Universal Coverage Debate Heating Up in Several States 

Universal healthcare has been debated at the federal level for many years. Familiar names include single payer, public option, Medicare for All and even Hillarycare from the early 1990s. Today, the topic is a political hot potato with at best a lukewarm response in Congress. Almost a dozen states, though, are preheating the stove to debate the viability of a public health plan that would make coverage universally available to residents.

Two states stand out from the rest. First, Oregon voters approved the Right to Healthcare Amendment (Measure 111) in November, adding access to “cost-effective, clinically appropriate and affordable health care” to the state’s constitution. SB 704 (currently pending in committee) is the next step in the process, creating a board to propose a single payer financing system and a universal health plan.

Second, Colorado’s bill (HB 23-1209) passed the House by a comfortable margin (42-20) on April 18. The bill would require the Colorado School of Public health and a legislative task force to research, select and analyze model legislation that proposes a publicly financed and privately delivered universal healthcare system. Seven years ago, Colorado citizens voted down a single-payer system called ColoradoCare that would have been financed in part by a 10% payroll tax. It’s not clear whether the bill will become law before the state’s 2023 legislative session ends in early May.

Other states considering universal healthcare include: Illinois (HB 1094), Massachusetts (SB 744/SB 766), Minnesota (HB 2798/SB 2740), New Hampshire (HB 353), Rhode Island (SB 572) and Vermont (HB 156/SB 74). Maryland’s legislature adjourned without its universal health care bill (HB 329) making significant progress. The same thing happened in Washington (SB 5335). No significant legislative proposals have been introduced in California or New York yet this year; both states considered bills in 2022.

These initiatives largely grow from two concerns: the number of uninsured (even after the ACA) and rising health insurance premiums and out-of-pocket costs that typically outpace inflation and wages. Such a radical change to the market would certainly be a disruption and could ultimately crowd out employment-based coverage altogether. A major payroll tax would be a probable source of funding.

Eventually, this state healthcare reform movement must reckon with federal law. Almost certainly, this type of law would require a state innovation waiver from the US Department of Health and Human Services under 1332 of the Affordable Care Act. Also, ERISA preemption poses a challenge for the ultimate reach of state reforms. A state reform effort to create some type of single-payer healthcare system would require a waiver of ERISA’s preemption doctrine that preserves employers’ right to offer self-funded, employment-based coverage. Currently, neither ERISA nor § 1332 provide for an ERISA preemption waiver, but the idea for changing the ERISA preemption statutory framework has been floated before and could be again.

Employers and employees who favor employment-based coverage should stay abreast of these discussions and engage their representatives when appropriate to ensure that all points of view are properly considered. Even though universal healthcare remains on the horizon, it’s a topic that is gaining momentum.