FEDERALISM AND HEALTH CARE: THE CASE OF WOMEN’S REPRODUCTIVE HEALTH CARE IN THE UNITED STATES

Marian Lief Palley

Professor Emerita of Political Science and International Relations

University of Delaware

This paper was prepared for delivery at the First International Conference on Public Policy (Grenoble, France), June 26, 2013.

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FEDERALISM AND HEALTH CARE: THE CASE OF WOMEN’S REPRODUCTIVE

HEALTH CARE IN THE UNITED STATES By its very nature, a federal system has the seeds of public policy fragmentation built

into it. It has been argued that variability in policy development and implementation can

lead to program experimentation and innovation. In fact some scholars argue that the

development of important national policies depend heavily on previous state

implementation of policy. Moreover, states do much to shape policy and set the

parameters for local implementation of policy (Thompson, 2002: 362). Scholars also

point to the fact that states have always played a prominent role in American politics.

They initiate programs and they play a central role in the intergovernmental nexus

(Elazar, 1994; Wright, 1988; Nice and Fredrickson, 1998; Jacoby and Schneider, 2001).

Despite the growth of the national government and an increased role by the national

government in setting public policy in a broad array of policy areas, states’

responsibilities have grown in the past 3 decades and there is more “state-centered”

policymaking than there was in the past. Put in somewhat different terms, state

governments must deal with a multitude of issues and demands. Different states address

these concerns differently. As a result, policy varies from state to state (Jacoby and

Schneider, 2001; Gray, 1999; Nathan, 1996; Rivlin, 1992).

Agranoff and McGuire have identified four models of management in the U.S.

intergovernmental system. These are the top-down model, the donor-recipient model, the

jurisdiction-based model and the network model (2001: 671). The network model

focuses attention on the actions of multiple governmental and non-governmental players

as they pursue the dynamics of joint action and intergovernmental adjustments (Agranoff

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and McGuire, 2001). There are several programmatic effects that can occur in this type

of system, and one of them is fragmentation.

Moreover, fragmentation is likely to be the by-product of a system that is not

following a top-down approach. It can also be argued that a federal structure that relies

on states to shape policy can lead to “horizontal inequity” -- that is geographic inequities

in terms of unequal meeting of equal needs -- and “vertical inadequacy” -- that is often

poor quality of services addressing such needs. This is not to say that public policies

must be fragmented in a federal system. However, the potential for fragmentation is

present and without a focused national policy that follows a top-down approach,

fragmentation will likely result with the consequent geographic inequities and instances

of vertical inadequacy. Development of non-fragmented policies is certainly possible in

a federal system and in many instances desirable. For example, the Social Security Old

Age, Survivors and Disability Insurance (OASDI) program is a national program that

adheres to a top-down model of management and thus has national administration and

nationally determined contributions and benefits.

The development and the delivery of health care services is a policy area that is

rooted in localism and in our federal system of diverse jurisdictions, and it is fragmented.

Fragmentation of the health care delivery system is the reality despite the fact that there

are numerous federal programs and a multitude of federal regulations. As just noted, the

OASDI program is a centrally controlled program without the problems associated with

fragmentation. On the other hand, the health care delivery system is wrought with

problems associated with federalism run amuck and its associated fragmentation. Part of

the reason for the difference in structure is related to historical developments that rooted

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health care policies and regulations in localities and the states, and maintained the role of

the private sector in service delivery. This however is the subject for another study.

The questions raised in this paper are: First, what effect has the interplay of multiple

actors in both the public and the private sector (network model) had on the availability of

women’s reproductive health care services? Second, to what extent has the fragmented

nature of the women’s reproductive health care delivery system led to vertical inadequacy

and horizontal inequity?

Perhaps a caveat needs to be included before one goes further with this analysis.

