A few weeks ago I got a couple of e-mails asking about the failure of Hawaii's universal children's health program. Caught up in the election, I forgot to write it up. But yeah, of course it failed. All state attempts at universal health care fail. And they all fail for the same reason. Unlike the federal government, states can't deficit spend. When their economies slow, their tax revenues fall. At the same time, universal health care -- which tends to achieve universality by paying for the poor -- is a countercyclical expense. When the economy sags, more people need subsidies. So when the economy sags, it becomes more expensive. But states can't endure increased expense during economic downturns, and so, always and everywhere, they cut the program. And so it was in Hawaii, where "Gov. Linda Lingle (R), who signed the program into law in 2007, said a state budget shortfall prompted the funding cut. Hawaii faces a projected $900 million general fund deficit by 2011." It's the same story, and what it basically proves is that you can't reform health care on a state-by-state basis. For a longer take on all this, with many more depressing examples of state plans failing (including in Hawaii, actually), see my article Over Stated.
