the way for restoring state control over health care policy and providing Hoosiers an alternative to the federally-run system.

The Health Care Compact is an initiative of the Health Care Compact Alliance, a nonpartisan organization dedicated to providing Americans more authority over decisions that govern their health care. It does not make suggestions on what policies individual states should pursue but advocates that health care policy decisions be made at the state level.

The Compact has been introduced in 13 states since February of 2011 and has been adopted in Texas, Georgia, Oklahoma, Missouri, and now Indiana.

For the Health Care Compact to become law, it must be approved by Congress. Once it is ratified, states will then be responsible for crafting their own policies.

Dr. Don McCanne has posted comments about this interstate effort:

Since the political barriers to enacting a national single payer program seem to be insurmountable, at least for the near future, many single payer activists are pursuing state level single payer models of reform. To be truly single payer, federal legislation would be required to free up funds from federal programs. The Health Care Compact should give us pause as to whether or not we want to give states that much control over our federal tax funds.

Under the Health Care Compact, Medicare and Medicaid funds would be transferred to the states under a block grant. To understand the significance of block grants for programs such as these, one need look no further than the House Budget proposal introduced yesterday by Congressman Paul Ryan. His proposal for block grants for Medicaid would eventually cut the federal contribution in half, leaving the states to fill in the gap.

With the budget problems that states already face, what would happen to coverage for Medicaid-eligible beneficiaries under a block grant? Even if all funds were combined into a single risk pool, these Medicaid cuts would result in either benefit reductions or in the need for higher state-based revenues, whether as taxes or premiums.

Six states - Texas, Georgia, Oklahoma, Missouri, Indiana, and Utah - have now passed the Health Care Compact. They are asking to use funds from existing federal programs to establish their own state health care programs. With their tight budgets and a further decrease in federal funding, would any of these states pass a single payer program that provided all necessary health care services for everyone? Of course not. Instead they seek to establish insurance markets that cross state lines, promoting the sale of low-premium, lowest-common-denominator plans that would destroy the financial security that health plans should be offering.

Keep this in mind as you work on state single payer solutions. When we ask for waivers (federal legislation) to allow states to use existing federal funds for state single payer programs, that process would also allow other states that are in the process of crushing unions, destroying retirement security, wiping out public primary and secondary education, driving up state college tuition to unaffordable levels, and so forth, to use their freedom to wipe out health security for their own people.

That seems like too dear of a price for our fellow Americans to pay. We can avoid that simply by enacting a national single payer program - an improved Medicare for everyone.

My comment:

Of course, I agree with Dr. McCanne that gutting health programs in the name of avoiding federal mandates would be harmful. Yet, I am sympathetic with states that wish to avoid the oncoming budget crisis that will happen under the so-called "Affordable" Care Act, aka Obama-Care. Dr. McCanne's sincere wish, which he expresses with virtually every one of his usually thoughtful posts (i.e., to have an improved Medicare for all) is, as he has state above, facing insurmountable barriers. Twice in recent history (during the Clinton and Obama administrations), a national debate on health system reform took place with a public sense of urgency to get something done. Both times democrats controlled Congress and the White House, and yet neither time saw an improved Medicare for all even discussed, much less seriously considered. Dr. McCanne's wishful thinking will not make his dream a reality.

What should we do, therefore, if we, like Dr. McCanne, know that single payer health system reform is the better way forward in the US? State-based reforms are a logical strategy. Indeed, Canadian health system reform leading to their national health care financing began at the provincial level. It is, of course, true that federal legislation will be required in order for states to have a real opportunity at comprehensive and sustainable health system reform. And states, such as those which have joined the Health Care Compact effort, seem to be wanting the federal government to make such an opportunity available. Both Republicans and Democrats seem to be willing to look at this possibility. Can it be done in a way that eliminates the risk that underfunded state efforts will gut health care programs?

The best model for this enabling federal legislation could be a bill originally authored by Rep. Tierney (D Mass) which has been called "The States' Right to Innovate in Health Care Act". Rep. Tierney has not introduced this bill in the current Congress, but did so for most of the past decade. It was most recently co-sponsored in the US Senate by Sen. Bernie Sanders (I-Vermont). The bill proposes to remove all federal rules and restrictions, including those inhibiting the use of federal health care funds, from any state which can demonstrate a good faith effort to improve health system function (including cost, quality, and access). Perhaps it could be re-written today providing for each state which applies for independent health reform status to prove that its plan will be better than what could be achieved under the Affordable Care Act.

Dr. McCanne is not correct that it is necessarily the case that state-based health system reform will go bad. Combining a federal minimum standard of performance with an real opportunity for improving upon 'Obama-Care' could be the opportunity to see real change, state by state, in the American health care system.

Dr. Joe Jarvis