Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, February 8, 1995 TAG: 9502080029
SECTION: EDITORIAL PAGE: A-7 EDITION: METRO
SOURCE: RICHARD E. MARTIN
DATELINE: LENGTH: Long
Why should we reform a system that provides the best health care in the world? Because we are all vulnerable when annual health-care cost continues to rise 14 percent a year compared to a 2 percent to 3 percent increase in inflation. Additionally, the number of Americans without health-care insurance is increasing at an alarming rate.
Middle-income people ($15,000-$60,000) cannot afford insurance premiums for health care unless they are in a group plan, and even one major illness can destroy a small group. Hence, we have 38 million Americans not covered. The very poor are covered by Medicaid and the rich have the cash and/or a group plan.
People in small groups and on individual policies have found their premiums rise disproportionately, often to unaffordable levels. For example, my wife and I are retired. Our Trigon Blue Cross Blue Shield of Virginia Personal Health Care Individual Standard 1 family policy costs $825.26 a month. An even better family policy is available from Trigon to retired federal employees for a total monthly premium of only $392.88. This dramatically illustrates the economic advantage of a group plan compared to an individual policy. Incidentally, the taxpayers are picking up the tab for $290.72 of the $392.88
Even large groups (General Motors, General Electric etc.) will become vulnerable if costs cannot be contained. Recent publicity about business backing away from carrying retirees on group plans reveals a threat to this ever-growing number of Americans. The loss of a job and health-care benefits is commonplace these days.
The insurance industry appears to be a large part of the problem. The recent adverse publicity concerning Trigon Blue Cross Blue Shield of Virginia revealed a $5 million fine for misleading policyholders (Roanoke Times & World-News Oct. 20, 1994). In the same article, it was estimated that nearly 620,000 customers may be eligible for refunds due to excess co-payments by subscribers.
As a personal note, after I complained, Trigon Blue Cross Blue Shield of Virginia admitted, in writing, that they had charged $90,872 more than they had paid against my lifetime maximum. To their credit, they made the appropriate adjustment.
To address the problems set forth above, national health-care reforms should:
Establish plans of insurance for all Americans that are modeled after the various comprehensive plans offered members of Congress. According to the Washington Post, the speaker of the House, Newt Gingrich, pays $101.25 a month for a comprehensive plan, while the taxpayers pay the balance of the premiums of $303.77. All Americans should be offered coverage as good as and at no higher price than Congress. If that is not affordable, then Congress' plan should be reduced until it can be the model.
Require Medicare and Medicaid to provide the same coverage as the plan above to simplify and prevent differing coverages among the poor, employed, unemployed, disabled and retired.
Require standards be adopted by each state and all regulation be the responsibility of the 50 state commissioners of insurance (decentralized approach). After all, this layer of overhead is already in place, and tons of costs can be saved by not building a big Washington bureaucracy. The threat of another large bureaucracy in Washington combined with employer and employee mandates were probably the major reasons for the significant opposition to the Clinton plan.
The states already regulate Workers Compensation and Medicaid. Why not health insurance? I strongly advocate decentralization as opposed to centralization proposed by President Clinton.
Empower the states to develop state or regional groups. These groups should be large enough to negotiate affordable premiums with the insurance companies. I envision them to contain millions of people and result in a significant cost savings.
Eliminate pre-existing condition exclusions and lifetime maximums.
Assure portability.
Make premiums fully deductible for tax purposes.
Establish government income-based tax credits for lower-income Americans, with these credits being paid through our tax system (withholding) in order to hold down the bureaucracy.
Help establish free-market competition by requiring the state commissioners of insurance to publish suggested (not mandatory) charges to consumers for the various health-care services. These charges should be readily available to consumers so services could be shopped, such as occurs within a true free-market system. This, in turn, should promote competition and help to control costs.
Require employers to provide employees access to a state or regional group plan, but make employers' payment of premiums option. Employees' participation would be optional, but a waiting period would be required for those not signing up when access becomes available. This is to prevent people from waiting until they become ill before enrolling.
Require all consumers, to the extent they are able, to pay a deductible and co-insurance.
Allow business to provide access to a better plan than the model discussed above, but not a lesser one.
Allow the patient freedom to choose providers.
Be self-funding with the exception of Medicaid, which is welfare.
Establish standard forms and procedures. There are approximately 1,500 health-care insurance companies plus the government, all having different forms and procedures. Standardization would result in a significant cost reduction, simplification of the process and make it more difficult for insurance companies to abuse the system.
Include medical IRAs.
Provide tort reforms.
There is wide congressional and public consensus on the elimination of pre-existing-condition exclusions, health-insurance portability, tort reform, tax adjustments and income-based subsidies for low-income individuals. I urge Congress to move quickly in 1995, on a bipartisan basis, to enact these reforms, which would provide immediate help to a large number of Americans.
The rest of the reforms should be passed by Congress and signed by the president before the end of 1995, since we are all at risk and some Americans have actually been forced into bankruptcy to receive necessary medical care.
Richard E. Martin, a retired senior vice president and controller of Dominion Bankshares Corp. in Roanoke, was 6th District Republican Party chairman from 1980-83 and 6th District campaign chairman for President Reagan.
by CNB