HMO REFORMS: Would Add ‘Modest’ Costs, Study Says
The Patient Access to Responsible Care Act (PARCA) -- Rep. Charlie Norwood's (R-GA) proposal to give managed care consumers added rights and protections -- would add an extra $40 per year to the typical family policy, according to a new independent cost analysis conducted by Coopers & Lybrand. Commissioned by the Kaiser Family Foundation, the study also found that implementing President Clinton's health care bill of rights would add $31 to the average family policy. Estimating the average yearly cost for a family's policy to be $5,160, the study found that the cost of a typical HMO policy would increase 0.61% under the president's provisions and 0.77% under Norwood's provisions (the impact would be even less if applied to traditional fee-for-service or PPO plans because the proposed consumer protections would not apply as strongly to such policies, the reports says). "This study suggests that most of the consumer protection provisions in the bills currently before Congress will have modest price tags," said Kaiser Family Foundation President Drew Altman. "There should be plenty of room to find common ground as the legislative process moves forward," he said. However, PARCA's most controversial measure -- one that would allow consumers to sue their health plans for denied treatment -- was not included in the study because "researchers were unable to attach a dollar figure to this measure" because of the "high level of uncertainty regarding its potential impact."
Show Me The Money
The Coopers & Lybrand analysis detailed how much each consumer protection would cost per person. Both the Norwood and Clinton proposals would require plans to disclose greater information to consumers, but Clinton's disclosure provisions are more extensive than Norwood's, costing an estimated $6.00 per year compared to about $1.20 for PARCA. The measure in both bills requiring plans to cover emergency room visits based on a "prudent layperson" criterion would cost about $1.20 annually. Both PARCA and the Clinton bill of rights would give consumers greater access to specialists. Norwood's specifications would only add about 24 cents per year, the study found, while Clinton's more specific standards applying to women's health services would add 12 cents. Adding another $1.20 to health plans would be both proposals' provisions to allow consumers to seek third-party appeals for denied services. Finally, PARCA would allow consumers to pay higher costs to choose out-of-network health care providers, adding $6.96 to an annual premium.
The analysis concludes that the "speed with which the proposals are adopted will likely depend on how readily the provisions are seen as high performance standards." Further, the analysis states: "Some smaller health plans, and health plans that operate in areas with lower levels of competition can be expected to be less likely to adopt the provisions. Ultimately, some portion of managed care enrollees may remain enrolled in plans that do not offer these types of provisions. We believe that plans that operate in areas with high levels of competition will ultimately be forced to adapt ... to remain competitive. Health insurance purchasers have become increasingly demanding, and have rapidly expanded the use of quality measures in evaluating health plans." To obtain a copy of the report, call the Kaiser Family Foundation's publication request line at 1-800-656-4533 (ask for document #1391). The press release detailing its findings is also available online at www.kff.org (Kaiser Family Foundation release, 4/22).
Dissention Within The Ranks?
Despite insurance and managed care industry pressure on House GOP leaders "to head off PARCA," today's Washington Times reports that Republican lawmakers are "stuck" with Norwood and his bill. "We've got to just keep plugging along," said Norwood yesterday. The Times reports that Norwood has "delayed a plan to present the newest version of the legislation, but ... plans to be back." He said, "I didn't come up here to go along to get along." Rep. Thomas Bliley (R-VA), who is proposing legislation that would "make it easier for small businesses to provide health insurance to their employees," is working with Norwood "on a strategy to present the two plans to GOP leaders." In "head[ing] off" PARCA, Republican House leaders have formed a task force -- on which Norwood and Bliley sit -- to draft alternate legislation. Rep. Dennis Hastert (R-IL), chair of the panel, said "any bill that reaches the House floor" will come from his group. But, according to the Times, Norwood said "he will continue to push" his own bill. "What if the task force doesn't produce? Am I going to say, 'Gosh. I wish I hadn't waited until August?'" One leadership aide, who spoke on the condition of anonymity, said Norwood "is hurting himself ... by continuing to press legislation outside the task force." The aide said, "It is one thing to express your opinion at the table, it is another thing to go outside the room and kick your heels and raise a dust storm to try to taint the process." Norwood said "that he has met repeatedly" with House Speaker Newt Gingrich (R-GA) and has "heard no words of reprobation" about pushing his own legislation (Godfrey, 4/22).