[Congressional Record Volume 140, Number 64 (Friday, May 20, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: May 20, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
    THE INTRODUCTION OF THE MULTIPLE CHOICE HEALTH CARE ACT OF 1994

                                 ______


                          HON. THOMAS E. PETRI

                              of wisconsin

                    in the house of representatives

                          Friday, May 20, 1994

  Mr. PETRI. Mr. Speaker, today I am introducing a comprehensive health 
care reform bill, which I call Multicare. Actually, it is the latest 
version of a bill I first introduced in 1984. I hope this bill will 
contribute to the critical debate on this issue, for besides provisions 
on which many of us already agree, it contains a number of unique 
elements.
  First, Multicare provides everyone with a contribution toward the 
purchase of a competitive health care plan by converting the current 
regressive tax exemption for employer paid premiums into a voucher that 
varies only by age and enrollment category, not income. Using 1994 
numbers, the average voucher would be at least $1,586 for a couple with 
children, $1,096 for a childless couple, $1,019 for one parent with 
children, and $550 for a single person. This provides a degree of 
universal coverage with no net tax increase.
  In addition, Multicare provides the widest possible latitude for 
market forces to influence the types of health plans offered in the 
marketplace. It does not assume that only certain kinds of plans are 
best. In fact, health plans may offer any cost-sharing arrangement and 
any benefit package which includes at least catastrophic coverage, the 
most readily insurable and cost-efficient coverage. The premium 
contribution--or voucher--everyone receives should go a long way toward 
purchasing at least basic catastrophic coverage.
  Without a standard benefit package, the health insurance market could 
be driven toward minimum benefit plans. Multicare prevents this by 
requiring all plans to pay a portion of premiums into a reinsurance 
pool, which redistributes those payments to plans as compensation for 
covering individuals at high risk for large health care expenses. This 
keeps plans covering higher-risk populations from becoming 
uncompetitive.
  Employers could still pay for employee health benefits and deduct the 
cost as a business expense. In that case, the employee's voucher would 
cover first any premium he owed, and second any cost-sharing incurred, 
with any balance remaining at the end of the year rebated to him. ERISA 
preemption would continue, but all employer plans would have to 
participate in a State or Federal reinsurance pool.
  Like other health reform plans, Multicare provides a big incentive 
for States to sever the link between welfare eligibility and health 
care coverage, by subsidizing care for the poor and near poor on a 
sliding scale according to income. Also, like many other reform plans, 
Multicare includes malpractice reform and administrative simplification 
features.
  But Multicare goes beyond most other bills in the extent of its 
market enhancement features, including patient access to medical 
records, mandatory price disclosure, and publication of the average 
prices prevailing in a market, information on common patterns of 
practice, and indicators of the quality of plans and providers. It does 
everything possible to empower consumers with the financial incentives 
and comparative value information needed to make cost-conscious 
decisions. And it facilitates innovative fee-for-service plans in which 
cost-sharing is based on average prices prevailing in the market and 
consumers have strong incentives at the margin to use lower price 
providers.
  Finally, Multicare proffers simplicity in the health care 
marketplace. With competitive health plans being marketed to all comers 
at uniform prices with no exclusion for pre-existing conditions and 
premiums varying only according to age and personal behavior factors, 
the marketplace should be able to secure the best price for health care 
coverage. There's no need for mandatory health insurance purchasing 
cooperatives, health alliances, or the bureaucracies that accompany 
them.
  In short, Multicare provides access to competitive health plans for 
all Americans with no net tax increase and no employer or individual 
mandate.
  Mr. Speaker, I include a summary of the bill for the Record.

                 Multicare: How Every American Benefits

       All non-elderly individuals receive a government 
     contribution toward the purchase of a competitive health plan 
     that offers guaranteed issue, portability, and no preexisting 
     condition exclusions.
       The government contribution toward health care plan 
     premiums should be enough to cover most of the costs of a 
     catastrophic plan.
       All plans must offer at least catastrophic coverage, but 
     there is no standard benefit package. So there should be a 
     wide variety of health plans from which to choose.
       Health plans may charge a single community premium rate 
     that varies only according to family size, membership in 
     broad age bands, and personal behavior factors clearly 
     related to health care utilization, such as smoking.
       To keep health plans from ``cherry picking'' and appealing 
     only to healthy individuals by offering minimum benefit 
     packages, plans participate in a reinsurance mechanism. Plans 
     contribute a portion of premiums received on behalf of low-
     risk individuals to the applicable reinsurance pool and 
     receive from the pool compensation for covering high-risk 
     individuals.
       Employers may continue to offer and pay for health care 
     coverage, but their plans must participate in the applicable 
     reinsurance pool.
       Consumers have access to comparative value information on 
     Multicare plans, the average prices of health care services 
     prevailing in the market, and physicians' prices and patterns 
     of practice. Plan benefit packages are compared to a national 
     list of standard services to help consumers make choices 
     about which plans are right for them.
       So that they may easily switch providers at any time, 
     consumers are ensured access to their own medical records.
       Various medical malpractice reforms restrain liability 
     costs and ``defensive medicine,'' and uniform claims 
     standards and electronic medical data standards serve to 
     lower administrative costs.


                         medicaid restructured

       A State Multicare Program must restructure the acute care 
     portion of its Medicaid program. States receive federal 
     dollars previously dedicated to acute care services under 
     Medicaid but redistribute those funds and others to the poor 
     and near poor to provide additional subsidies for the 
     purchase of multicare plans.
       In restructuring their Medicaid programs in this way, 
     states make health care coverage independent of welfare 
     eligibility, giving welfare recipients an incentive to choose 
     work over welfare.
       Plan premiums and cost-sharing for the poor and near poor 
     may vary on a sliding scale according to income but are 
     limited to specific ceilings.


                               financing

       Federal and state contributions toward plan premiums are 
     generated primarily by replacing the current tax exclusion on 
     employer paid health benefits with a voucher for all eligible 
     individuals.
       Average employees will be at least as well-off financially 
     as they are today. Existing tax benefits are simply 
     redistributed more fairly, while every consumer benefits from 
     protection against catastrophic expenses, guaranteed issue, 
     portability and the long-term effect of restraining costs 
     throughout the entire system.