Summary: States have taken the lead in expanding access to health insurance and containing the growth of health care costs. They have had a difficult time, however, overcoming federal legislation preempting state authority to regulate self-insured employer health plans. States that have tried to move toward coverage of all their citizens have had to work within the constraints of the federal law. One strategy used by Massachusetts and Oregon has been to create "play or pay" systems that rely on the state's power to tax. Employers who provide health insurance to employees generally receive a credit for the amount they spend on coverage; those who do not must pay a tax to help finance state-brokered insurance. These laws are expected to face legal challenges, however, and the outcome is uncertain. Some state initiatives have been more narrowly focused, creating programs to help specific groups, such as low-income children and adults. These programs have successfully extended coverage to some residents, but state budget problems have meant that only a fraction of the uninsured population is being served. State efforts to help the medically uninsurable and small business employees gain access to coverage through the private health insurance market have also achieved modest results. In addition, some states have implemented payment reforms to control medical inflation and reduce administrative costs. Maryland, for example, has lowered cost growth through its hospital rate-regulation system.