During most of American history it was assumed that national rather than state based

decision making provided for better programming and distribution of social services. It is

no longer clear that this is the current reality given recent congressional, judicial and

national executive priorities. In fact, in some states women might be better off with state

based policies governing their access to reproductive health care services. For example,

New York and Connecticut have almost no restrictions on access to abortion,

contraception and sterilization services1 whereas other states such as Mississippi, North

Dakota and South Dakota limit reproductive health care options for women (National

Women’s Law Center, Jan 2013).

Also, it is significant that even in states where reproductive health care services are

available there is a good deal of disparity and discrimination that has had a negative

impact on women of color, which is often associated with disproportionate poverty. Thus

infant mortality rates (deaths per 1,000 live births), which are a good surrogate indicator

of maternal health and thus reproductive health care were 8.28 for African American

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infants and 4.18 for Native American infants as opposed to 3.08 for Asian American

infants and 3.50 for non-Hispanic white American infants (CDC, 2012).

Regarding state differences in the availability of services and care, it is often the case

that in the states with the highest proportion of women of color the health outcomes are

among the worst in the nation. Thus in the states that have the largest concentrations of

people of color the negative effects -- including vertical inadequacy and horizontal

inequity -- of the network model are most likely to be seen. By way of illustration, 2009

data published by the CDC in January 2013 indicates that the infant mortality rate for the

nation was 6.59 per 1,000 live births. In the District of Columbia, in which 57% of the

population was African American, it was 12; in Louisiana, with 33.1% of the population

African American it was 11.48; in Mississippi, with an African American population that

was 36.9% of the total population it was 10.1; in Georgia that had an African American

population that was 29.8% of the total population is was 7.78%; and in South Carolina, a

state in which 29.2% of the population was African American it was 7.86. In Maryland,

the African American population was 29.3% of the total population. This is a state that is

usually associated with a reasonably good health care system. However, the infant

mortality rate was 7.74 (CDC, 2013).

Background

There are multiple actors involved in the health care delivery system, the federal

government, state governments, local governments, insurance companies, hospitals,

private health care providers such as doctors, and pharmacists. One must begin with

several general observations regarding the health care delivery system in the United

States. Private providers who operated on the basis of fee for service initially made

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medical care available. Hospital care was based primarily on fixed per day-based

charges. Over the course of time, regulation of health care and licensing of health care

providers evolved and it was state-based. Moreover, health care services are provided

locally. In other words, all implementation of health care services is local. Government

regulation of health care and licensing of health care providers was traditionally state-

based. Also, though most hospitals are voluntary not for profit organizations or public

organizations, there are other hospitals that are for profit. The voluntary and public

hospitals are locally based (though the Veterans Administration does maintain a national

system) and traditionally supported by local funds and/or not for profit organizations such

as religious organizations.

In fact, religious organizations are sometimes in control of policy that affects the

delivery of women’s reproductive health care services. For example, hospital mergers

between secular and Catholic hospitals affect the availability of reproductive health care

services for women (Palley and Kohler, 2003). Private sector decisions are being made

that can have a direct impact on public services, which is the availability of a set of health

care services in communities. Put in somewhat different terms, private policy is driving

public policy. “When Catholic hospitals merge with non-Catholic hospitals, … the

Catholic hospital usually insists that the merged facility comply with Catholic doctrine”

(Palley and Kohler, 2003: 155). Thus, abortion, provision of contraception, sterilization,

and the use of the morning after pill are not permitted in Catholic facilities (Palley and

Kohler, 2003; 155). In many communities when a hospital merger takes place there is no

secular facility left where a woman can have her reproductive health care needs met.

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A noted above, health care service has traditionally been delivered primarily by non-

governmental, fee for service providers. When health insurance was initially introduced

it was done so in the states by private insurance companies (originally the “Blues”) and

was regulated by state insurance commissioners. Of course at the present time a

considerable segment of the private health insurance industry is regulated by (Employee

Retirement Income Security Act of 1974) rules that prevent states from initiating

regulatory policies in many instances.1 Also, with the advent of Medicare in 1965 and its

subsequent evolution, there is a great deal of federally determined regulatory policy for

both for profit and voluntary hospitals as well as for physicians fees for services provided

to the elderly and the disabled.

