Editorial for Dec. 6, 1999

Health insurance reform: More choices for patients

The AMA's proposal would allow for the continuation of employment-based insurance, while providing new sources of coverage for employees, their families and the uninsured.

The issue of health insurance coverage has reclaimed the media and political spotlight as candidates for election in 2000 stake out their policy positions. Their rhetoric has been accompanied by new data showing continuing increases in the number of uninsured people in this country and consumer dissatisfaction with some health plans.

Against this backdrop, the American Medical Association has come forth with a new proposal for reforming the private health insurance system. As outlined in a new booklet, "Choosing Health Insurance That Best Meets Your Needs," the AMA's recommendations are based on three key reforms: individually selected and owned health insurance, a tax credit for health insurance expenses, and the formation of new health insurance purchasing groups.

The AMA's proposal would allow for the continuation of employment-based insurance, while providing new sources of coverage for employees, their families and the uninsured.

In the United States today, consumers have few choices when it comes to health insurance; only 17% of companies offering this coverage to employees and their families provide a choice of plans. Under the AMA's proposal, employers would be encouraged to provide employees the money now being spent on their health insurance so employees could choose a health plan that best meets their personal needs.

As an example, an employer might give each employee $3,000 to be spent on health insurance. An employee could opt for a plan completely covered by the $3,000 or select a plan with additional features, for which he or she would pay personally.

The tax credit provision is another key feature of the AMA plan. It calls for an employer's contributions to employees' health insurance to be reported as income by the employee, and a portion of the amount the employee spends on health insurance -- including the employer's contribution -- would become a tax credit that is subtracted directly from the person's tax bill. The amount of the tax credit would decrease with higher incomes, thus giving lower-income people greater access to health insurance.

Through the formation of voluntary choice cooperatives, the AMA plan would broaden the availability of the savings inherent in group coverage, and would guarantee an individual's choice of health plan regardless of where he or she is employed and whether he or she changed jobs.

Instead of proposals by big-government advocates that focus on tightly controlled and limited programs, the AMA's recommendations present a sound approach to revising the existing health insurance system. Americans would have greater freedom and flexibility in making decisions about how their health care dollars are spent. At the same time, employers would be relieved of some difficult insurance-related decisions they now face and would be assured of a more stable cost structure for employee benefits.

The employer-based health insurance system has served this country well for many years. The AMA's proposal would not dismantle that system. Instead, it would correct many of the problems that have developed in the current financing structure without any negative impact on the quality and value of the world's finest health care system.

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The text of the proposal can be found on the AMA Web site's Health Insurance Reform page (http://www.ama-assn.org/advocacy/healthpolicy/reform/reform.htm) Complimentary copies also are available by writing AMA, "Choosing Health Insurance," Room 13243, 515 N. State St., Chicago, IL 60610.

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