Wednesday, August 8, 2012

Next steps in health-care showdown will be states' opportunity to shine.

Legislative efforts in Minnesota during the 1975-76 term were similar
to proposals made in the Affordable Care Act.

Attorney and former Minnesota legislator

One result of the United States Supreme Court’s decision to largely uphold the Affordable Care Act (ACA) is already coming into play.

A thoughtful discussion of federalism and the role of the states in providing healthcare for millions of low-income Americans is under way in all 50 states. This discussion will likely continue not only through the presidential election, but through the next year and a half as Congress and each one of the states address certain Medicaid aspects of the ACA decision and its scheduled implementation in 2014.

In 1932, Justice Brandeis famously said that a “happy incident” of federalism was that the states could act as laboratories of democracy. The next 18 months will present these laboratories with the challenge and opportunity to exercise their creative powers in a very visible and important experiment.

Several governors, including Rick Perry of Texas and Mark Dayton of Minnesota, have expressed their intentions. Perry said Texas should not participate in the expanded Medicaid program. Dayton said Minnesota should. As the New York Times recently pointed out, many governors are now unsure what to do.

But even for those states whose governor has made a decision, such gubernatorial pronouncements do not end the matter. 50 state legislatures will also be evaluating evidence, analyzing options, and designing programs that will in effect be experiments in their state’s laboratory. The U.S. Congress will almost assuredly also participate in the discussions and may change some fiscal ground rules for the expanded Medicaid program. The Congressional Budget Office (CBO) recently weighed in on the discussion by releasing its estimate of the “probabilities of different outcomes,” and concluded the number of uninsured people in the country will likely increase from earlier projections. The CBO also acknowledged it is impossible to know what the states will do. By the time the Medicaid change is to go into effect 2014, all this governmental work will likely produce several different approaches by the states to the Medicaid program.

My past experience as a legislator tells me that state legislatures often work in ways that seem (and sometimes are) strange. But these sometime strange methods can lead to ideas that actually work to help solve complex problems.

Because one size rarely fits all, these different methods may produce valuable options for the country to help address a difficult health care issue. For example, in 1975-76 the legislature in Minnesota carefully reviewed a proposal from Governor Wendell Anderson for a catastrophic health insurance program to protect families from financial ruin. With a strong push from Speaker of the House Martin Sabo, the House then developed a comprehensive health care package. The legislation was remarkably similar to the so called “public option” that was proposed and ultimately dropped in the tortuous negotiations that led to the Affordable Care Act. The 1975-76 legislation dealt with preexisting health conditions, cost containment, and insurance for personal catastrophic health issues. The legal doctrine of federal preemption caused the legislation to be cut back before passage, but a bill was ultimately passed and signed into law that moved the health care delivery system forward by providing a sound mechanism to help “insure the uninsurable.” A number of the provisions of the 1975-76 state legislation remain in place in Minnesota.

The next 18 months will involve both state and federal action regarding the delivery of healthcare. This will not be a neat and tidy legislative process at either level of government, but nothing related to Medicaid has ever been neat and tidy. Still, the process has the potential to harness innovation. The current uncertainty is both a challenge and an opportunity for the states to show how well their laboratories work, and for federalism to creatively deal with the country’s problematic healthcare delivery system for millions of low-income Americans.


Tom Berg is an attorney in Minneapolis who was a member of the Minnesota Legislature in the 1970s. He later served as the U. S. attorney for the district of Minnesota. He is the author of Minnesota’s Miracle: Learning From The Government That Worked, which will be out in October.

"Minnesota’s Miracle makes this point clear: ‘While human nature may give rise to factions and political parties, it also allows friendship and commonality to grow and foster some level of goodwill and cooperation.’ That is Berg’s summary of the ‘Minnesota Miracle’ and it can be ours once again."
—David Durenberger

"In today’s divisive political arena, we have a lot to learn from the legislators who worked together across the aisle in Minnesota. For a glimpse into the inner workings of Minnesota’s government, read this book."
—Walter Mondale

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