The Washington Post reports today speculation that health care reformers will refocus their efforts, turning from state governments to DC. (Hat tip to the State Policy Network.) The fizzling of the Schwarzenegger plan tipped the balance.
The demise of California's attempt at comprehensive health-care reform this week means that advocates of overhauling the health-care system will turn their focus back to Washington, several experts said yesterday, as an increasingly tough budget climate raises new questions about whether states can go it alone.
It turns out that money matters.
"The failure of California's plan pushes the focus about expanding coverage even more strongly towards Washington," said Paul B. Ginsburg of the Center for Studying Health System Change, a nonpartisan policy-research group. "I've never believed that states would be able to go very far on their own because of their fiscal limitations. A state in an average year could be able to afford something, but once they get into a recession, they get into fiscal trouble."
Who knew? The signature reform effort - the Massachusetts model - underscores the risk.
So far, Massachusetts -- which began with an estimated 400,000 to 600,000 uninsured people, less than 10 percent of its population -- is the furthest along among states trying to expand coverage.
Since July, Massachusetts has required almost all residents to obtain health insurance or face a penalty of as much as $912, exempting only those deemed unable to afford coverage. More than 300,000 people had signed up for coverage as of Jan. 1, according to the Commonwealth Health Insurance Connector Authority, the new state entity implementing the law. But the program's long-term cost remains a concern, with state
budget experts projecting a shortfall of as much as $147 million this fiscal year.
Wednesday's Wall Street Journal carried this "political autopsy" of the Schwarzenegger plan.
The California legislature is probably the most liberal this side of Vermont, and even Democrats refused to become shock troops for this latest liberal experiment. ...
Like collapses in Illinois, Wisconsin and Pennsylvania, this one crumpled because of the costs, which are always much higher than anticipated. ...
An independent analysis confirmed the plan would be far more expensive than proponents admitted. Even under the most favorable assumptions, spending would outpace revenue by $354 million after two years, and likely $3.9 billion or more.
With the economy slowing, state governments, many of which are already facing budget shortfalls, are wise not to gamble on new and expanded experiments in entitlement spending.
UPDATE Typo in last sentence fixed: "wise not to gamble."
