Zelinsky on the Need for State Experimentation for Health Care Reform

I am already a big fan of the work of Ed Zelinsky (Cardozo) on such employee benefit issues as cash balance plans and ERISA preemption.  So when Rebecca Ford of the Oxford University Press (OUP) Blog wrote me to plug Ed's new book, The Origins of the Ownership Society: How the Defined Contribution Paradigm Changed America, and a post he wrote in support of that book, of course I was going to post it.

Here are some highlights from Ed's Post on the OUP Blog:

The financing of medicine has emerged as the central domestic issue of the 2008 presidential campaign. Hovering over this debate is the memory of the failed health care initiative spearheaded by the then First Lady in 1993. Senator Clinton’s supporters suggest that Senator Clinton has learned from that earlier, unsuccessful experience. Her opponents contend otherwise.

There is, however, an important lesson learned since 1993 which, so far at least, most health care reformers have been unwilling to embrace: “National” health care needn’t be national; indeed, it should not be. The states can and should be in the forefront of health care policy. Different states can experiment with different formulas and can adapt to local preferences about health care. The federal government ought to permit state innovation to flourish in the financing of medical care, rather than impose a single set of nationwide rules . . . .

Before legislating federally, we should wait to see how the Massachusetts experiment plays out. Perhaps Massachusetts’ experience will confirm the value and practicality of individual and employer mandates as well as expanded insurance subsidies for low income persons. Perhaps the Massachusetts experiment will reveal that some or all of these approaches should be modified or abandoned. A great strength of federalism is that Massachusetts, and other states, can act as laboratories of public policy and thus generate useful information for the nation as a whole . . . .

Today, the major impediment to state-by-state experimentation with health care is the Employee Retirement Income Security Act of 1974 (ERISA) which prohibits the states from enacting laws which “relate to” employer-provided medical care. Since employer-provided health care is central to the status quo, this prohibition legally dooms much productive experimentation, like the new Massachusetts health plan. Accordingly, the first order of business for federal health care reformers should be the modification of ERISA to permit state-by-state innovation in the financing of health care.

Check out the whole post and by all means, buy Ed's book as is it will likely be a hot topic of conversation during the 2008 Presidential campaign.

PS