Yesterday was the first day that the health care reform law’s “high-risk pools,” set up by the federal government to cover people with pre-existing conditions, began accepting applications. But because states have the option of using the federal plan or setting up their own, only 21 states can take applications so far:

These 21 states have asked the federal government to run the high-risk pool rather than administer it themselves: Alabama, Arizona, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, Texas, Virginia, Wyoming.

Residents of these states can apply starting Thursday. Administration officials said people who apply by July 15 will begin receiving coverage by Aug. 1.

The remaining 29 states and the District of Columbia will run their own programs and begin accepting applications over the next several months.

“Asked,” of course, is a charitable description by the Los Angeles Times. No doubt some of these states – particularly those with Democratic-controlled legislatures and whose leadership actually care about the uninsured – weighed the options and decided that a federally-run high-risk pool is the better option for them. The federal pools are coming online quicker, most likely, because Federal officials have had the better part of two years to think about how to implement high-risk pools, and some states obviously saw value in having a plan that’s part of a national standard.

But other states didn’t “ask” the federal government to set up their high-risk pools any more than an infant throwing a dinner-time temper tantrum “asks” mommy or daddy to handle the spoon and sippy-cup. For Republican officials in those states, local control was far less important than throwing their tantrum and making a big show out of refusing to lift a finger for reform.

Mother Jones described the situation with a little bit more context at the beginning of May:

At least 15 states—all but three led by Republicans—have decided against creating insurance pools for Americans with pre-existing conditions, forcing the federal government to step in and establish the high-risk pools itself. By contrast, at least 28 states—all but seven led by Democrats—will help the federal government by creating the pools themselves. It’s the first major decision for states to make under the new law. And the Republican-led refusals are the latest sign that red states will be far less willing to play nice as health reform gets underway.

Ultimately, though, the L.A. Times got it right. Republicans may have thought they were making some grand statement against President Obama and against health care reform by refusing to cooperate in the high-risk pools, but all they were really doing is asking the federal government to make the decisions for them.

And they didn’t even succeed in slowing down reform in their states. If anything, they sped it up – which makes this Republican failure a WIN for those with preexisting conditions.

Of all the states where conservative lawmakers are trying to block the new health reform law, Georgia stands out. The Republican sponsor of a state constitutional amendment blocking the individual mandate proposed his own health reform bill three years ago, and it included an individual mandate.

We at the DLCC were shocked, just shocked to discover that there is hypocrisy in the Republican Party:

First they tried to pass a constitutional amendment in the state Senate to declare that no Georgian could be mandated by government to buy health insurance, as if Georgia law could somehow supercede federal law. The amendment failed.

(The amendment was sponsored by state Sen. Judson Hill, who three years earlier had introduced legislation that would have — wait for it — forced Georgians to buy health insurance, even giving state officials the power to garnish wages of those who refused. At the time, Hill attributed the legislation to House Speaker Newt Gingrich, who is now one of the sternest critics of “Obamacare”. In other words, mandated health insurance was a good idea until it became part of the Democratic health-reform bill, at which point it became unconstitutional and the most dire threat to American liberty since General Cornwallis surrendered at Yorktown.)

Frustrated in the Senate, Republicans then tried to pass a similar constitutional amendment in the House.

They failed. Again.

The reason the mandate is so crucial is because it makes it possible to ban exclusions for pre-existing conditions without sending premiums sky-rocketing. That’s why these Republicans thought mandates were such a brilliant idea just a few years ago.

Georgia Democrats saw right through the Republican double-talk and voted against it, preventing the proposed amendment from getting the 2/3 vote necessary to pass. That was a risky thing to do in a conservative state like Georgia, but kudos to both caucuses for standing up for health care for 32 million Americans.

The President’s reform plan hasn’t even passed yet, but right-wing state lawmakers are already trying to strip out key elements of the plan at the state level.

They’ve only managed to pass their bills in a few states like Arizona and Utah, but they’ve filed new legislation to obstruct federal health care reform in 35 states. And if reform supporters win the final showdown in Congress this week, we can expect this trend to continue.

But the stakes are just as high at the state level as they are in Congress. If Democrats fail to protect health care reform from state-level obstruction, millions of Americans who are counting on health care reform to improve -- or potentially save -- their lives will be left out in the cold:

But the $28 billion in Medicaid money is not the whole picture. These reforms will extend Medicaid coverage to nearly 8 million individuals in these states, while millions more will qualify for premium subsidies to help purchase private coverage through health insurance exchanges. This will reduce costs for employers, state governments, and insured individuals, because as these uninsured individuals and families gain coverage, the cost-shift of uncompensated care will diminish. It will also help states out because these new Medicaid eligibility levels will absorb those under 133 percent of the poverty level in state insurance programs, with full federal support for the first several years of the program.

