Health Plan Blasted by Restaurant Group

By Wolfe, Lou Anne | THE JOURNAL RECORD, January 20, 1994 | Go to article overview

Health Plan Blasted by Restaurant Group


Wolfe, Lou Anne, THE JOURNAL RECORD


The health care reform proposal by President Bill Clinton is unfriendly to business and could ultimately cost far more than the $331 billion estimate, according to the upcoming president of the National Restaurant Association.

Herman Cain, president and chief executive officer of Godfather's Pizza Inc., currently is association vice president, but will ascend to the presidency in May.

He stopped in Oklahoma City Wednesday as part of a tour around the country to meet with local restaurant and business owners concerning the impact of Clinton's health care reform package.

"I believe the Clinton health care proposal is the worst solution to a problem I have ever seen," Cain said. "That doesn't mean we shouldn't do something in terms of health care reform, but there are things that could be done that are much more palatable, logical and realistic."

The restaurant association objects to the president's plan because "it mandates who you cover, it mandates that you cover everybody and it mandates what you will pay for coverage," Cain said.

Second, he said the plan would set up a new bureaucracy to run the health care system. Third, the plan is estimated to cost $331 billion.

"In 1965, Congress first introduced Medicare at a cost of $5 billion to $6 billion, and indicated it would not exceed $12 billion by 1990," Cain said. "The actual cost was $110 billion. They were off by a factor of 10. What if they miss by a factor of 10 on this? It will be a $3 trillion mistake."

The American economy could not absorb that, he said.

The restaurateurs are backing the Managed Competition Act of 1993 by U.S. Reps. Jim Cooper, D-Tenn., and Fred Grandy, R-Iowa, and U.S. Sens. John Breaux, D-La., and David Durenberger, R-Minn.

Health care coverage under that plan would be portable, according to information prepared by the National Restaurant Association. The plan seeks to limit federal spending, and would phase in new spending "as real savings materialize," the handout said.

The bill proposes insurance reforms, purchasing cooperatives for small businesses and phased-in government subsidies for individuals under 200 percent of the poverty level, as savings are available.

Also in the bill are reforms to limit the amount of premiums that can be tax deductible to employers, a national health care standards commission to determine a standard benefits package, and malpractice and administrative reforms, the association said.

"It will create cost containment in the long term, allowing market competition forces to bring down the costs," Cain said. "We like this bill because it will address the cost component of health care reform, so it becomes more accessible for those 37 million people the administration says don't have health insurance."

Under a managed competition plan, purchasing cooperatives negotiate with health plans based on quality and price to get the highest-quality, most cost-effective products. …

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