National health care reform ills could result in a local cure.

• Author: Eitelberg, Cathie G.

Many an autopsy will be done on the corpse of national health care reform. While the cadaver is examined by health care policy coroners, its spirit lives on in the hope of reincarnation. And that hope is not in vain. Health care changes, albeit in a less comprehensive form, will continue to be a main issue at the local, state and federal levels of government. And state and local governments may have many lessons to learn from 1994's extended debate and health care reform's death by a thousand cuts.

Issues That Are Not Going Away

Americans will spend nearly $1 trillion for health care services in 1994. If prices continue to rise unchecked, this number will double shortly after the turn of the century, a level of spending that will claim nearly 20 percent of the nation's gross domestic product and redirect investment away from economic growth and development.(1)

Data show that five million Americans have lost insurance coverage in the last five years. Today, an estimated 39 million Americans have no health insurance, or 14.7 percent of the total population.(2)

The national government's interest in controlling health care expenditures will be driven by its desire to contain the cost of federal medical entitlement programs and their impact on the federal purse. Financing pressures also will push states and localities to make health care changes, many of which will be aimed at bringing spending under control, extending coverage to reduce cost shifting and convincing the citizenry that care will be available when needed.

All the federal proposals that were under the Congress' consideration in 1994 would have drastically changed the way health care benefits are provided and financed. Issues of particular concern to state and local governments in the 1994 proposals, and likely to be alive when health care reform is resuscitated in the next Congress, are the following:

* limits on self-insurance,

* restrictions on pooled purchasing arrangements,

* changes in benefits tax policy,

* revisions to insurance laws and

* establishment of a standard benefits package.

Limits on Self-insurance. In most of the reform packages, self-insurance generally was limited to large employers with a requisite number of employees. The threshold number ranged from 100 to 5,000 employees. Employers not meeting the mark would be prohibited from self-funding benefits and would be required to purchase benefits on the open market or through a government certified purchasing alliance.

Restrictions on Pooled...