IN THE STATES: Unintended Consequences in (the Other) Washington

A new policy magazine and online site called Miller-McCune took a look at the debate about individual mandates. The article argued that Barack Obama and Hillary Clinton aren't really that far apart on health policy (one reason, perhaps, that they haven't been arguing about it as much recently). As New America's Len Nichols was quoted as saying, mandates don't necessarily have to be the first step but you do have to get everyone in the system to make it work. Otherwise sick people buy policies, healthy people take their chances, costs go up, the system gets creakier and creakier.

We all know about the financial problems Massachusetts is facing with its plan to cover everyone. Less well-known is the experience of Washington state which introduced a version of "guaranteed issue" (when insurers have to sell to everyone, sick or well.) Insurers were not allowed to reject more than 8 percent of applicants. The state did not, however, require everyone to be covered. The result was huge premium increases.

"In a year that some individual rates rose by more than 40 percent, Washington insurers amassed a record $1.4 billion surplus. Lawmakers responded in March with a bill restoring the state's authority to regulate individual rates, in effect opening the door to price controls, but they did not impose a mandate," the Miller-McCune report said.

We're encouraged when states experiment with reform; some initiatives succeed and the rest of the country can learn from them. But state reform also has limits, as the Washington state experience shows. They could not impose a mandate, which would have made their market with guaranteed issue work better, because they do not have the money for subsidies to make insurance affordable for all. Just one more reason that we're convinced that the best approach is a comprehensive national reform, with ample room for state variation so that local conditions can fit within federal parameters and guarantees.