Federal health overhaul could force state changes

The bills pending in Congress could alter some restrictions on insurers and channel money to state health programs.

The House bill includes, for instance, $23.5 billion to "allow Congress to continue pumping billions in new short-term aid to states to cover Medicaid costs that have increased with rising unemployment in the past year," The Washington Post reports. The stimulus bill in February also included Medicaid funding, but that package is due to run out next year (Davis, 11/16).

The bill could make it difficult for some states to enforce consumer protection laws, the Los Angeles Times reports. "Healthcare overhaul bills in both the Senate and the House would open the door to insurers selling policies across state lines -- which some lawmakers fear could allow health plans to take advantage of the lenient rules in some jurisdictions while avoiding tougher enforcement regimes in places like California" (Girion, 11/16).

State insurance commissioners, however, could also be vested with sweeping new powers. "The Illinois Department of Insurance helps to oversee a health care system that has allowed insurance companies to essentially dictate how much consumers are charged and what kind of benefits they get," the Chicago Tribune reports. "But that would change under health care bills making their way through Congress. … [S]tate insurance directors, would be given unprecedented powers in helping to decide the benefits and cost of health plans for the proposed government-regulated insurance exchange" (Japsen, 11/16).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.