Robert B. Hackey

The Politics of Reform

�� The articles on individual health insurance market reform in this issue raise fundamental questions about the role of competitive markets in promoting access to health care. The decision to impose new restrictions on insurers, or conversely, not to regulate insurers’ rating and enrollment practices, rests on certain core assumptions about how the world works (Thompson 1981). In New Jersey, for example, policy makers viewed rating and enrollment reforms in the individual health insurance market as a means to reduce the number of uninsured persons (Garnick, Swartz, and Skwara 1998). This basic policy hypothesis undergirds individual insurance market reforms such as the removal of preexisting-condition clauses, limitations on underwriting practices, and the introduction of community rating. If this assumption is flawed, however, incremental reforms will be ill-equipped to address many of the most significant shortcomings of the marketplace. The articles in this issue return to the familiar “competition versus regulation” debate which dominated the health policy literature in the 1970s and 1980s. First, what lessons can be gleaned from the case studies? Should state government reject insurers’ claims of “actuarial fairness” in enrollment and rating in favor of reforms designed to protect certain groups from discrimination? What are the consequences of doing so? Second, can incremental reforms which regulate the rating and enrollment practices of insurers effectively limit discrimination against chronically ill persons or other high-risk subscribers? Or are regulatory cures worse than the disease? Finally, what are the political dynamics of reforming the individual health insurance market? Under what circumstances are reforms most likely to surface?

The politics of trauma system development

Federal and state policymakers have turned to health planning programs as a means to rationalize the delivery of health care services in the United States for over 3 decades. Early federal initiatives such as the Comprehensive Health Planning Act of 1966 and the Health Planning and Resource Development Act of 1974 were widely criticized for their inability to control costs effectively or to increase the efficiency of health services delivery. The design and implementation of the federal governments latest entry into health planning, the Trauma Care System Planning and Development Act of 1990 (Pub. L. 101-590), suggests that federal and state officials are poised to repeat the mistakes that plagued previous planning programs. The implementation of Pub. L. 101-590 illustrates the dilemmas that federal and state officials must confront in achieving effective representation and ensuring active participation in the planning process. Successful regional and statewide planning ventures must devise strategies to overcome the inherent collective action problems associated with cooperative solutions to underserved populations. Contemporary approaches to health planning, however, are based on a number of questionable assumptions. The creation of new institutional structures merely shifts the venue for existing conflicts among health providers, third-party insurers, and other participants in the health policymaking process to a new arena. In addition to examining possible alternatives for improving current trauma system planning initiatives, this paper presents a new paradigm for designing and implementing state and federal planning programs.

New wine in old bottles: certificate of need enters the 1990s.

Although state certificate-of-need (CON) programs have been the subject of intense criticism over the past decade, recent evidence suggests that CON programs may be more effective than commonly believed. While many state programs have yielded disappointing results, the CON process can also be used to achieve other important policy objectives, such as increasing access to care for the uninsured and increasing lay participation in health policy planning. In sum, rather than fading away after the termination of federal support for health planning in 1986, state CON programs are poised to assume new roles during the 1990s.

Measuring the Performance of Health Insurance Marketplaces

The case of King v Burwell refocused attention on the different paths states followed to implement the Affordable Care Act (ACA). The ACA includes 3 distinct approaches to organizing health insurance marketplaces. Fourteen states and the District of Columbia established state-based marketplaces (SBMs) that allow states to design and operate online insurance marketplaces, certify qualified health plans, and assist consumers through outreach and educational efforts. Seven states adopted state partnership marketplaces (SPMs) that delegate operation of the online website to federal officials, while retaining control over plan management, consumer assistance programs, or both. Twentynine states opted for federally facilitated marketplaces (FFMs), for which federal officials perform plan management and consumer assistance services and also operate the online marketplace. The uncertainty surrounding the US Supreme Court’s ruling in King led many supporters of the ACA to urge the states that opted for FFMs or SPMs to quickly establish SBMs to ensure that their residents

Making Sense of Medicaid Reform

Over the past decade, state governments fundamentally reshaped the delivery of health care to the poor by shifting Medicaid beneficiaries from a cost-based, fee-for-service system to a variety of managed care arrangements. The scope and rapidity of this change is striking. As recently as 1993, only 14.4 percent of the total Medicaid population was enrolled in managed care (HCFA 1999b). With encouragement from the Clinton administration, a growing number of states received comprehensive demonstration waivers permitting states to change federal Medicaid eligibility criteria, benefits, and mandate enrollment in managed care plans. As a result, the number of Medicaid beneficiaries enrolled in managed care plans more than tripled in five years, from 4.8 million in 1993 to 16.5 million in 1998, or 53.6 percent of all Medicaid enrollees (ibid.). Ten states also used Medicaid demonstration waivers to expand access to care for more than 800,000 uninsured and the “medically needy” individuals (HCFA 1999c). The rapid transformation of state Medicaid programs presents several important challenges for policy makers. The devolution of policy making to the states focuses new attention on the capacity of state health bureaucracies to design and implement cost-effective delivery systems that protect the needs of vulnerable populations. Protecting the interests of special needs populations imposes new burdens on state officials who must exercise renewed vigilance to ensure that patients in capitated health plans are not underserved. Finally, the implementation of Medicaid managed care plans creates new winners and losers among patients and providers; states need to preserve safety-net providers to serve the poor and disabled while simultaneously introducing new competitors to challenge traditional modes of financing and delivering care to program enrollees. Review Essay 751