National Health care policy state-by-state?

While those of us deeply immersed in the healthcare debate have strong opinions about which way to go, we could probably benefit from hearing the ideas of others who are students of government, while not necessarily engaged in its actual nitty-gritty where we sometimes don’t see the forest for the trees.
While teaching at UC Santa Barbara, I had the opportunity to work with Stuart Kasdan, who served as the Teaching Assistant in a class I taught on California Politics and Public Policy.
Stuart Kasdan is a graduate student and PhD candidate in Political Science at UC Santa Barbara.
His previous employment includes work as a senior program examiner at the federal Office of Management and Budget (OMB). Stuart has a masters degree in Agricultural and Resource Economics from UC Davis and served as a peace corps volunteer.
Although I’m a firm believer in the importance of removing the insurance industry from the healthcare debate, Stuart proposed a system that acknowledges the political reality that the insurance business carries alot of weight in the halls of Congress. They certainly control our own governor’s thinking on the subject and continue to be part of the dialogue among our presidential candidates. So, in the spirit of offering another perspective, I asked Stuart to give his take on the situation and this is what he came up with:

I was considering a good health care proposal for the general election. It seems that a progressive candidate could do well with something simple. My proposal is that the federal government mandates that states offer universal coverage.
First we start with a clear goal — universal coverage. However, it is difficult for the federal government to establish a one-size-fits-all approach. Thus, like Romney is proposing on the Republican side (however, without the goal of universal coverage), each state would be able to choose the type of program it prefers. Thus Hawaii, which has a form of single-payer, would not have to change their program to conform to the federal government. Massachusetts, which relied on employer mandates for its universal coverage, could keep that arrangement.
A single payer program may also turn out to be more popular in some states than is currently assumed. Some states, like Michigan, may wish to enable its companies to become more competitive, and thus may lift the employer mandate burden in favor of a single payer, sponsored by the state (perhaps allowing companies to bid for the right). Unions could negotiate job security or salary increases in return for giving up the health coverage from employers.
An additional value of the mandate is that it would help overcome the recalcitrance of those who simply prefer the political issue to a solution. In California, even as all the political players purport to share the same goals and most of the same approaches, achieving health care solution seems distant. A federal mandate would require that the parties compromise on a solution, not just agree to a no-solution status quo, leaving vast portions of the public without health care coverage.
The mandate for families could certainly be costly. Families required to purchase insurance may not be able to afford the requirement, so that subsidies would be needed. In addition, HMOs would have to be carefully regulated to ensure that they do not offer coverage that is excessively loophole ridden and leaves families equally vulnerable as they are today.
To keep costs lower, smaller states might form compacts with other states and therefore generate a large pool. States could also require that all citizens must have health insurance as the California program initially proposed. The advantage to requiring that all citizens purchase insurance is that the financially prohibitive costs of an unexpected medical problem – one of the major causes of bankruptcy for families –-would be reduced and families better prepared for medical emergencies. In addition, the larger pool of applicants would reduce costs overall since healthy people, not just the expensive, uninsured and unhealthy, would participate.
Another way to keep costs lower is for States to be entitled to incorporate the Medicare and Medicaid programs into the state program, as deemed appropriate by each state. The states would be enabled to use the Medicare billing arrangements for their program, or to alter the Medicare prescription drug purchasing requirements, so as to reduce program costs. The states would likely need additional revenues to make this work. These funds could be added to the health care block grant to support implementation.
The federal government would have to ensure that “universal” means universal. The federal government would have to regulate the states so that the minimum coverage was real coverage, not a facade. Federal regulation would be limited, however, to oversight of the states, ensuring that they achieved the goals of the program.
In general, this is the approach that welfare reform used successfully. It allows flexibility to the states to choose the means to achieve their most pressing goals; one of which would be required — a form of universal health care. It does not threaten private coverage. A federalized system is easy to explain and respects local goals.