Health reform mandates hinder some high performing states

While provisions in the new health reform law are intended to raise the level of health insurance coverage across the land, some states that are already ahead of the game are finding their more robust health reform efforts hamstrung by federal bureaucratic hurdles.

An interesting case in point is the federal health reform provisions calling for the creation of high-risk insurance pools to provide coverage for uninsured citizens with preexisting conditions that may be denied coverage by private insurers.  States were given until July 1st to set up their pools, or let the federal government establish them. The state of Vermont, one of the most progressive states in terms of providing coverage to its citizens, missed this deadline for a reason that may be new to federal health reformers: There are no citizen in Vermont who risk being denied insurance coverage based on pre-existing conditions. That's right, this high-risk population technically doesn't exist.

How is this possible? Since 1992 denying coverage because of pre-existing conditions has been against the law in the State of Vermont. Insurance companies are able to delay coverage for one year. So instead of creating a risk pool for a population that doesn't exist in Vermont, state officials submitted a proposal to create a plan that would utilize the $8 million in available federal health reform funds due to Vermont to cut that waiting period in half from 12 to 6 months. This plan would be modeled on an already existing state-subsidized, private health insurance program called Catamount Health. The proposed plan would have used those federal monies to provide subsidized insurance to any citizen residing in Vermont who was uninsured for at least six months and had a pre-existing condition.

Unfortunately, the feds have denied this request, so state regulators are scratching their heads and trying to find a solution that is feasible, matches the specific conditions facing Vermont's health care finance environment, and that also meets federal mandates and regulations. "We haven't found [the federal Health and Human Services administration] to be as flexible as we hoped," says Christine Oliver, a deputy commissioner at Vermont's Banking, Insurance, Securities, and Health Care Administration.

As is often the case with programs aimed at raising the bar on average performers, could health reform efforts actually hinder efforts at improving population health in the highest performing states?