To state the obvious, the debate over health care reform has underscored some stark tensions in the country. 

There are people who protested when a single-payer approach was taken off the table and people who pushed hard for a government-run health plan to be established to compete with private insurers.

These groups stand in sharp contrast to another set of people who argue that Democrats’ proposed individual mandate is unconstitutional and state lawmakers who are pushing legislation and other initiatives aimed at letting states opt out of certain elements of federal health care reform proposals and some ideas that were never seriously on the table.

In Sacramento last month, Sen. Tony Strickland (R-Moorpark) put forward the California Healthcare Protection Act, a proposed constitutional amendment that would raise the bar for provisions of Democratic reform bills to take effect in California.  Under the proposed amendment, voter approval would be required before any of the provisions listed below could take effect in the state:

• A requirement that individuals have health insurance coverage;
• Regulations that require insurers to offer insurance coverage to people without regard to age or pre-existing conditions;
• Requirements that employers provide insurance or contribute to the cost of workers’ health insurance;
• A government-run health plan that competes with private insurers; and
• A single-payer health plan.

There’s some debate over the constitutionality of Strickland’s proposal — not to mention its prospects in the California Legislature with its strong Democratic majorities — but it is an idea that has gained currency in states nationwide. 

A December 2009 Web memo from the Heritage Foundation approaches the issue of states’ role in health care reform another way, raising the possibility that states might opt out of Medicaid entirely if Democratic reform proposals are enacted. 

The Heritage Foundation’s Dennis Smith and Edmund Haislmaier write, “The reasons states would seriously consider opting out of Medicaid are simple: They would no longer be able to afford Medicaid, and it is politically infeasible to have one-quarter of state budgets controlled by Washington rather than the state capitol.”

Gov. Arnold Schwarzenegger (R) has criticized federal requirements for Medicaid and pushed HHS to give the state more flexibility with the program, but he hasn’t gone so far as to propose withdrawing from it, perhaps because of the massive loss of federal funds that such a move would entail.

Conversely, Schwarzenegger has said that absent more federal funding, the state’s budget problems might force it to entirely eliminate In-Home Supportive Services and Healthy Families, California’s Children’s Health Insurance Program. 

In response, California Budget Project Director Jean Ross said, “If you look at the governor’s proposals for health and human services programs, we will lose $5 billion in federal funds but only save $2 billion in state funding. That’s simply bad math.”

However unlikely these scenarios might appear, they do underscore the pressure that health care spending is putting on state budgets and force serious discussions of states’ options.

News From the Hill

• According to an AP survey, at least nine of the 39 Democrats who voted against the House reform bill (HR 3962) passed in November are now undecided or withholding judgment until they see President Obama‘s revised proposal, AP/Google reports. All of the lawmakers are either freshman Democrats or on the verge of retiring (Babington, AP/Google, 3/2).
• On Feb. 23, the House Progressive Caucus endorsed Obama‘s health reform proposal, stating that “we may very well have a health care bill we can be proud of,” CQ Today reports (Epstein, CQ Today, 2/23).
• On Feb. 22, Sen. Ben Nelson (D-Neb.) said he was “pleased” that the so-called “Cornhusker Kickback” was excluded from Obama’s health reform proposal and that the provision would be extended to all states, The Hill’s “Blog Briefing Room” reports. According to “Blog Briefing Room,” the provision’s removal might help attract “wary House Democrats” to support the president’s proposal (Fabian, Blog Briefing Room, The Hill, 2/22).
• Contributions to Rep. Joseph Cao (R-La.) have fallen by nearly 40% since he voted to support the House health care reform bill last year, the AP/Atlanta Journal-Constitution reports. Cao raised less than $250,000 in the three months surrounding the vote, compared with $400,000 in the previous quarter (Evans, AP/Atlanta Journal-Constitution, 2/24).

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Road to Reform The Health Law