Congress’ Health Plan Reforms Sound Ample but Prove Anemic

Responding to popular demand, Congress is considering three major plans that purport to address Americans’ fears that their health insurance won’t pay for the care they will need if they get sick.

With expansive titles--the “Patients’ Bill of Rights” and the “Patients’ Protection Act”--the plans are supported by glowing rhetoric from both political parties.

But analyses of the fine print by health-care experts provide a far less reassuring picture of what the plans would do.

One of the Republican plans would provide several highly sought-after guarantees but only for about one-third of the insured population--leaving 110 million people no better off.

The other Republican proposal covers more people but falls short when it comes to helping patients overturn decisions by insurers to deny medical care.

The Democratic plan seems to answer these problems but, by allowing patients to take their health plans to court and recover substantial monetary damages, it runs the risk of increasing health costs.

“There are two huge questions,” said Larry Leavitt, a health care analyst at the nonprofit Kaiser Family Foundation. “How much are people willing to pay for peace of mind, and how real are the protections in the different proposals?”

Moreover, the proposals do nothing for the more than 41 million uninsured Americans.

Driving the congressional debate, which will begin in earnest today when the House takes up competing Republican and Democratic proposals, is widespread dislike of managed health-care plans, including health maintenance organizations. Managed care plans, which now insure more than 75% of Americans, hold down costs by limiting access to specialists, treatments and tests.

Nearly half of respondents to a recent poll by Kaiser and Harvard University said they had been denied coverage they felt they needed or knew someone who felt that way. And 60% complained that managed care had made it harder to see medical specialists and had decreased the amount of time that doctors spend with patients.

The horror stories of people dying or suffering irreparable damage because they did not get needed treatments represent only a tiny fraction of cases. But they have created an impression of a monolithic managed care industry in which every plan cares more about saving money than healing the sick.

“I’m not going to defend any individual story or anecdote, but the media should put them in context with the overall picture of health plans’ contribution to Americans’ health,” said Sam Ho, corporate medical director for Santa Ana-based PacifiCare Health Systems.

The congressional debate went into high gear two months ago, when pollsters of both parties began to say that cracking down on managed care was a political winner.

“There are three or four things--emergency room coverage, the ability to appeal a health plan’s decision, access to specialists--that have a lot of emotional content,” said Robert Blendon, a Harvard University professor of health policy.

To varying degrees, all the bills hit those hot-button issues.

Insurers, however, argue that all the bills would undermine their ability to control health costs.

A high-ranking managed care executive said: “If we go back to the kind of medicine where we’re doing everything for everybody, the country will pay for it.”

The Senate Republican plan offers many of its rights only to the 48 million people in federally regulated, self-insured health plans, leaving state governments to decide how to manage the plans they regulate.

There are two exceptions. The rights to appeal a health plan’s decision and to get information from a health plan would apply to 124 million of the 161 million people with private health insurance.

“The states have done a good job of regulating insurance,” said Sen. Susan Collins (R-Maine), who regulated Maine’s insurance industry as commissioner of professional and financial regulation.

But Ron Pollack, president of Families USA, a consumers’ group, warned that the result would be a “patchwork quilt” of regulation nationally.

To avoid creating a federal bureaucracy, both the Senate and the House Republican plans allow the health insurance industry to pick the independent reviewers who would rule on patients’ appeals of insurers’ decisions.

“It’s letting the fox guard the henhouse,” complained Kim Ross, who works with the Texas Medical Assn.

The House Republican plan extends all protections to everyone in both self-insured plans--those in which the employer rather than an insurance company assumes the risk--and group health insurance plans operated by insurance companies. But it does not cover individuals who buy insurance on their own.

It includes an appeals process enforced by fines of up to $100,000. But some procedures, including bone marrow and liver transplants, cost two or three times that amount, and health plans might find it cheaper to deny treatment and pay the fine.

The proposal sponsored by House and Senate Democrats, which is strongly supported by consumers and doctors, lets patients go to court to recover damages for pain and suffering as well as compensatory damages.

Under current law, a patient can collect no more than the cost of the denied treatment; the family of a woman who died of undetected breast cancer can recover only the cost of a mammogram.

The Congressional Budget Office estimates that the Democratic proposal would raise private health insurance costs by only 4% in 10 years. But some private consultants believe the Democratic plan could prove far more expensive because of such imponderables as the frequency of “defensive medicine”--procedures designed mostly to head off lawsuits.