Shadegg/Coburn Proposal Helps Lawyers, Hurts Consumers


August 25, 1999

CONTACT: Richard Coorsh

(202) 824-1787

The following statement was released today by Donald Young, M.D., Chief Operating Officer and Medical Director of the Health Insurance Association of America (HIAA):

Representatives John Shadegg (R-AZ) and Tom Coburn (R-OK) are drafting a so-called "patient protection" bill that instead will provide Members of Congress with political protection at the expense of consumers. Sadly, despite ample evidence to the contrary, both continue to insist that their so-called "Health Care Quality and Choice Act" would not raise costs. In fact, their bill would impose additional government mandates – the cost of which would be passed on to consumers in the form of higher premiums – even though both belong to a political party that normally eschews expanding government.

Make no mistake. Mandates – no matter how well intended – raise the cost of health insurance. Already, nearly one quarter of the nation’s 43 million uninsured Americans lack coverage because the cost of mandates. The Shadegg/Coburn proposal, under the guise of quality improvement, would mandate a process that would allow trial lawyers to sue health plans. This would add more fuel to the cost inflation fire, and would benefit trial lawyers without improving the overall quality of care. If Reps. Shadegg and Coburn truly are interested in improving the quality of care, they should instead support the efforts of managed care plans to provide "best practices" information to providers and to eliminate the wide disparity that exists in the way that different doctors treat the same conditions.

In addition to benefiting the trial lawyers, the Shadegg/Coburn bill would impose other costly mandates. For example, the bill would mandate that health plans pay for out-of-network care delivered after a medical emergency, and would mandate that health plans provide an out-of-network option to people with certain kinds of HMO coverage. These options may sound good on paper, but in the real world they cost money at a time when consumers are eager to see their coverage costs reduced.

The private health insurance industry cannot provide consumers with lower cost coverage in the face of ever-expanding government mandates and escalating medical and prescription drug costs. Representatives Shadegg and Coburn should not attempt to gloss over how their legislation would raise consumers’ costs, and to remember that cost is the primary reason why most of the nation’s 43 million uninsured lack coverage.




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