The federal government was a relative latecomer to health care delivery in the United

States though at the present time it is the single biggest payer for health care in the nation.

There are several exceptions to this observation. For example, since the early days of the

Republic the federal government imposed quarantines on merchant seamen and in 1798

developed the Marine Hospital system (GAO, 1971), which was the precursor of the

Veterans Administration health care system. Also, the Social Security Act of 1935

provided some funds to the states for the development and maintenance of state-based

public health clinics for specific purposes. However, major federal involvement in the

health care system did not really occur until the 1965 enactment of the Medicare (Title

18) and Medicaid (Title 19) amendments to the Social Security Act of 1935. Medicare

was developed as a national insurance program for people who were eligible for OASDI.

Medicaid was developed as a means tested, state-based program However, even the

1 ERISA rules govern certain types of private insurance policies including those that involve self- insurance and those that are multi-state in nature.

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nationally funded and administered Medicare program was conceptualized with the

private and local nature of the delivery of health care services in mind. In other words,

public funds were authorized to pay for usually private delivery of services but with

substantial federal regulations, and with some variations regarding local implementation.

Since the enactment of Medicare and Medicaid there have been additional federal

involvements in the health care delivery system. However, federal initiatives, such as

State Children’s Health Insurance Program, known popularly as S-CHIP, have given

considerable control over programming to the health care providers and control and

oversight to the states. Women’s reproductive health care services are no exception to

this reality of fragmentation that has resulted from the utilization of a network model for

the delivery of care.

Most recently, the 2010 enactment of The Affordable Care Act (ACA) has put in

place some federal regulations that should affect the provision of reproductive health care

for women. However, it is left to the states to oversee the availability of health coverage

to people who will be given the opportunity to purchase care through the ACA

framework. And, despite the fact that the law requires that private insurance carriers as

well as Medicaid covers a variety of services for women, including mammography, Pap

tests and contraception, it is too soon to know to what extent the states will fully comply.

The Network Model, Fragmentation and Women’s Reproductive Health Care

Reproductive health is a central component of women’s overall health and well being.

Women’s reproductive health is defined as contraception, care for STDs and other

screenings, maternity care, abortion services, and infertility treatments (Ranji, 2005).

These services are affected by private insurance plans as well as by federal policies and

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programs; state policies and programs, hospital policies and other locally based private

and voluntary organization care providers. Thus there are multiple players and the rules

that govern their actions vary from state to state. In general, most states have a “mixed

commitment” to reproductive rights for women allowing some services to be provided

and placing restrictions on other services (IWPR, 2004: 39; Guttmacher Institute, 2007).

The mixture of this mixed commitment varies greatly from state to state.

At the present time almost all insurance plans cover prescription drugs, but not all

of the plans provide coverage for all of the FDA–approved prescription contraceptive

drugs and devices. “More than half of states, however, require insurance policies that

cover other prescription drugs to also cover all FDA-approved contraceptive drugs and

devices, as well as related medical services. (However) some of these state policies allow

employers or insurers to refuse to cover contraceptives on religious or moral grounds”

(Guttmacher Institute, May 1, 2013).

“28 states require insurers that cover prescription drugs to provide coverage of the full range of FDA- approved contraceptive drugs and devices; 17 of these states also require coverage of related outpatient services.

§ 2 states exclude emergency contraception from the required coverage. § 1 state excludes minor dependents from coverage.

§ 20 states allow certain employers and insurers to refuse to comply with the mandate. 8 states do not permit refusal by any employers or insurers.

§ 3 states include a “limited” refusal clause that allows only churches and church associations to refuse to provide coverage, and does not permit hospitals or other entities to do so.

