ERISA Ruling Creates Options for State Reforms

Abstract

FOR SEVERAL years, states interested in expanding access to health care and finding ways to finance it frequently invoked the equivalent of a five-letter swearword: ERISA. Because it broadly preempts state laws that "relate to" employee benefit plans, including health insurance, the Employee Retirement Income Security Act of 1974 is considered a leading obstacle to health system reform at the state level (<i>JAMA</i>. 1995;273:187-188). Only one state—Hawaii—is exempt because its universal coverage program was enacted shortly before Congress approved ERISA. The remainder haven't been able to extract from Congress ERISA waivers that, while aiding states in financing expanded access, might also prove costly to employers. Last April, however, the states got a burst of good news on the ERISA front. In<i>New York State Conference of Blue Cross &amp; Blue Shield Plans v Travelers Insurance Co</i>, the US Supreme Court sanctioned New York's hospital rate-setting program that, in effect, subsidizes