Health-Care Reform, Managed Competition, and Subnational Politics

"Managed competition" is Congress' likely response to health-carereform. At the center of managed competition are regional healthinsurance cooperatives or alliances. In some states, these allianceswill face daunting numbers of uninsured and underinsured peopleand a hostile reception from business leaders and state governmentofficials. In other states, alliances may be welcomed as a logicalextension of current efforts to expand access to health care.Uneven support for alliances among the states will affect theimplementation of reform, as is typically the case in federallyorganized programs. However, the visibility, power, and financialresources of alliances will also affect state governments. Henceforth,American federalism may include three centers of power, notjust two, and the impact on state politics could be profound.