States Will Have to Lead Congress on Health Financing Reform

Increasing attempts by states to overhaul their health care financing systems, a higher profile for the impact of a lack of medical insurance, and change in the political winds may combine to change substantially how Americans get their medical care, according to federal mental health advocates.

The view that major changes in the way the nation finances health care are likely to come sooner rather than later was voiced by mental health advocates who gathered for the annual Washington, D.C., policy meeting of the Bazelon Center for Mental Health Law in April. It was widely agreed that the states will continue to lead the effort for the next several years.

“We're going to look to the states, unhappily, to begin the move toward universal coverage because we won't be able to do it all in 2009,” said Rep. Pete Stark (D-Calif.) about his disappointment that Congress will likely wait to see the outcome of state efforts to overhaul health care financing. “Politically that is a bigger bite than [Congress] can chew.”

Once several states follow Massachusetts and Vermont and enact comprehensive health care financing reform, the federal government will be able to attempt a national program, he said.

Stark and other speakers at the annual event said such incremental change will be necessary to convince Americans that change for the better is possible and that all Americans—not just prisoners—should have a constitutional right to health care. If the public buys into the idea of health care rights and that everyone should pay what they are able for access to care, then a universal U.S. health care system could be established within five years.

Stark said there already has been some progress toward such a system, as evidenced by recent efforts of unions and health insurers to work together to expand coverage.

“I wouldn't have been able to predict that happening a few years ago,” he said.

Diane Rowland, executive vice president of the Henry J. Kaiser Family Foundation, agreed that state health care financing reform efforts will continue to outpace reform at the national level, although advocates should push for both.

The mental health advocates said much emphasis has rightly been placed on what plans the next president will have for health care financing, but they acknowledged the importance of being active in shaping the expectations for those plans. Rowland also encouraged advocates to work actively on health reform proposals now, so that well thought out alternatives could be considered regardless of who the next president is.

“What you ideally want is to have the ideas and the framework ready for Congress to move on when they come back in January after the elections; you don't want to then negotiate on what provisions should be there,” Rowland said.

Health care access for people with mental illness may improve under the Democratic candidates' health reform proposals, Rowland said, although mental health advocates need to be wary of psychiatric care “being squeezed out” in favor of expanded access to other types of health care. The health care plan from Republican candidate Sen. John McCain has drawn much more concern from advocates, who are troubled that his emphasis on Americans buying insurance on the individual market would backfire because many health plans would exclude people with a range of preexisting conditions.

Some advocates have raised concerns that the election of a Republican administration would freeze reform of mental health care financing, according to Howard Goldman, M.D., Ph.D., a professor of psychiatry at the University of Maryland and editor of the APA journal PsychiatricServices. However, he pointed out, many recommendations of President Jimmy Carter's reform panel—the Carter Commission on Mental Health on which Goldman worked—were implemented under Republican President Ronald Reagan and a Democratic-controlled Congress.

“Advocates were able to take the blue-print provided by the Carter commission and turn it into changes in laws and regulations that have had a profound effect on how mental health services have been delivered,” Goldman said.

Rowland and others also encouraged advocates at the April meeting to continue to push for current reforms, such as mental health insurance parity, even while trying for more ambitious financing overhauls. Specific areas of concern in the financing of mental health care include recently proposed regulations to cut federal funding for a variety of services long provided under Medicaid, including many that serve people with mental illness.

“Too often we have lost progress while we have waited for health reform, and then that health reform hasn't happened,” Rowland said.

Jeffrey Crowley, a senior research scholar at the Health Policy Institute at Georgetown University, called for advocates to support legislation (HR 5613) to place a hold on the Bush administration's proposed administrative Medicaid cuts (Psychiatric News, May 2). A successful effort to keep Medicaid strong for the populations it already serves may allow for its future expansion as a way to provide health care coverage to much larger segments of the U.S. population.

“This creates opportunities that we will need to seize to expand coverage” in the future, Crowley said. ▪