Health-Care Cost Reforms Offer Benefits, Drawbacks
Kristof, Kathy, THE JOURNAL RECORD
EDITOR'S NOTE: This is the second in a six-part series by L.A. Times Syndicate columnist Kathy Kristof on the health-care crisis. Affordable health care has become a rallying cry for millions of Americans dissatisfied with rapidly escalating prices and seemingly deteriorating care.
In response, President-elect Bill Clinton has promised to propose workable reform within the first 100 days of his presidency. And a variety of state and federal legislators are formulating reform plans of their own.
These plans are sure to incorporate some components that have been investigated and debated in the past, experts say. They all promise to have a significant impact on individuals and are likely to require tradeoffs. Some may reduce out-of-pocket expenses, for example, but increase unemployment. Plans that don't impact employment could push up tax rates.
Here are snapshots of plans likely to emerge, their potential benefits, drawbacks and estimated costs. National Health Insurance would set up a huge health insurance pool, administered and paid for by the federal government. Private employers would be able to eliminate their health-care programs in favor of the national system, which would provide equal coverage regardless of employment status or income. Proposals vary on what would be covered, co-payments and deductibles. But most would cover standard procedures, emergency care, prescription drugs and some would provide for mental health care. In some cases, co-payments and deductibles would be limited to a percentage of income.
The benefits: Everyone would have at least some health insurance. Administrative costs would probably decrease because there would be only one standard claim form and no duplicated insurance coverage. Companies could save money by dropping their employee health policies.
The drawbacks: Some would end up with bigger deductibles and co-payments and more limited coverage under the national plan than under those currently sponsored by employers. Income taxes could rise to pay the cost.
The cost: Estimates vary wildly, from a savings (to the federal government) of some $25 billion to an annual cost exceeding $30 billion, according to the Employee Benefit Research Institute in Washington D.C. The differing estimates stem from different assumptions about savings from cutting paperwork vs. the potential cost of caring for additional people. Employer Mandates require companies to provide at least a minimum health insurance package to their workers. However, most of these plans exempt particular groups from the law. For example, one plan would require all companies with 25 or more workers to provide health insurance but exempt those with fewer employees. …