Clinton's Rx for health care reform.

• Author: Eitelberg, Cathie G.
• Position: Pension and Benefit Report

The President, in a national address, presented his much-awaited plan to reform the country's health care system. Directed at providing universal health care for all citizens and legal residents by 1998 and controlling the growth in health care spending, "The Health Security Act," is expected to cost nearly $331 billion over five years. The administration expects to raise revenues through a combination of expanded coverage, resulting in higher premium collections; new excise taxes; expanded Medicare tax collections; streamlining paperwork; and reductions in Medicaid and Medicare spending. The frequent comment on Capitol Hill has been, "The devil is in the details." The number of questions raised by the proposals continues to grow as the health care reform skeleton begins to take on flesh.

Purchasing Health Care

The cornerstone of the plan would be the creation of state-based health care coverage purchasing coalitions called health alliances. Employers would continue to be the main providers of health care; however, self-employed or unemployed individuals could purchase coverage directly from the alliance. State and local governments, as well as the federal government, would be required to purchase employee health care coverage through a regional health alliance. Private-sector employers with 5,000 or more employees could continue to be self-insured as a corporate health alliance. Exhibit 1 illustrates the proposed system of purchasing health coverage through regional and corporate alliances.

Responsibility for setting up and operating the regional health alliances would fall to the states. These alliances, organized by regions within a state, would 1) offer plan choices, including fee-for-service and managed care programs; 2) negotiate premiums; 3) contract with providers; and 4) disseminate benefits information to enrollees. An alliance could not cross state borders to serve clients, but two or more contiguous states might coordinate the operation of alliances.

Health Plans

Provider networks of hospitals, doctors and insurance companies would be created. These networks, called health plans, would compete to provide health care coverage to the members of the alliances. A federally guaranteed benefits package would include hospital care, emergency care, doctor visits, pregnancy-related services, hospice and home health care, laboratory tests and prescription drugs. Dental coverage would be available to children up to 18 years of age, and...