The two pieces of state legislation, which are expected to be signed into law by the states’ respective governors, would attempt to offer medical and prescription drug benefits to uninsured children, the working poor and employees of companies that do not offer health benefits.
"States appear to be taking matters into their own hands," says Paul Fronstin, director of health research and education programs at the Employee Benefit Research Institute. "They’ve been waiting for the federal government to act and the federal government hasn’t acted."
Earlier in May the Senate failed to pass a bill supported by President Bush and passed by the House that would have allowed business and trade associations to create health insurance pools across state lines. Opponents of the bill, including AARP and groups representing people with various chronic diseases, argued it would have offered threadbare coverage by eliminating provisions that require insurance companies to pay for such screenings as mammograms, colorectal examinations and cervical cancer screenings.
The state bills differ from a new law enacted in Massachusetts in April that requires all state residents to obtain health assurance. But the reforms share a common goal of making health insurance more affordable for those who are not covered by Medicaid or their employer.
The bill in Tennessee attempts to put a price tag on how much individuals could be expected to pay for health insurance. Unlike the bills in Vermont and Massachusetts, which attempt to make coverage affordable without specifying a price tag, uninsured Tennesseans can expect to pay about $50 a month of a $150 premium split equally among the government, the individual and the employer.
As is the case with other health reforms, the initiatives represent a balancing act between offering individuals inexpensive health insurance and something that provides meaningful coverage to be worth the expense. Premiums in Massachusetts and Vermont have not yet been determined.
"States realize this situation is at a tipping point, and I think employers realize it too," says Deborah Chollet, a senior fellow at Mathematica Policy Research Inc. "Private insurance can’t survive and the employer-based system can’t survive unless something happens to resolve the problem of the uninsured and control health care costs."
Chollet noted that 15 percent to 20 percent of uninsured workers work for large employers.
The initiatives in Tennessee and Vermont made provisions to address the high costs of not managing chronic disease like diabetes and asthma, which account for a large portion of the overall health care costs and disproportionately affects the poor.
"If states can do something to encourage the whole underlying cost drivers to be reduced, you’d have savings to the system. You’d have savings for everybody," says Enrique Martinez-Vidal, deputy director of State Coverage Initiatives, a nonpartisan policy group.
Large employers, nearly all of whom already provide coverage to employees, share much of the costs associated with providing health care to uninsured Americans.
"Those costs are being spread over the system, primarily as a cost shift into commercial premiums," Martinez-Vidal says. "If you reduce the number of uninsured, that should reflect in the long term in lower premiums for everyone.