Health Reform in the States:A Model Of State Small Group Health Insurance Market Reforms

Abstract

For the fourth time since World War II, national policymakers, in 1992, engaged in a major debate over reforming and regulating the U.S. health care system. One of the most debated issues involved the problem of the uninsured. While Congress and the President garnered national attention debating the issue, several states were already dealing with the issue of health insurance and their own uninsurance problems. Today, in the absence of activity at the federal level, the states have become the de facto leaders in health care reform. Since 1990, forty-six states have adopted small group insurance market reforms. Such reforms are designed to improve the availability of insurance coverage for employees of small firms, who make up the largest segment of the uninsured in the states. This article examines the factors that account for the sudden pop ularity of small group insurance market reforms, and the factors or char acteristics of the states that explain the extent of policies adopted. To examine these questions, a pooled cross-sectional time series model is employed. The results indicate the factors contributing to the adoption of small group health insurance market reforms are a state's regulatory envi ronment, a state's regulatory philosophy, state fiscal health, problem severity, and the activities of neighboring states. Implications of the find ings are also discussed.