§ 7 states include a “broader” refusal clause that allows churches, associations of churches, religiously affiliated elementary and secondary schools, and, potentially, some religious charities and universities to refuse, but not hospitals.

§ 9 states include an “expansive” refusal clause that allows religious organizations, including at least some hospitals, to refuse to provide coverage; 1 of these states also

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exempts secular organizations with moral or religious objections. (An additional state, Nevada, does not exempt any employers but allows religious insurers to refuse to provide coverage; one other state exempts insurers in addition to employers.)

§ 14 of the 20 states with exemptions require employees to be notified when their health plan does not cover contraceptives.

§ 4 states attempt to provide access for employees when their employer refuses to offer contraceptive coverage, generally by allowing employees to purchase the coverage on their own, but at the group rate (Ibid).

Major Federal Funding Sources

Medicaid

Medicaid provides health care coverage for about 6 million women. This program

covers a major portion of publicly funded family planning services. Medicaid is a major

funding sources for reproductive health care services for poor women. Thus the funding

formula and the constraints imposed on service availability will have a direct impact on

poor women. These women are disproportionately women of color.

There is a favorable federal match (90-10) for states providing family planning

services. Though there are federal regulations with which states must comply when they

accept federal dollars, states retain a good deal of autonomy regarding how and to whom

services are provided. This is a function of the policy fragmentation noted above.

Medicaid covers all pregnancy-related care for those women who are eligible for

coverage. The federal eligibility threshold is higher for maternity care than for other

services provided for adults – 133% of poverty level. Many states have applied for

waivers that have expanded eligibility and there are states that have expanded coverage

and provide care for women with incomes up to 275 % of the poverty level (Guttmacher

Institute, May 2013: 1). Also,

“31 states have obtained federal approval to extend Medicaid eligibility for family planning services to individuals who would otherwise not be eligible. (Texas

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operates a similar, but entirely state-funded, program that provides family planning services to women at least 18 years of age with incomes up to 185% of the federal poverty line)

26 states provide family planning benefits to individuals based on income; most states set the income ceiling at or near 200% of poverty.

2 states provide family planning benefits for women losing Medicaid for any reason.

3 states have extended eligibility for family planning services to women losing Medicaid postpartum.

15 states provide family planning benefits to men and women.

22 states include individuals who are younger than 19 years of age; 3 additional states include 18-year olds but not younger individuals.

21 states operate their programs under a waiver from the federal government; 10 states operate their programs through a State Plan Amendment” (Guttmacher Institute, May 2013: 2).

There are multiple sources of public funding for women’s reproductive health

services, but as noted previously, Medicaid is the single largest provider of funds for

these services.

_________________________

• Medicaid 61% • Federal grants2 24% • Other State Funds 15% __________________________

As just noted, Medicaid programs are state run programs which have some federal

rules that govern their administration. Moreover, non-governmental organizations and

local service providers are also participants in the administrative and service delivery

mix. For example, state and local Planned Parenthood organizations are reproductive

health care providers. The scope of services and the populations that they serve will vary

somewhat from jurisdiction to jurisdiction. Some of this difference is a function of state

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laws while other differences in service delivery will be a result of staff and space capacity

as well as the success of a local affiliate in raising additional funds from non-

governmental sources. This condition has led to policy differences among the states and

differential access to reproductive health care for women depending on where they

reside.

Title X

Title X of the Public Health Service Act provides public funds for clinics and

providers of family planning services. Though this is a program that builds on a network

of both public and private providers, and though there is a good deal of difference among

the states regarding coverage, it is the only federal program that provides funds devoted

solely to family planning. By law, no Title X funds may be spent on abortions. Title X

programs offer a wide range of other preventive health care services:

o breast exams and instruction on breast self-examination o Pap tests for early detection of cervical cancer or precancerous conditions o testing for high blood pressure, anemia, and diabetes o screening and appropriate treatment for sexually transmitted infections (STIs) o HIV screening o safer-sex counseling o basic infertility screening o counseling on adoption, foster care, and pregnancy termination o referrals to specialized health care (Planned Parenthood, 2007)

