The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

California Health Care Reform: Sound and Fury Awaiting Preemption?

Posted by Alan on November 5, 2007


A lot of blood, sweat, tears and money has been spent on the health care reform debate in California. Hordes of lobbyists, armies of state staffers, thousands of citizens, several lawmakers and the Governor have all labored long and hard to create a package of reforms which can garner enough agreement to become law. The work continues and will continue for some time.

Some pundits think nothing will come from all this. The differences are too wide, the costs are too great and the parties are too polarized to find common ground. Others (and I’m among them) think that the differences are overstated, the financing will be decided by voters next November and the political impetus to accomplish something will overcome the politics of polarization. 

As I watch the presidential campaign unfold, however, I’m wondering how much it all matters. Because whatever California accomplishes on th health care reform front is likely to be pre-empted before they can have much impact.

Consider:
If the Governor and Legislative Leaders fashion a workable compromise in the next several weeks most of its provisions will likely be contingent on approval of an initiative on the November 2008 ballot to finance the reforms. As a practical matter this means few of its provisions will likely to kick in before 2010 — and some will take a year or two more to implement.

On that same ballot we’ll elect a new president. Whoever wins will have spent considerable time pledging to improve the nation’s health care system. While there are some differences among the candidates, the proposals tend to break along party lines. Democrats call for mandating health care insurance for all Americans, although none of the major candidates support a single payer system. Republicans focus more on market-based solutions that do not require mandates. (Wharton School’s site has a good summary of how health care reform is shaping up in the presidential campaign.) 

The health care reform debate in Washington will be as vociferous, complicated and passionate as it has been in California. Nothing will pass immediately, but there will be tremendous pressure to enact something before the 2010 Congressional elections. After all, with unions and big business standing side-by-side calling for change, health care reform is rapidly becoming a non-partisan issue. Calls for reform wil grow louder if several states pass markedly different reform plans (patchwork approaches to national problems aren’t favored in this country). And if several of those state efforts fall to ERISA challenges, the outcry for a national solution will be deafening.

So let’s assume the new President signs a national health care reform package before November 2010. From a practical standpoint, this means implementation of a national health care reform package would begin in 2012, give or take a few months. Since federal law trumps state law, much of what’s in place in California, Massachusetts, Vermont and elsewhere will be preempted. After all the debate and hard work, most of what was built here will be swept away.

The impact on state’s like California is almost Shakespearian  (“Out, out, brief candle! Life’s but a walking shadow, a poor player that struts and frets his hour upon the stage, and then is heard no more. It is a tale told by an idiot, full of sound and fury, signifying nothing. Macbeth Act 5, scene 5).

OK, a bit overly dramatic (but hey, the classics class up any blog). And passage of a California solution could still have great value. It would serve as a model for national reforms, add pressure for federal action, and be a safety net in the event of federal inaction.

So we’ll continue to trudge along. Debating passionately the nuances of the mandated Medical Loss Ratio provision, what affordability looks like and the fairness of mandating coverage. We all need some sound and fury in our lives. And besides, “… there’s nothing either good or bad, but thinking makes it so.” Hamlet, Act 2, scene 2).

2 Responses to “California Health Care Reform: Sound and Fury Awaiting Preemption?”

  1. hey i can agree with matt, i can see alot of good points brought out in this topic, california is a huge state, and regulations are always changing in the huge areas. Good topic guys

  2. Matt said

    I don’t understand why some states don’t even acknowledge the Health Care Problem by trying to find a solution of their own. All states are different and could very well use a different Health Care Reform set up to make a positive change. As Alan stated, “Since federal law trumps state law, much of what’s in place in California, Massachusetts, Vermont and elsewhere will be preempted. After all the debate and hard work, most of what was built here will be swept away.”

    Why are these 3 states the only ones taking initiative on Health Care Reform?
    Do the other states assume the Federal Government is taking care of it?
    Are the other states hurting California, Massachusetts, Vermont?

    I feel like all states should take responsibility for themselves and not have the federal government intervene. If we can’t fix the problem with the state government, how can we possibly fix it with the federal government?

    And when has the federal government’s help ever saved money?

    I am new to the insurance business so if some of the questions don’t make sense or can be answered easily please understand. Thanks.

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