Wednesday, February 9, 2011

State Experimentation

I have a hunch that the next decade will turn into a period in which States will be granted a great deal of discretion to implement the ACA and any modifications in the ways they think best. There are such opportunities in the ACA such as section 1332 waivers, but I suspect any state with a coherent plan will get a strong listen from Washington. Most people likely think this means pared-down proposals, with a goal of expanding coverage via catastrophic insurance, but the most aggressive early experimenter appears to be Vermont, who wants to create a single-payer system.

Some key factors across states that will determine the type of experimentation they may attempt include:
  • relative intensity of the current system, especially in Medicare. There is tremendous variation if per capita Medicare expenditures across the nation and high spender areas will have fewer options because providers are used to doing more and being paid more; it will be easier if you are in a 'low intensity practice pattern state'
  • relative economic vitality of the state
  • current rate of uninsurance. Massachusetts is around 2.5% uninsured, while Texas is around 25%
  • Health outcomes/population health
  • Medicaid share rate (what proportion of Medicaid costs are paid by the federal government; poorer states get more federal subsidy)
  • Politics of the state
Should be interesting to watch what happens in Vermont and whether other states will be emboldened to search for a grand solution. (h/t for links @ezraklein)

Update: Aaron Carrol also writing about Vermont.


  1. Don
    not that i can weight each of your bullets, but as I thought about it, while everything you scribe is correct, they are all subservient to political boldness (not the same as politics of state).

    my guess would be, take a chris christie for example--regardless of % uninsured, intensity, etc.--and only look at one thing: "do we have a budget (read: healthcare) problem? If the answer is yes, then lets move to step B.

    Perhaps for 80% of states, boldness, creativity, action, etc., are going to be more a factor in moving forward than any one of the above variables. The executive and DOH commish will drive agenda regardless of varying contributions of bullets above.


  2. Brad
    Good point. I hope that the boldness of Vermont will embolden other states to try other things. If we are going to have true experimentation, we also need some states saying we want universal but with catastrophic cover only. In NC for example, we have a Democratic Gov and a Republican controlled General Assembly. In one sense a set up for a compromise that would be politically powerful if they could ever agree to one. But, it seems unlikely they would be willing to work together.