Rep. McDermott introduces H.R.3241: State-Based Universal Health Care Act

Statement Introducing the State-Based Universal Health Care Act of 2015

Rep. Jim McDermott, U.S. House of Representatives, July 28, 2015

Mr. Speaker, I rise today to introduce legislation that will give states the tools they need to guarantee the health security of their citizens. The State-Based Universal Health Care Act of 2015 establishes a new procedure through which states may apply for a waiver of federal law in order to design and implement single-payer health care systems. This will allow states to achieve universal coverage and control costs by removing greed and inefficiency from the system.

One of the many achievements of the Affordable Care Act is its provisions that grant states the authority to innovate in their health care systems. Under Section 1332 of the law, a state may apply for a State Innovation Waiver that will provide it with control of federal dollars that otherwise would have been spent on premium tax credits and cost-sharing reductions for its residents. Through this waiver, a state may design a system to cover its residents, so long as benefits are at least as comprehensive and affordable as those offered by Qualified Health Plans available on the Exchanges.

However, even with this flexibility, numerous barriers limit states’ ability to design true single-payer systems. Existing waivers are narrow in scope, requiring states to seek out imperfect and convoluted solutions to circumvent federal limitations. A sweeping preemption provision in the Employee Retirement Income Security Act (ERISA) denies states authority to regulate employer-sponsored health plans. And, due to the complexities of our existing federal health programs, it is essentially impossible for a state to design a single benefit package that can be administered simply and efficiently on behalf of all of its residents.

The State-Based Universal Health Care Act removes these barriers. It builds upon the ACA’s State Innovation Waiver by offering states new tools that will allow them to truly innovate in health care. Under this legislation, a state may apply for a Universal Health Care Waiver that will grant it authority over federal health care dollars that otherwise would have been spent on the state’s residents. To the extent necessary to design a universal system, a state may waive provisions of federal law relating to the following:


  • The rules governing premium tax credits and cost-sharing reductions, as provided for in existing waiver authority under Section 1332 of the ACA.
  • Provisions necessary for states to pool funds that otherwise would be spent on behalf of residents enrolled in Medicare, Medicaid, CHIP, TRICARE, and the Federal Employee Health Benefits Program.
  • ERISA’s preemption clause, which currently forbids states from enacting legislation relating to employee health benefit programs.


Any state seeking a Universal Health Care Waiver must design a system that covers substantially all of its residents. The benefits that each citizen receives must be at least as comprehensive and no less affordable than what would have been provided under any federal health programs for which its residents otherwise would have been eligible. Once enacted, the state plan must be publicly administered, and it may not add to the federal deficit.

The Affordable Care Act was a landmark achievement and a strong first step toward achieving health security in this country. However, we still have a tremendous amount of work left to do. The United States spends by far the most per capita on health care, yet we fail to achieve superior outcomes or even guarantee coverage as a basic human right. Insurance companies are a powerful force in our economy, enjoying billions in profits and growing power in the marketplace. Meanwhile, hospitals are consolidating at an astonishing rate, raising new questions about the quality of patient care and the future of medicine. What’s more, we have failed to make meaningful efforts to combat the skyrocketing costs of prescription drugs, threatening patient access to treatments and the financial sustainability of the entire system.

As we explore ways to build upon the successes of the ACA, it is critical that we look for creative solutions to the challenges that still exist. Granting states tools to design single-payer systems will help spur necessary innovation, achieve universal coverage, and control costs. It is time to take this next step as we continue to move forward in our historic effort to guarantee the health security of every American.

H.R.3241: State-Based Universal Health Care Act of 2015:



By Don McCanne, MD

State efforts to establish single payer systems have had difficulties because the existing waiver processes for use of federal funds have been quite limited in their scope, and ERISA restrains state regulation of employer-sponsored health plans. The workarounds have been difficult and are a major reason that several states with promising proposals have backed off on their efforts.

Rep. Jim McDermott has now introduced H.R.3241, the State-Based Universal Health Care Act of 2015, which would allow states to include in a universal health insurance risk pool all funds that are currently used for federal health programs, including Medicare, Medicaid, CHIP, TRICARE, FEHBP, and the subsidies for plans in the ACA exchanges, plus, by eliminating ERISA restrictions, states could establish a more equitable method of financing in replacing funds currently paid into employer-sponsored plans. Those crafting state single payer legislation would have a field day if H.R.3241 were to become law, though they would face many other technical issues which will not be addressed here.

What could be wrong with this proposal? Conservatives are dreaming of the day that they can receive Medicaid funds as block grants to the states. It does not take much imagination to think what they would do with those block grants, especially when you look at their current behavior. The Medicaid waivers they are requesting both privatize the program and shift more costs to the patients, and some governors are even refusing federal funds, calling instead for block grants over which they would have much greater control. Under H.R.3241, essentially all federal health program funds would granted to the states in what would be, in essence, block grants. Although the Act calls for universality, comprehensiveness, affordability, and public administration, clearly the conservatives would game the system, much to the detriment of patients.

We really do need a national single-payer health program, and that is why we cannot allow ourselves to be diverted from supporting legislation such as H.R.676, the Expanded & Improved Medicare for All Act, introduced by Rep. John Conyers, now with 51 cosponsors. Whatever else we do, our advocacy for a national program must be steadfast.

As we work on trying to change the politics on the national scene, it certainly would be reasonable for state reform advocates to continue their efforts. Some in the trenches hope that conservatives would be attracted to shifting more control to the states through legislation such as this. But keep in mind the risk of this as we watch the suffering of low-income individuals and families in those states that already refuse to collaborate with Medicaid, in spite of the gift of federal funds.

Another risk is that if H.R.3241 gains traction, single payer supporters may abandon national efforts, just as they abandoned single payer support when the "public option" was under consideration. Abandoning a national effort in deference to your own state increases the risk that our brothers and sisters in other states would be left out.

Everybody in, nobody out.