Title X serves 5 million women annually. Services are provided through a network of

community-based clinics that include state and local health departments, hospitals,

university health centers, Planned Parenthood affiliates, independent clinics and public

and non-profit agencies. There are 4400 clinics that receive Title X funds and there is at

least one provider of family planning services funded by Title X in almost ¾ of all U.S.

counties. Thus there are more than 25% of counties with NO Title X program (Office of

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Population Affairs, 2013). Also, funding levels have not kept up with inflation. In FY

2012 funding for Title X was set at just over $297 million, less then it was for FY 2008

(Ibid).

If one considers Title X and the different ways in which states administer

confidential reproductive health services for minors the effects of fragmentation become

very clear. Studies of teens who utilize family planning services suggest that many of

these teens would not go to the clinics if they believed that confidential access to

reproductive health care services was in question. In other words, confidentiality is very

important. More than 1/3 of teens who visit reproductive health care providers do so at

clinics that receive public funds. These adolescents are disproportionately members of

minority groups and they come from low-income families (Jones and Boonstra, 2004:

82). At the present time there as 21 states that permit minors to consent to receiving

reproductive health care services where as 25 states permit minors this right in limited

circumstances (“State consent laws based on status are, for example, those that allow a

minor to consent to care if she is pregnant or a parent; in some states the minor may only

be able to consent to care related to the pregnancy or the child. Some state laws allow for

consent when the minor is seeking a particular service, such as STI testing or

contraception”) (Family Planning and Contraceptive Research Policy, 2011: 1).

Selected Services

Contraceptive care

In the United States almost 50% of pregnancies are unintended. The provision of

affordable and reliable contraception could lead to a reduction in this number and in turn

would bring down the number of elective abortions (Center for Reproductive Rights,

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2005). Fragmentation, which can be a function of the network model of management,

was apparent in that coverage of contraceptives across the states prior to the issuance of

regulations by the Obama administration on contraception and the Affordable Care Act.

There had been no federal mandate to provide contraceptive care to women (or men). The

Obama administration issued new standards guaranteeing free coverage of preventive

health services including government-approved contraceptives as a requirement for all

health insurance companies under the Affordable Care Act. Among the drugs and devices

that must be covered are emergency contraceptives including pills known as Ella and

Plan B. In 2012, the Obama administration indicated that it would not give a waiver on

the grounds of conscience to Catholic institutions for the implementation of these rules

but would allow a delay in their enforcement until 2013.

Private medial care providers (physicians and in some states, nurse-midwives) can

prescribe contraceptives. Also, some contraceptives are available over the counter in

pharmacies. In many communities NGOs such as Planned Parenthood clinics provide

services to Medicaid clients and are the recipients of Title X funds. These clinics are

major dispensers of contraceptives to women in need.

Prior to the regulations noted above, differential access to services was a result of the

policy and programmatic discretion afforded the multiple players in the system. This led

to one’s state of residence affecting access to contraceptives services, an important health

related service. The result of this condition was vertical inadequacy in some states and

horizontal inequity in the provision of family planning services to women based on their

state of residence. This situation should be eliminated as a result of the Affordable Care

Act rules.

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Emergency Contraception

In August 2006 the Food and Drug Administration (FDA) approved the over the

counter sale of emergency contraception (EC). The product, known as Plan B, provides

for a concentrated dose of the hormone found in many regular birth control pills. It can

prevent pregnancy when taken within 72 hours of having unprotected intercourse. It is

now an over the counter drug though it is still a prescription only medication for girls

under the age of 15. Prior to this FDA approval in most states a prescription was

necessary in order to have access to EC.

State legislative bodies provided different rules for the availability of Plan B.

