Advertisement

Tough Curbs Sought on Health Insurance Costs : Reform: Clinton reportedly wants to link annual premium increases to the consumer price index.

September 08, 1993|EDWIN CHEN | TIMES STAFF WRITER

WASHINGTON — President Clinton intends to seek stringent cost controls on the health insurance industry, limiting annual premium increases to no more than the consumer price index by 1999, informed sources said Tuesday.

In singling out the health industry for mandatory cost controls, the Clinton Administration would take on a powerful group that is clearly bracing for the battle.

Earlier in the day, the Health Insurance Assn. of America, a trade organization here, unveiled a $1.7-million television advertising campaign to fight another aspect of the Clinton agenda: a requirement that virtually all consumers purchase health insurance through government-created and regulated "alliances."

According to sources who spent the better part of Tuesday reading the White House health reform briefing book, limits on insurance premium rate increases would begin in fiscal 1996, allowing rates for that year to increase by the CPI, plus 1.5 percentage points. The index is a government measure of inflation, based on a defined market basket of consumer goods.

By 1997, they said, premium increases would be limited to the index plus one percentage point. By 1998, the cap would be set at the CPI plus half a percentage point. In 1999 and thereafter, the plan would cap premium increases at the level of the index. In all cases, sources said, the caps would allow for population growth.

Sources also said Tuesday that the Administration intends to ask the nation's 32 million elderly to pay nearly $30 a month for prescription drug coverage and long-term care at home or in a community setting as a part of health reform.

But these payments are not likely to be contentious since most seniors now pay many times more than that for outpatient prescription drugs and long-term care.

Under the government-designed standard benefits package, all citizens would receive the same prescription drug coverage, with a $250 annual deductible, plus a 20% co-payment.

According to John Rother, legislative director for the American Assn. of Retired Persons, the drug benefit would be worth up to $35 a month on average for the typical senior citizen. For that, the elderly would be asked to pay about $8 to $8.75 more each month in Medicare Part B premiums.

Rother said the long-term care benefits would be worth as much as $80 a month, and seniors would be asked to contribute about $20 a month. As Administration officials have previously said, the initial services would cover at-home care and care in adult day-care centers and other "community-based" settings.

Rother also said that the Administration is "talking about setting very dramatic targets to bring down escalation of health care costs," including as much as $140 billion less in spending for Medicare over five years.

With the President now definitely scheduled to outline his plan on Sept. 22 in a speech to Congress, and as a part of the Administration's pre-announcement marketing hoopla, Hillary Rodham Clinton is scheduled to meet in the Rose Garden a week from today with 30 or more citizens from around the country who have written to her about their health care problems, sources said Tuesday.

The Health Insurance Assn. of America ad attacks Clinton's health reform agenda for not offering individuals a broader array of plans from which to choose.

Clinton's proposals would have the states organize consumers into large insurance-purchasing alliances that shop among provider networks for the best price and quality. Each of these alliances is expected to offer a variety of plans for its members to choose from, such as fee for service and health maintenance organizations.

But Bill Gradison, president of the industry group, said that consumers should be given "the right to choose their own health plan," even if that means allowing people to purchase insurance from plans outside the alliances.

Advertisement
Los Angeles Times Articles
|
|
|