We spend a great deal of time on this blog talking about what states are doing to reform health care. A number of states have made us proud during the last legislative session, and we expect them to continue pushing the envelope for reform, no matter what Congress decides to do.

But if we win the vote this week for health care reform, this won’t be over. The fight will just move to the state legislatures, and we predict it will be every bit as ferocious as the fight to pass the President’s health care plan in Congress.

Here at the DLCC, we’re determined to be ready.

Democratic state legislators across the country made enormous progress on health care reform in 2009, and that trend is set to continue in 2010. Here are some of the state-level reform bills that made headlines this week:

• Idaho: The Idaho House and Senate -- with unanimous support from both Democratic caucuses -- have both passed HB432, a new plan to provide universal access to vaccinations for all Idaho children. Funded entirely by insurance companies and administered by a board of experts, the plan will allow vaccines to be purchased more cheaply and reduce the “free-rider” problem that creates an economic disincentive for insurance companies to cover childhood vaccinations.
  
  
• New Mexico: Democratic-sponsored HB12, which mandates that insurance companies spend at least 85% of their budgets on direct medical care, has been approved overwhelmingly and now awaits the governor’s signature.
  
  
• Ohio: The Ohio legislature has unanimously approved a three-month extension of COBRA health insurance for workers who’ve lost their jobs. The extension will allow Ohioans to take advantage of a 65% CORBA subsidy provided by the federal government for the full 15 months approved by Congress.
  
  
• Wisconsin: The Democratically-controlled Wisconsin Senate has narrowly approved the creation of a limited, state-run insurance program to provide basic coverage for uninsured adults on the waiting list for a more extensive, Medicaid-funded program. BadgerCare Plus Basic would be paid for through individual premiums of $130 per month and would not be supported by tax dollars. The bill, SB484, now moves to the Assembly.

With Congress seemingly stuck on the question of how best to advance health care reform, state lawmakers are done waiting to take up their own initiatives. One major overhaul is under consideration in California.

The bill, introduced by State Sen. Mark Leno, would -- among other things -- create a single payer system:

Christine Kehoe, a San Diego Democrat and the chairwoman of the State Senate appropriations committee, which revived Mr. Leno’s bill, said the costs to the state would be $1 million in the next fiscal year because the bill would only initially create a commission to find ways to pay for expanded health care.

And while Ms. Kehoe said a single-payer system could cost “tens of billions a year,” she added that the state was already paying significant amounts for other publicly financed health care programs. She said Mr. Leno’s bill — which would also expand eligibility for Medi-Cal, California’s Medicaid program — would eventually result in the state saving money.

“The cost of health care insurance in California is a major hindrance to our economy,” said Ms. Kehoe, citing large numbers of uninsured and people paying high rates. “If we could begin to trim some of those costs, there would be billions of dollars going into the economy for more productive use.”

California Democrats have twice before passed bills to create a single-payer system in the state, only to see them vetoed by Republican Governor Arnold Schwarzenegger.

But the importance of a single-payer win in California cannot be overstated.

Independently, California would have the 9th-largest economy in the world, and it contributes 13 percent of the United States’ gross domestic product. Adding California to the ranks of the single-payer health care systems would add enormous momentum to the national health reform push, and it would make other, more moderate reforms (like a robust public option) politically viable across the country.

So for anyone still doubting the power of state legislative politics, watch what happens if California passes this bill.

Nine of the top-ten state healthcare systems in America are in states where Democrats control both chambers of the legislature, according to a new report by the non-partisan Commonwealth Fund.

Democratic states in the Northeast, West, and Midwest performed best of all, capturing all five of the top spots in the study:

Overall, the 2009 State Scorecard paints a picture of health care systems under stress. Still, improvements made in certain indicators and in certain areas of the U.S. indicate that individual states have the capacity to do much better, especially when their efforts are supported by strong federal policy and national initiatives. In 2009, Vermont, Hawaii, Iowa, Minnesota, Maine, and New Hampshire lead the nation as the top-ranked states (Hawaii and Iowa tied for second place; Maine and New Hampshire tied for fifth). Their performance ranks in the top quartile of states on a majority of scorecard indicators. In particular, the reforms passed by Vermont in 2006 to cover focused on preventing and controlling chronic disease are providing a new model for other states.

Especially notable about the Commonwealth Fund report is how many of the best-ranked states are pursuing healthcare reform initiatives.

