Academic journal article Political Research Quarterly

Health Reform in the States: A Model of State Small Group Health Insurance Market Reforms

Academic journal article Political Research Quarterly

Health Reform in the States: A Model of State Small Group Health Insurance Market Reforms

Article excerpt

For the fourth time since World War 11, national policymakers, in 1992, engaged in a major debate over reforming and regulating the U.S. health care system. One of the most debated issues involved the problem of the uninsured. While Congress and the President garnered national attention debating the issue, several states were already dealing with the issue of health insurance and their own uninsurance problems. Today, in the absence of activity at the federal level, the states have become the de facto leaders in health care reform. Since 1990, forty-six states have adopted small group insurance market reforms. Such reforms are designed to improve the availability of insurance coverage for employees of small firms, who make up the largest segment of the uninsured in the states. This article examines the factors that account for the sudden popularity of small group insurance market reforms, and the factors or characteristics of the states that explain the extent of policies adopted. To examine these questions, a pooled cross-sectional time series model is employed. The results indicate the factors contributing to the adoption of small group health insurance market reforms are a state's regulatory environment, a state's regulatory philosophy, state fiscal health, problem severity, and the activities of neighboring states. Implications of the findings are also discussed.

In the absence of a coherent national health insurance policy, the American states have become the de facto leaders in health insurance reform. The states have always been important sites for the development of innovative solutions to the nation's health care problems (Weissert and Weissert 1996). State health insurance reforms provide an excellent venue for studying the extent of state policy adoptions and the spatial and temporal variation in policy adoptions.

While issues related to health care reform have always been on the public policy agenda, the 1990s saw this issue become the subject of increasing debate. One of the most debated issues in this area is the problem of the uninsured. An estimated 42 million Americans have no insurance at all and another 22 million have inadequate insurance (Blumberg and Liska 1996). A research report released by the American Hospital Association projected that the uninsured figure will be 46 million persons by the year 2002 (Reagan 1999).

Several explanations have been given as to why the U.S. fails to adopt comprehensive, health insurance reform. At the national level, institutions and interest groups dominate health care politics. Steinmo and Watts (1995) argued that the U.S. does not have a national insurance system because American political institutions are biased against this type of reform. Martin (1995) argues that institutional efforts by large businesses in the U.S. helped to defeat national health care reform. Weissert and Weissert (1996) argue that national health insurance has not been adopted in the U.S. because, in part, of the differences between the two political parties on the role government should play in this arena. However, while national health insurance reform is a hotly debated and researched topic, the states have quietly passed health insurance reform without much notice or explanation.

Health insurance regulation by state authorities merits increased analytical attention as two trends continue to unfold in the U.S. First, the failure of federal health reform has left the states as the leaders in the reform movement. Second, with the election of a Republican-controlled Congress, the federal devolution of health policies is a trend that is likely to continue, and the role of state governments will continue to increase and be enhanced. States have been the centers of activism and innovation in domestic affairs in conservative periods throughout U.S. history (Nathan 1995). This trend will likely continue and it appears that states are finding new and politically popular ways to deal with uninsurance without creating massive spending programs. …

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