High court to rule on power of states to reform health care


WASHINGTON -- Just as President Clinton was urging the states yesterday to do more on health care reform to fill the void left by Congress' inaction, the Supreme Court voted to rule on the power of states -- including Maryland -- to act on that issue.

It was only a coincidence that the court disclosed its action minutes after Mr. Clinton spoke at a White House news conference. But the coincidence served to emphasize the importance of the states' role so long as Congress remains stuck in controversy over new federal laws.

Mr. Clinton clearly showed frustration over the congressional deadlock that blocked any action this year, but also chose to talk positively about what his administration had done to persuade states to move "on their own" to provide "universal coverage and health care costs control."

He said he had given "state after state" waivers from federal regulations so they could act, and said he would be willing to discuss doing more to free the states to act.

New York case

One of the biggest states, New York, is involved in the new case the Supreme Court voted to review. The state told the justices that the case provides a major test of state authority to "contain hospital costs so as to make health care affordable while providing hospitals with necessary revenue to provide access to quality care."

The impact of the case could be very broad, potentially affecting Maryland and any other state that attempts to control hospital rates, when those rates apply to patients with health plans protected by federal law, as many are.

At issue in the case are New York state laws adopted in 1988 and 1992 that set up a method of regulating hospital charges in order to limit costs, generate money to reimburse hospitals for treating patients who are poor or without insurance, and spread the insurance cost more widely.

The laws also are designed to make health care insurance offered by Blue Cross and Blue Shield more competitive, to encourage them to maintain broad coverage through open enrollment.

Those laws, however, have been struck down by a federal appeals court.

In a ruling in 1993, the 2nd U.S. Circuit Court of Appeals in New York City ruled that the New York laws are invalid because they would have some effect on the benefits provided by employee health plans -- benefits that are protected from state change by federal-employee benefit law.

Joined by the Clinton administration, New York, the state's Hospital Association, and the New York "Blues" took the dispute to the Supreme Court.

The court is expected to hold a hearing on the case early next year, and decide it before next summer.

One of six appeals

The health care case was one of six appeals the court agreed yesterday to hear as it accepted more work for its sparse decision docket.

In another case, the court said it would decide whether motorists or vehicle passengers who are hurt in highway accidents, or the survivors of people killed in such crashes, may sue manufacturers for failing to install anti-locking brakes in cars or trucks.

Under federal regulations, the manufacturers have the option of installing anti-locking systems on their vehicles, but they are not required to do so.

A lower federal court, seizing on that optional approach, said it leaves state courts free to consider accident claims based on state law.

Manufacturers of trucks without anti-lock brakes were sued after two accidents in Georgia, in which tractor-trailers jackknifed when their brakes locked.

The manufacturers and their legal allies told the Supreme Court that the lower-court ruling threatens makers of many kinds of consumer goods who have obeyed federal safety rules.

In another case, involving a prison inmate in Hawaii who swore at a guard for conducting a strip search, the court agreed to decide whether prison inmates have a constitutional right to avoid solitary or segregation if prison officials do not follow their own rules in imposing that punishment.

And, in a California case, the court said it would consider a constitutional challenge to state power that forces newcomers who need welfare to wait a minimum period before they are eligible for full benefits.

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