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Health care reform fading at state level


After Congress killed the Clinton administration's proposals to revamp the U.S. health care system, ambitious state plans to extend health insurance to more people took on importance as possible models for the nation.

But nearly a year later, most of those plans are dead or stalled as the states turn their attention to cutting budget deficits. Meanwhile, the number of uninsured people is growing quickly.

In Florida, for example, Democratic Gov. Lawton Chiles had proposed in 1992 that employers be required to provide health insurance for their workers. Under pressure from large self-insured employers, he quickly withdrew that plan.

Since then, Republicans, who now have a majority in the Florida Senate, have blocked another of the governor's plans: to transfer $3.2 billion in federal Medicaid money over five years to a managed health care program that Mr. Chiles says will cover 40 percent of the state's 2.8 million uninsured residents.

Florida was one of six states -- along with Hawaii, Massachusetts, Minnesota, Oregon and Washington -- that had enacted formal commitments to universal health coverage. None of these states, or dozens of others that had considered similar provisions before the Clinton plan collapsed, has moved forward with them.

"There were high hopes last year that states could still achieve universal health coverage and show the way for the nation," said Deborah Chollet, a Washington-based health economist who has studied these trends for the National Institute for Health Care Management, a Blue Cross-sponsored group.

"But now, after the watershed conservative gains in Congress and state legislatures, these hopes have been deflated," she said.

Susan Laudicina, research director for the national Blue Cross & Blue Shield Association in Washington, said: "The till is empty. The states that promised much have had to swallow hard and say, 'We bit off too much.' "

Recent polls show that the public is still intensely concerned about health care. But with money tight, most states are "focusing on things they can achieve right now," said Joy Wilson, a health care specialist at the National Conference of State Legislatures. Large-scale changes in health care are not among them.

Faced with budget restraints, New York and other states have moved in a direction opposite to that of the Clinton plan, slashing Medicaid costs -- by more than $1 billion in New York. Attempts to force tougher insurance requirements on employers have also withered.

Oregon and Washington had passed laws in 1989 and 1993 requiring employers to provide workers with insurance. Oregon has delayed enforcement of the law, and the Republicans who took control of the legislature have called for its repeal.

Washington revoked its law May 9 after it realized that its plan went beyond a federal law that prohibits a state from regulating health care coverage that is provided to employees by self-insured businesses.

"Congress caved in to big business," Gov. Mike Lowry said as he signed the repeal bill.

As states have tried to come up with alternative plans, the number of people without insurance has continued to grow.

Although a few states have been able to expand their basic Medicaid programs for low-income people, the number of uninsured people is rising by 1.1 million annually, to 40.9 million in early 1994, according to the Employee Benefit Research Institute, a nonprofit group in Washington.

Employers added 2 million workers to the insured rolls as the economy picked up last year, but 4.5 million spouses and children were dropped, mostly by small businesses, for a net loss under private insurance of more than 2.5 million.

"Early in the summer of 1994, we thought we had reasonable certainty that some kind of bill approaching universal health coverage would have been passed by Congress," said Doug Cook, director of the Florida Agency for Health Care Administration. "Now in the brief span of a year, we have moved to a 180-degree turn and we are marching in the other direction."

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