Many states we’ve highlighted in the past for their innovations (including Vermont, Hawaii, and Connecticut) made the top-ten, proving once again that states (especially Democratic states) are leading the way on this important issue.

Since we mentioned Oklahoma Democrat Eric Proctor’s pledge to sponsor legislation banning insurance companies from denying coverage for survivors of domestic violence, we should point out that Arkansas Democrats successfully passed similar legislation earlier this year:

Six months after the Women’s Health Summit, Governor Beebe signed ACT 619 into law. The Act adds “status as a victim of domestic abuse” to the list of attributes that insurers may not use as the sole justification for denying an individual health insurance coverage.

Congratulations to all of the advocates in Arkansas who worked on this issue.

Every vote against this bill came from a Republican -– to the party’s shame. Thankfully for the people of Arkansas, Democrats dominate both legislative chambers, and those Democrats voting on the bill supported it unanimously.

Incredibly, there are eight states in the country where insurance companies are allowed to count domestic abuse as a preexisting condition in order to deny coverage to victims of domestic violence.

Oklahoma is one of them.

Democratic Representative Eric Proctor wants to see that change:

"We need to be doing everything we can as a state to help these women, these children back on the road to recovery," he says. "Right now they're starting a survival process. We're one of only eight states in the country that permits them to be care for counseling care they need or the medical treatment they need."

This week, Proctor announced that he will sponsor legislation to end the practice.

Thirty years after Maryland imposed an elaborate system of price controls for medical procedures, not only have the state’s hospital costs sunk below the national average, but hospitals are more consistently profitable than elsewhere in the country. Is this an example of a functioning command economy, or simply proof that health care behaves much differently than a traditional free market?

Maryland’s experience began in 1977, when Maryland hospital costs were 25 percent higher than the national average. That year, the state established the Maryland Health Services Cost Review Commission, which sets the rates specific hospitals may charge for specific procedures. Rather than setting a blanket rate for every procedure, the Commission creates a separate rate structure for each hospital, adding flexibility to the system to accommodate local conditions at each hospital.

The system has fundamentally changed the way Maryland hospitals charge their patients and created significant cost savings through greater efficiency:

Private insurers aren't allowed to bargain for discounts on hospital payment rates, though patients may not notice the difference. But that isn't the case for the uninsured. In other states, hospitals typically charge the uninsured steep prices that no insurer actually pays, forcing the hospitals to write off the charges they can't collect payment for. In Maryland, where hospitals know they will get reimbursed for charity care, hospitals charge the same rate whether a patient has insurance or not.

The system has largely reined in hospital costs. In 1976, Maryland hospital costs were 25% more per case than the national average; by 2007, the latest year for which data are available, Maryland's costs were 2% less than the national average. Maryland also saw the nation's second-slowest increase in hospital costs during the same period, said Robert Murray, the commission's executive director.

On average, Maryland hospitals charged patients 20% above the cost to treat them in 2007, compared with a national average of 182%, according to the American Hospital Association.

But what consequence do these savings have for the hospitals themselves and their bottom line? According the president of the Johns Hopkins Health System, Maryland Hospitals are doing quite well under the Commission’s rates, perhaps because revenue streams are more predictable:

Maryland hospitals have a steady profit margin, unlike hospitals in other states that often make more money during boom years and less during a recession. For Johns Hopkins Hospital, the profit margin from operations is consistently between 2% and 4%, Mr. Peterson says. Statewide, the commission says the profit margin averages about 2.5% to 3%; before the commission was established, Maryland hospitals were losing money covering the uninsured.

Unlike employer mandates, preventive care, and other reform ideas states have experimented with, price controls have not been a major part of the national healthcare debate this year. And maybe they shouldn’t be –- a commission like the one in Maryland might not work as well on a national scale. But the idea of hospitals charging insured and uninsured patients the same rates could be promising, and like all state-level healthcare reform experiments, national policymakers would do well to take a closer look.

California Assembly Speaker Karen Bass -- a DLCC board member -- has brokered a deal in the legislature that will keep nearly 700,000 children in her state covered by health insurance through the Health Families program:

Under the rescue effort, Healthy Families will reap $196 million to keep 660,000 children of low-income families from losing health insurance provided by the government program. Much of the money will come from a new 2.35% tax on health insurance companies that will be used to leverage nearly $100 million in federal matching funds.

Speaker Bass said the measure was one of the most heartening votes of the legislative session, and Gov. Arnold Schwarzenegger called the compromise that Bass worked out "a great victory for California's kids."