House GOP Patient Protection Act Ignores The Uninsured

FOR IMMEDIATE RELEASE

February 2, 1999

CONTACT: Richard Coorsh

(202) 824-1787

mailto:rcoorsh@hiaa.org

The following statement was released today by Chip Kahn, President of the Health Insurance Association of America (HIAA):

Sadly, the so-called Patient Protection Act introduced today by House Republicans shows that both parties are equally adept at ignoring the needs of the nation's 43.5 million uninsured.

With this legislation, House Republicans would place additional financial hurdles before the uninsured. Their plan would raise the cost of health insurance by mandating that all health plans have both a point-of service feature and an external appeals process. These provisions might be politically appealing, but the higher costs associated with this government mandate would be passed on to consumers in the form of higher premiums.

Additionally, the House Republicans' legislation reintroduces two highly problematic proposals - "HealthMarts" purchasing cooperatives, and multiple employer welfare arrangements ("MEWAs"). Unlike health insurance plans, HealthMarts would not have to comply with numerous state requirements. As a result, HealthMarts would attract healthier groups, thereby leaving state-regulated group health insurance plans with sicker, higher cost people. Faced with significant premium increases, these sicker groups likely would drop their coverage, leading eventually to the collapse of small group health insurance.

Most MEWAs currently in place provide employers with dependable coverage. However, the allure of MEWAs has been tarnished by a handful that have operated fraudulently, and that have stuck many employers and consumers with hundreds of thousands of dollars in unpaid medical bills. We are concerned that the House Republican legislation would encourage the proliferation of fraudulent MEWAs by exempting them from state regulation.

To its credit, the House Republican package would not allow for punitive damages suits against HMOs. Also to its credit, it contains medical malpractice reform and would expand the availability of Medical Savings Accounts (MSAs). On balance, though, this bill would raise consumers' costs, raise the number of uninsured, and impose more government regulation on the nation's health plans.

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