Pepper Commission Issues Final Medical System Report : Health: The panel targets people who do not have insurance and provision of long-term care. It splits on funding.


The Pepper Commission released its long-awaited final report on the nation’s health care system Tuesday, bringing to an end 18 months of study without resolving several key issues that divided commission members.

The final report, which largely echoes the commission’s initial recommendations released last March, urges establishing mandatory minimal levels of coverage for employer-sponsored insurance, developing social insurance for long-term home-based care for the elderly, and scrapping the current Medicaid system to shift responsibility for public insurance from the state to the federal level.

“The President and the Congress now have a choice,” said commission chairman Sen. John D. (Jay) Rockefeller IV upon releasing the report. “We can continue to duck our heads and hope this issue won’t bring the nation to its knees, or we can use the commission recommendations as the rallying point for building the political consensus that can make universal health and long-term care coverage a reality.”

The commission, composed of 12 members of Congress and three outside experts appointed by President Ronald Reagan, was formed to examine shortcomings in the nation’s health care delivery system and make specific recommendations for how to reform it.

But while commission members agreed on the goals of health care reform, they remained divided over how to pursue and pay for reform.


Commission member John F. Cohan, past president of the American Medical Assn., said in a dissenting opinion included in the report that “The majority’s proposed solutions to the lack of affordable health insurance and long-term care both suffer from the same fundamental flaw--a failure to specify how they would be paid for.”

The 315-page study reported that “the American health care system is approaching a breaking point.” The commission decided that the two targets for reform should be people who cannot obtain health insurance either through an employer or through public entitlement programs, and the difficulty of providing long-term care to the elderly or disabled.

Commission members found that 37 million Americans lack any form of health coverage and an additional 60 million have inadequate coverage. Of the uninsured, 75% either have jobs or family members who work but do not receive coverage through their employer.

In addition, the report noted that the public safety net formed by Medicaid and Medicare fails to protect many of the nation’s poor. In 1987, the panel found, only 42% of families with incomes below the official poverty line received any benefits through Medicaid.

Commission members agreed that the system must be reformed to provide health coverage for all Americans, and concluded that instead of turning to national health insurance, the best reform route was to strengthen the existing system of job-based health insurance and public coverage for the poor and elderly.

But the panel’s specific recommendations on universal health care were endorsed by only 8 of 15 commission members. Those recommendations include:

--Requiring all employers to provide coverage for their employees. Small employers, who often have difficulty finding health insurance at affordable rates, should be granted tax credits to ease the strain.

--Establishing federally mandated minimum benefit standards that include preventive medicine, including prenatal care.

--To protect the unemployed and the poor, scrapping the current state-based Medicaid system. Instead, the government should replace it with a new system that will provide preventive care and cover groups, such as single people and childless couples, who are currently ineligible for Medicaid benefits.

The commission estimated that this reform program would cost the federal government about $24 billion.

The commission’s proposals to address the problem of long-term care was less controversial. By a vote of 11 to 4, the commission recommended:

--Providing social insurance for all home-based services as well as the first three months of nursing-home care.

--For those who need long stays in a nursing home, establishing a “floor of protection” to assure that a patient’s personal assets will not be depleted beyond a minimal level. Under the plan, once a patient reaches the asset floor, the federal government will pay the rest of his or her nursing home costs.

--Promoting the purchase of private insurance for long-term care.