Newspaper article The Christian Science Monitor

Insurers Quibble with Reform's Details

Newspaper article The Christian Science Monitor

Insurers Quibble with Reform's Details

Article excerpt

PRESIDENT Clinton may have dropped the idea of a national health insurance system, but the nation's 1,500 private insurers are still tentative about the alternatives.

With annual health care costs rising at twice the rate of inflation, 37 million Americans uninsured, and another 100,000 losing their insurance each week, even the most conservative industry analysts admit that the status quo cannot last. The point of contention with the White House is how much change is needed, and how fast it should be implemented.

For the last five years, the industry has pushed a package of reforms that includes guaranteed access to health insurance, elimination of exclusions based on preexisting health conditions, support for managed care over the traditional fee-for-service model, and the creation of portable insurance, which would allow employees to carry insurance with them from job to job.

Some industry analysts say implementing these reforms, along with an overhaul of the government's Medicare and Medicaid systems, would be enough to bring the system under control. Other analysts are less certain.

"No one knows what would happen if we did those reforms and waited five years," says Edward Howard, president of Alliance for Health Reform. "The problem is we don't have five years. Health care costs are going up $100 billion a year, and the causes of the market inefficiencies are much more complex than cost shifting" - from Medicaid to patients with private insurance.

The Clinton proposal embraces the industry's reforms, but only as part of a comprehensive overhaul termed "managed competition." It would encourage health maintenance organizations (HMO), create consumer purchasing alliances, impose overall budget caps, and implement community rating.

"The devil will be in the details," says Richard Coorsh, spokesman for the Health Insurance Association of America (HIAA), that represents 270 insurers. "We want to see reforms that would allow market decisions to be made by the marketplace."

The most controversial point in Clinton's proposals is a budget cap. "If it comes out heavy on price controls we will not be supportive," says Gary Fendler of Aetna Insurance Company. …

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