Regarding expanding access: One would assume, however that now that it is FDA

approved as an over the counter drug for women and girls over the age of 15 that there

will be consistency among the states. However, since this is a May 2013 rule it is too

soon to know the extent of compliance across the states.

Abortion Services

One of the most politically charged domestic issues in the United States at the present

time is a woman’s right to terminate a pregnancy (i.e. abortion rights). States have a

good deal of discretion in regulating abortion rights and in some states opponents of

abortion rights have been able to have some legal restrictions placed on a woman’s right

to have an abortion.

The Hyde Amendment bans federal financing of abortions except in cases of rape,

incest or to save the life of the mother. This affects women who have Medicaid

coverage. Since Medicaid covers services for a population that is disproportionately

minority and poor, there is certainly a class bias that is built into these rules. It is more

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difficult for a poor woman to have a legal abortion than it is for a middle class woman

who can pay for the services with private insurance or out of pocket and receive services

from a private physician.

Where on lives will determine if and when a woman can realistically expect to find an

abortion provider and under what conditions she can have the procedure performed.

Only 12% of U.S. counties have an abortion provider. There is significant fragmentation

apparent regarding abortion services in the different states. For example, there are post

viability abortion bans in place in many states and the District of Columbia. Also, there

are waiting periods for abortion services in the majority of states. These waiting periods

vary from 1 hour to 2 days excluding the day on which information is provided and the

day on which the procedure is provided. In addition some states have provider/facility

regulations and parental consent/notification for minors. Thus it is clear that the

utilization of a network model of service availability has had the effect of fragmenting

accessibility of a service that many women want, since, as was previously noted,

approximately 50 % of all pregnancies in this country are unintended. This is certainly a

case of vertical inadequacy and horizontal inequity.

There is one apparent exception to the fragmentation of policies that went into effect

in 2007. In April 2007, the Supreme Court handed down its decision in Gonzales v.

Carhart (550 US 124). In their decision the Court upheld the restrictions on an abortion

procedure that had been outlawed by congress when they enacted the Partial Birth

Abortion Act of 2003. More specifically, the Court held the 2003 law to be

constitutional. Thus the dilation and extraction procedure used by physicians when they

perform late term abortions was effectively banned nationally. The Supreme Court in

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handing down this decision in effect trumped state policies that permitted the use of this

procedure if a physician determined that there was a medical need. Technically, a

physician may appeal to the county for a “waiver” but this is usually not considered a

practical possibility.

Conclusions

Federal and state policies have a significant effect on women’s reproductive

health care services. As discussed above, there is a significant amount of difference in

the scope of available care and the limitations on the availability of reproductive health

care for women among the states. When one examines the data on the provision of

women’s reproductive health care, questions certainly arise regarding both “horizontal

equity” (geographical equity) and “vertical adequacy” (quality of care related to need). It

is instructive to consider some of the data.

There are any number of indicators one can use to illustrate this lack of horizontal

equity and vertical adequacy. One illustration will be used here. A good surrogate

indicator of women’s reproductive health is “percent of low birth rate babies.”

California, Minnesota, Maine and Vermont have the fewest low birth weight babies.

They each provide Medicaid coverage to pregnant women with incomes of either 285%

or 200% of the poverty level. There is some difference in low birth weight live births, in

part related to variations in prenatal care between states. The Centers for Disease Control

has aggregated data on low birth weight live births for 2010. In Vermont the number of

low birth weight babies was 6.1%, in Maine it was 6.3%, in Minnesota it was 6.4% and in

California it was 6.8%. On the other hand in Mississippi the rate was 12. 1% and in

Louisiana it was 10.7% (National Vital Statistics, 2012).

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The fragmentation that is the result of the networked model of service delivery

has led to this lack of horizontal equity and vertical adequacy and as discussed earlier in

this paper, can be seen in abortion data, availability of family planning services, and

public funding of reproductive health care services to women in need of public support.

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CONTINUED

Connecticut

Connecticut

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