- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -

Outside the Beltway: Utah's Successes Highlight Federalism's Benefits

Posted By Kathryn Nix On April 19, 2010 @ 3:00 pm In Obamacare | Comments Disabled

The Utah State Capitol Building in Salt Lake City [1]

In the past year, the Congressional health care battle has usurped much of the public discourse on health care reform.  In the mean time, Utah has quietly begun implementing its own version of reform, moving its health care system in a more patient-centered, consumer-driven direction.  In a recent paper [2], Heritage analyst Ed Haislmaier outlines the obstacles Utah has overcome to achieving its objectives of giving “employers, particularly smaller firms, an easier way to offer health benefits to their workers and to provide workers and their families with more coverage choices.”

Haislmaier explains how the Utah reforms are intended to secure the following patient-centered benefits for its residents [2]:

  • More Employers Offering Coverage: Utah’s health care reform centers on giving employers the new option of offering health benefits to their workers on a defined contribution basis.  Haislmaier explains [2] that “…the availability of a defined contribution option could eventually lead to almost every employer in the state – even small, start-up firms – offering some type of coverage to its workers.”
  • Fewer Uninsured: Creating new coverage options for both employers and employees should enable more workers and their families to gain coverage and to keep their coverage when changing jobs, thus reducing the number of uninsured.  States can then better focus on providing subsidies where needed, such as for low-income workers or the temporarily unemployed, to ensure that residents can maintain their coverage.
  • True Coverage Portability: “Over time, if more employers offer health benefits on a defined contribution basis, then increasing numbers of workers will be able to take their preferred coverage with them from job to job, thus creating true health insurance portability.”
  • More Choice, Competition, and Innovation: “Often, the best way to increase sales is to offer products that better meet consumer needs and preferences. In health insurance, a defined contribution market should stimulate insurers to experiment by offering new and innovative benefit packages and plan designs.”
  • Better Value for Patients and Consumers: “By making the individual the decision maker, a defined contribution market encourages insurers to experiment by offering plans with features that individuals might value, but that are not necessarily as attractive to employers.”

Other states, and the nation as a whole, should take as a model not only Utah’s consumer-centered policy design for health reform, but also the success of Utah’s bottom-up, consensus-building approach to the reform process itself—which resulted in overwhelming, bi-partisan approval of the legislation by the state’s legislature.

In contrast, the recent federal health care legislation was not only enacted by the barest of partisan majorities in the face of widespread public opposition, it was also rushed through Congress to meet artificial political deadlines, consists of a grab-bag of (mostly bad) policy proposals stitched together by Congressional leaders who didn’t understand what they were really doing, and then further amended and re-amended in closed-door meetings.  The resulting legislation will be massively disruptive and destabilizing for patients, consumers, employers, insurers, doctors, hospitals and state officials, is fraught with numerous unintended consequences [3] (both large and small), was sloppily drafted, is completely unaffordable, and includes major provisions that are literally unworkable in practice.

The right way to approach health care reform is systematically and incrementally, taking time to ensure that it is done right.  This is exactly what Utah did allowing state lawmakers to make adjustments along the way to get the design right.

Moreover, reforming health care at the state level means that reforms can be tailored to the specific needs, circumstances and preferences of each state.  While other states can certainly replicate Utah’s basic approach and objectives, they will need to tailor many of the specific elements to meet their own requirements and situations.

In short, systematically and incrementally reforming health care at the state level increases the likelihood of success and public satisfaction with the results while minimizing the risks of creating unintended negative consequences.  That is an important lesson, not only for lawmakers in other states, but also for the next Congress which will face the task of repealing its predecessor’s legislative monstrosity and then devising a better set of more limited, and more carefully crafted, federal health care reforms as a replacement.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/04/19/outside-the-beltway-utahs-successes-highlight-federalisms-benefits/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/utahcapitol100311.jpg

[2] In a recent paper: http://www.heritage.org/Research/Reports/2010/04/State-Health-Care-Reform-An-Update-on-Utahs-Reform

[3] unintended consequences: http://www.foundry.org/tag/side-effects

Copyright © 2011 The Heritage Foundation. All rights reserved.