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Minnesota, and Texas. 196 Texas law requires that all insurers that offer small-group coveragealso offer limited-benefits policies — 41 in Texas. As of December 31, 2004, these plans had14,000 enrollees in Texas, including 4,000 who were previously uninsured. 197Implementing pared-down benefit packages for Medicaid or SCHIP expansion populationsunder HIFA (Health Insurance Flexibility and Accountability) waivers. This approach is beingfurther refined by the U.S. Department of Health and Human Services and HHS Secretary MikeLeavitt. See the section on Utah in the next part for more information on how that stateincreased coverage while decreasing benefits for some beneficiaries.Allowing group insurance purchasing arrangements or “pools” for small employers. These poolsseek to combine purchasing power and negotiate lower rates from insurance companies orhealth maintenance organizations (HMOs) than each group member could get individually.There are several different types of group purchasing arrangements, including associationhealth plans (AHPs), employer alliances or health insurance purchasing coalitions (HIPCs), andmultiple employer welfare arrangements (MEWAs). The pools can be run by a state agency orestablished by individuals or employers, and may be for-profit or not-for-profit. 198 It is difficult todetermine the exact numbers of these pools since there are different types and they do not allhave to register with any one authority. Texas used to have a state purchasing pool, andcurrently has several private pools. One example of a private pool is the Austin Chamber ofCommerce, which announced in June 2005 that it was developing a pool for its small-businessmembers in the Austin area. Small employers generally express interest in purchasing pools,but insurers are often not interested in working with them. 199 Such pools generally becomeunaffordable over time due to adverse selection.Establishing state-operated high-risk pools for people whose pre-existing conditions andmedical costs make it impossible or too expensive for them to obtain coverage in the privatemarket. Funding to subsidize high-risk pools comes from government revenue or assessmentson insurers. Premiums are generally higher than similar coverage would be in the individualmarket. Thirty-two states operate high-risk pools, including Texas, Arkansas, Colorado, Florida,and Minnesota. 200 More information on some of these pools is contained in the profiles ofindividual states below.Establishing mandates for employers to provide health insurance. Hawaii is the only state withan employer mandate currently in force. It was enacted in 1974, and although somewhat similarmandates were passed in Massachusetts, Oregon, and Washington in the 1980s and early1990s, none was implemented for various reasons. 201 An employer mandate was also part ofPresident Clinton’s health care reform plan in the mid-1990s. This model called for allemployers to pay into regional pools from which employees could choose health plans. 202 Morerecently, California passed the Health Insurance Act of 2003 in October 2003, but this exampleof a “pay or play” mandate was defeated by voters in a referendum in November 2004. This actwould have required employers with 50 or more employees to either offer insurance coverageand pay at least 80 percent towards its cost, or to pay into a state purchasing pool which wouldhave provided benefits for uninsured workers. 203 Requiring employers to offer insurance couldbe found to be in violation of ERISA (the U.S. Employee Retirement Income Security Act of1974), but by offering the option of “play or pay,” and carefully designing other features of aplan, it is thought that a state initiative of this type could withstand ERISA challenges. 204However, these plans are still often controversial.C-3