Access to Health Care:

States Respond to Growing Crisis

HRD-92-70: Published: Jun 16, 1992. Publicly Released: Jul 13, 1992.

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Pursuant to a congressional request, GAO provided information on state initiatives concerning health care access and affordability, and federal barriers which limit states' progress toward achieving universal health care.

GAO found that: (1) states have moved decisively to devise plans to expand access to health insurance and control increases in health costs, but have been hindered by the restrictions of the Employee Retirement Income Security Act of 1974 (ERISA), which prevents states from exercising full control over all employer-provided insurance; (2) working within ERISA constraints to achieve universal health coverage, some states have created "play or pay" systems, which hinge on the state's power to tax, but implementation of these systems has been delayed because the outcome of laws for implementing these systems is uncertain; (3) other state programs have targeted specific uninsured groups, such as low-income children and adults, but have had limited success because of budgetary constraints; (4) Hawaii has the lowest uninsured rate of all states, largely due to a previously enacted law which exempts Hawaii from the ERISA preemption provision; (5) many states continue to develop proposals to achieve universal access to health care; (6) most states have also adopted measures to help people with high-cost health conditions and small business owners and employees obtain affordable health insurance, but these measures have had only a modest effect; and (7) although most states have focused on expanding access to coverage, some have concentrated on controlling increasing costs through changes in methods for reimbursing providers.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: States are no longer undertaking the types of comprehensive health care reform that would require ERISA exemptions. Additionally, Congress is considering taking an alternate approach of strengthening federal standards for employer-based health plans under ERISA rather than granting states more authority to regulate employer-based health plans.

    Matter: If Congress wants to give states more flexibility to develop comprehensive reforms, it should consider whether to amend ERISA so that the Department of Labor can give states a limited waiver from the ERISA preemption clause in order to develop innovative approaches to employer-based health insurance. Congress could define minimum standards--governing such factors as benefits packages, extent of coverage, and terms under which the waiver might be revoked--that a state must meet to receive and maintain such a waiver.


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