US States Move Ahead With Health Plans

25 September 1994

With the US Congress unable to pass the sweeping health care reform package that President Clinton and many others had counted on, the states have once again moved to the fore in innovation on this front.

California, Florida and Texas have moved ahead, enrolling many residents in insurance alliances; 20 more states are experimenting with them. Nearly all states have tightened controls on insurers, requiring them to sell cover to small businesses and limiting differences in rates. The biggest curb on what states can do is the 1974 federal Employee Retirement Income Security Act, which bars them from interfering with, regulating or taxing the health plans of firms which self-insure.

The Administration has also given waiver approval to a Florida Medicaid plan to give health cover to 1.1 million uninsured people. Governor Lawton Chiles says it will save $3.2 billion for Medicaid over five years by enrolling all recipients in a managed care program, but it has been attacked by Republican opponent (and ex-president's son) Jeb Bush, and was blocked twice earlier. It still needs state legislature approval, and the government does not plan another special session.

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