Competing health plans take shape

July 04, 1994|By John Fairhall | John Fairhall,Washington Bureau of The Sun

WASHINGTON -- You're probably among the majority of Americans when it comes to health reform, suffering from cerebral gridlock over the dizzying proliferation of plans.

Which one's best for you? The question is more timely than ever. After weeks of committee fighting, the congressional reform debate shifts to the full House and Senate, which hope to act before a recess in mid-August.

As confusing and complex as the plans are, some conclusions can be drawn:

* All the major plans would provide insurance subsidies to very poor people and bar insurers from denying coverage to those with health problems.

* People with good employer-paid insurance are unlikely to be helped in the short run by any reform plan; some might pay higher premiums at first. But, in the long run, each plan holds out hope of protecting the public from exorbitant premiums and loss insurance due to unemployment, illness or a change of jobs.

* Employers with no more than 50 workers would receive help from all plans -- either through subsidies or the chance to buy insurance through purchasing pools that negotiate with insurers.

Yet these generalizations gloss over striking differences among the plans. On the question of controlling rising health costs -- the reason why most uninsured people don't have coverage -- the plans offer solutions ranging from intensified competition among insurance companies to governmental caps on premium increases.

Some plans would have Congress or a national commission define benefits packages that all insurers would have to offer, to ensure minimum standards and make comparison shopping easier. But the plan put forward by Senate Republican leader Bob Dole would require insurers to offer a standardized package only to the poor.

The differences reflect the opposing philosophies behind the plans, which fall into two categories: (1) Do it now and (2) Go slow.

The "do it now" plans, like President Clinton's, would cost the most and guarantee all Americans insurance within a few years, with employers picking up most of the tab. The bills passed by the Democrat-controlled House Ways and Means and by the Senate Labor and Human Resources committees embody this aggressive approach, spelling out a right to health care the way Social Security guarantees retirement and disability income.

"Go slow" plans, such as the one drafted by Mr. Dole with the support of most GOP senators, take a less costly and more conservative tack. They emphasize the role of the marketplace over that of government. Such plans would subsidize insurance for low-income people and make it easier for other Americans to voluntarily buy and keep coverage, but without government guarantees.

Another "go slow" plan, developed last week by the long-deadlocked Senate Finance Committee, creates a commission that would recommend action if, by 2002, market reforms and subsidies for the poor haven't covered 95 percent of Americans.

Bitterly divided, proponents of each approach trash the alternatives. The National Federation of Independent Business, representing small employers, warns of a "damaging loss of jobs" if a Clinton-style plan is passed because of the cost to businesses. On the other side, the consumer advocacy group Families USA charges that any plan that doesn't guarantee universal coverage "sticks it to the middle class."

Differing opinions

Each view is colored by differing opinions of the status quo and the consequences of inaction.

The White House emphasizes that 15 percent of Americans have no insurance at all. Mr. Clinton criticized the Dole plan Thursday, saying, "It does a little bit for the poor; it leaves all the powerful vested-interest groups with everything they've got."

Mr. Dole, stressing that 85 percent of Americans already have some coverage, cautions against costly reforms that might do more economic harm than good. The GOP plan is a "gentle first step," said Sen. Bob Packwood, an Oregon Republican who helped write it.

Many Americans view health reform through the prism of personal experience, polls show. Those with good employer-paid benefits are warier of "do it now" plans than are people with poor coverage or no coverage. While surveys show support for universal coverage, they reveal diminished enthusiasm for the Clinton plan.

One reason why it's so hard to achieve consensus on reform is that no one knows for sure how each plan would affect consumers, employers and the federal budget deficit. Even a cautious plan such as Mr. Dole's is a leap into the unknown. As simple as it sounds, the plan could have unforeseen effects.

His proposed purchasing pools are a case in point. Hailed by proponents as the answer to premium inflation, they haven't been tested on a large scale and could fall short of their goals.

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