More details on health care reform emerge

Business & Health, July, 1993

Delayed again until later in the summer or possibly early fall, the Clinton administration's health reform plan continues to evolve. The newest wrinkles as of mid-June:

* If health benefits get taxed at some level, companies may be allowed to pick up all or most of the cost of workers' copayments for the federally guaranteed standard benefit plan using fully deductible and/or employee pre-tax dollars. Employers would then only be taxed on benefits that provide medical care beyond that prescribed in the minimum standard health care package.

The White House is reported to be focusing in on the 1993 standard Blue Cross/Blue Shield plan for federal workers, which has a 25% copayment for doctor's services, a $200 annual deductible per family, a separate $250 deductible for hospital services and a $3,000 limit on annual out-of-pocket expenses.

* The tax cap, if one is imposed, would not necessarily be set at the cost of the lowest-priced plan in a given area. Instead it may be calculated on the basis of the average price for several plans combined.

* If the administration calls for a payroll-based premium as the method by which employers would pay for their workers' health insurance, states may be able to set the premium rate, which could range from 8% to as high as 16% in states that have a low-wage base but very high medical expenses.

* Doctors, hospitals, and pharmaceutical companies are likely to be asked to voluntarily freeze their prices for at least a year and possibly two years.

* Insurance premium increases will be limited to the consumer price index, plus an unspecified amount. Whether that condition will apply to employers that are allowed to opt out of health insurance purchasing cooperatives, is still undecided.

* States will probably bear the onus of health care budgeting. Health expenditure targets will be set for each state. After a few years grace period, if a state spends more than its target, federal penalties would be imposed upon that state.