GOP Patient Protection Act Ignores The Uninsured
February 2, 1999
CONTACT: Richard Coorsh
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
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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