GOVERNMENT & MEDICINE

Insurance access plans could backfire for patient rights

Some groups fear that inclusion of the health insurance access provisions could jeopardize passage of the patient protection legislation facing Congress.

By Susan J. Landers, AMNews staff. March 13, 2000.

Washington -- Parts of the patient protection legislation designed to encourage uninsured people to purchase coverage could actually result in less access to health insurance for many people, several consumer, religious, health and disability groups recently warned.

The caution flag was raised as House and Senate lawmakers were about to begin negotiations aimed at ironing out the differences between the two bodies' Patients' Bill of Rights measures.

Among the provisions in question are the expansion of medical savings accounts and health insurance tax credits, and the development of "healthmarts" and "association health plans." Healthmarts and association plans would allow small businesses and individuals to join together in larger insurance pools to bring down the cost of coverage.

Critics of these access provisions, led by Families USA and Consumers Union, claim that only the healthiest members of the population would find them attractive, while the sickest would be left behind in a more expensive, less stable market.

President Clinton also has spoken against these provisions and raised the threat of a veto if they are ultimately included in the patient protection bill.

Patient protection best focus

Many think the patient protection provisions in the bill should be the legislation's main focus and that the access provisions could prove a distraction that stands in the way of consensus.

"Anything added to the package that generates controversy in its own right is going to make it all that more difficult to get the PBR piece through Congress and signed into law," said Robert Doherty, senior vice president for government affairs and public policy at the American College of Physicians-American Society of Internal Medicine.

On the eve of the first House and Senate negotiating meeting, scheduled for March 2, AMA President Thomas Reardon, MD, said the Association was focusing its efforts on the passage of a bill that includes strong patient protection measures.

"We want a strong bill of rights that we can all support and that the president will sign," he said.

Access proposals similar to those in the congressional bills factor strongly in the AMA's plan to expand health insurance, although the Association has not taken a formal stance on the bills' access provisions.

The AMA favors medical savings accounts as an option that would expand patients' freedom to choose from an array of health plans. The savings accounts allow individuals or small businesses to purchase cheaper high-deductible insurance and put the premium savings into accounts used to pay routine medical expenses.

MSAs have not been popular with consumers. Fewer than 100,000 of a congressionally authorized 750,000 accounts have been sold so far, according to the Internal Revenue Service.

Tax credits also play an important role in AMA plans to expand health coverage, and the Association praised a provision in the House bill that would allow individuals who buy their own health insurance to deduct 100% of the cost from their taxes by 2007.

But the AMA has developed a separate proposal that would go further than the House and Senate bills and replace existing tax preferences for employer-sponsored health insurance with a system of refundable tax credits based on the individual's or family's health insurance spending.

The AMA's proposal also supports the formation of insurance purchasing cooperatives that could include small businesses, trade associations, chambers of commerce and religious groups.

Although healthmarts could be a step toward that goal, AMA Executive Vice President E. Ratcliffe Anderson Jr., MD, in the past has cautioned the provision's sponsor, Rep. John Shadegg (R, Ariz.), that physicians should be adequately represented on a healthmart board of directors.

Association health plans could provide more choice among health plans to patients, Dr. Anderson said. But he noted, "Our ability to support AHPs would be conditioned upon the need for adequate oversight."

Healthmarts and association health plans did not receive high marks in a recent Congressional Budget Office study. Only 330,000 currently uninsured people likely would take advantage of the two options, said the study. Those who continued to purchase traditional insurance likely would face a premium increase of about 2%.

ACP-ASIM's Doherty agreed that the access provisions in the House and Senate bills are modest and are not likely to help many of the nation's 44 million uninsured gain coverage. "We would like to see Congress take up a more effective package than what's in the bill right now," he said.

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The House and Senate patient protection bills include several provisions aimed at expanding health insurance access.

Medical savings accounts: Both bills would lift MSA restrictions to encourage individuals and families to purchase these savings accounts coupled with high-deductible insurance policies.

Tax credits: The House bill would allow tax deductions for health insurance premiums. Both House and Senate bills allow deductions for some long-term-care insurance.

Association health plans: The House bill only would permit trade, industry or professional associations to offer health insurance that could preempt state benefit mandates. The insurance could be offered to small businesses and the self-employed.

Healthmarts: The House measure only would allow creation of these purchasing pools, similar to association health plans except that geographic location would define membership.

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Additional information

Box: Insurance access enhancers