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BILL OF HEALTH?
Should the government pass legislation regulating managed care? July 21, 1998 |
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Questions asked
in this forum:
Should Congress pass legislation regulating managed care? What responsibility do employers share in the current managed care problem? What are the benefits of managed care? Isn't the HMO debate really a debate over whether health-care should be affordable and accessible for all? Is there a better system for healthcare and if so, what is it? 
Michael Hovey of Cypress, CA, asks: Should Congress pass legislation regulating managed care? Judy Waxman, director of government affairs at Families USA, responds:
Yes, Congress should pass legislation regulating managed care. Even the insurance industry concedes that consumers should be covered by a basic set of rights. The question is, should the government guarantee those rights to all or should the industry be left to police itself through a voluntary system? Unfortunately, a voluntary system penalizes plans that want to provide high quality care--they cannot survive in a market if forced to compete against unscrupulous companies that cut corners or deny needed care. That is why Kaiser Permanente, Group Health Cooperative of Puget Sound, and HIP Health Insurance Plans joined Families USA Foundation and the American Association of Retired Persons last September in calling for legally enforceable standards to protect Americans in managed health care plans.
Many of the opponents of government regulation of managed care insist that the government should stand aside and let the market work. But there cannot be a free market in health care. Most consumers (61 percent) receive health insurance through work and their employers offer little or no choice of health plan: these consumers cannot "vote with their feet" and change health insurance plans if they encounter problems. The requisite conditions for a free market simply do not exist in the area of health care.
Bill Gradison, president of Health Insurance Association of America, responds:
We think that all of the major proposals currently before Congress will raise costs to consumers and result in hundreds of thousands of people losing or not getting health insurance. To illustrate, you may have read that the Congressional Budget Office (CBO) estimated recently that the provisions in the Democrats' "Patients' Bill of Rights Act of 1998" would raise health insurance costs by four percent across the board.
We believe that the CBO's estimate is far too low, But if you apply it to a 1996 CBO estimate that each one percent increase in health insurance costs cause around 200,000 people to lose or not get to lose or not get health insurance, it means that according to the CBO, 800,000 people could go without coverage due to the increased cost associated with the "Patient's Bill of Rights Act of 1998." Other, more recent estimates indicate that a one percent increase in costs could cause anywhere from 200,000 to 400,000 to lose or not obtain health insurance coverage.
Accordingly, we believe that consumers would be best served if Congress did not pass any of the major legislative proposals pertaining to the managed care industry.
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