Massachusetts Congressman John Tierney has proposed federal legislation entitled "States' Right to Innovate in Health Care Act of 2001," which is an important piece of legislation that lays the regulatory groundwork and funding for states like Massachusetts to develop and implement comprehensive reforms of their health care delivery system, specifically, to create a single payer system. Such an innovative approach has been filed in our state by the MNA and MASSCARE, a coalition of more than 70 organizations. This Massachusetts Health Care Trust Bill would replace our patchwork of inefficient and ineffective private insurance providers with a state-funded trust. This single payer approach would provide access to health care for all, provide it at comparable cost and provide quality not available in our current system.

Below is a summary of Congressman Tierney's bill provided by his staff.

The challenge

An estimated 43 million Americans, a majority of whom are working Americans and the elderly, do not have health insurance. Although this number reflects a minuscule decrease in the number of uninsured for the first time in more than a decade, 43 million people without access to affordable health care is 43 million people too many. Furthermore, holes in the existent piecemeal health system are expanding in such a manner that even insured individuals suffer from a significantly diminished quality of care. As a result, the health care needs of many insured individuals go unmet.

Because health costs are outpacing inflation, employers are reducing benefits or even dropping coverage altogether. The introduction of "market medicine" through managed care, which was supposed to save us from this crisis, not only failed to solve the problem, but also created even more difficulties. Moreover, market forces, far from injecting efficiency into the system, have increased administrative overhead, which at roughly 25 cents of every health dollar, already dwarfs the overhead cost of other industrialized nations. According to every one of these indicators, our jury-rigged system of health care is heading for collapse, and we have run short on models to take its place.

The solution

While national reform is the eventual goal, we cannot afford to wait before testing out our new ideas in the meantime. Many states, confronted with the ever-growing burden health care places on their budgets, have developed innovative new solutions. However, many have also run into obstacles with the patchwork of federal programs and regulations that already exist.

The States' Right to Innovate in Health Care Act would encourage states to develop their own systems of universal care by clearing away the underbrush of federal regulations and providing assistance, through implementation and planning grants, to help states transition to universal care. SRIHC would require that the benefits and protections of federally funded health programs remain fully intact even under the waivers.

Through this legislation, as many as 10 states would receive grants to assist with the planning costs. If a plan provided care for all state residents and provided a standard package of benefits (expanded substantially beyond today's benefits) while controlling costs, a state would then be eligible for a grant to help pay for transition costs, such as development of a uniform information system, and enrolling all eligibles. Studies have shown that if states can rationalize their systems and thereby bring administrative costs in line with those of other industrialized democracies, states would save enough money that they could cover everyone in the state, with more generous benefits than are currently available, and still spend less overall on health care statewide.

Bill summary

• Planning Grants. A maximum of 10 states would receive grants of up to $3.75 million each to assist in the research and development of a State Plan for universal, comprehensive, cost-effective health care with simplified administration. States would have the freedom to design plans suited to their own unique needs, as long as they met basic requirements, including comprehensive benefits and protections, universality, quality assurance, and cost-containment.

• Demonstration Projects. The Secretary of Health and Human Services will approve up to 5 state plans as 7-year demonstrations.

• Demonstration Grants and Waivers. These approved states would each receive a one-time grant amount of $10 million plus $3 per capita to assist them in the transition of their health care delivery and financing infrastructure. The states would also receive waivers both to remove federal requirements that may inhibit state innovation, and also to permit states to pool the funds that the state and its residents currently receive from the federal government for various health programs.

• Maintenance of Benefits/Protections. Individuals who would otherwise have received health care through any of the waived federal programs would, under the new State Plan, receive benefits, at least as generous (in terms of coverage, access, availability, duration, and beneficiary rights) as those offered under the federal program. They would also be protected from additional out-of-pocket expenses.

• Comprehensive Benefits. The bill would allow states to guarantee residents more generous health care benefits than they currently receive, including long-term care, prescription drug coverage, dental and vision services.

• Strong Quality Assurance Requirements. The states would have to assure, monitor, and maintain the quality of health items and services offered under the plan.

• Evaluation. The Secretary would provide for implementation of an infrastructure of standards, guidelines and formats for data collection and evaluation of these state proposals. This infrastructure will enable the U.S. to create a body of knowledge on the comparative effectiveness of state programs that will provide indispensable as we continue to consider the merits of a national universal health care system.

We are in the process of soliciting cosponsors, and to date, Reps. James McGovern, Michael Capuano, and John Olver have signed on to the bill.