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FIRST LADY HILLARY RODHAM CLINTON
NORTH CAROLINA WASHINGTON ISSUES SEMINAR
CANNON HOUSE OFFICE BUILDING
JUNE 14, 1994
TALKING POINTS
[Acknowledgments: Rep. Bill Hefner, who started the seminar; and
Reps. Stephen Neal, Tim Valentine, Martin Lancaster, and Charlie
Rose. Note: Gov. Hunt will not be present but you might want to
acknowledge is contributions ono health care issues]
*
The viability of businesses in North Carolina, and across
the country, depends on our ability to get control of our
economy. That's why health care reform is so critical.
*
Over the past eight years, health care costs for American
businesses have almost doubled. Today, businesses that cover
their employees also pay for those who don't -- shifting about
$25 billion a year onto those with private insurance.
HOW REFORM WILL WORK FOR BUSINESSES
*
Businesses will have an active role in setting up health
plans for their workers.
*
Market forces will help control costs by bringing market
forces to bear in the health care system
*
Businesses will benefit from administrative savings by
reducing regulation that eats up 15 cents of every dollar
*
Back-up premium caps will limit growth in what businesses
and individuals pay for the comprehensive benefits package
*
Shared responsibility, payroll caps, and tax deductibility
will make sure that businesses don't bear an unfair burden for
healthcare financing.
WHAT REFORM MEANS FOR BUSINESSES
*
Leading CEOs say reform will help competitiveness
*
No more corporate cost-shifting, no more corporate freeriders
*
A stronger national economy
1
�TOBACCO STATE CONCERNS
*
Tobacco accounts for about 20 percent of North Carolina's
total crop income and represents about 8 percent of the state's
economic output.
*
The President's approach tries very hard to balance the
Administration's concerns about tobacco growers against the
health consequences of tobacco use. Smoking raises medical
expenditures and increases the burden on public .and private
sources of health care funds.
*
*
Tobacco taxes are a fair way to support health care.
A tobacco tax increase of 75 cents per pack would save about
900,000 lives.
WHAT REFORM WILL MEAN FOR A STATE AS DIVERSE AS NORTH CAROLINA
*
RURAL HEALTH About 49 percent of the state's population
lives in rural areas. Many rural residents suffer from doctor
shortages and an uneven distribution of primary care facilities.
In Casewell County, the physician-to-resident ration was 1 to
7,400 in 1989, meaning most county residents must go elsewhere
for hospitalization and treatment of serious illnesses.
*
The state is a leader in rural health efforts, having been
the first to establish an office of rural health in 1973. The
state has also funded a system of primary care clinics in
underserved areas.
*
Reform will offer unprecedented incentives to bring health
care providers to rural areas -- through tax incentives,
scholarships, loan forgiveness programs, and workforce
initiatives.
*
ACADEMIC HEALTH CENTERS North Carolina has very
sophisticated medical care through its advanced medical centers,
notably Duke Medical Center, the North Carolina Memorial Hospital
(in Durham), Pitt Memorial in Greenfield, and Baptist Memorial in
Winston-Salem.
*
Health care reform recognizes the crucial role of Academic
Medical Centers in training physicians and in providing state-ofthe-art care.
*
VETERANS The state has 14 military bases cmd about 160,000
military personnel. Reform will give veterans more choices about
how and where they receive their care.
FISCAL IMPACT OF REFORM ON NORTH CAROLINA
2
�*
With reform, the state can save at least $902 million,
according to an HHS state-by-state analysis.
*
The state would save at least $787 million between 1996 and
2000 in expenditures for Medicaid and community-based long-term
care.
*
Employers in North Carolina that now offer insurance will
pay $387 million less in premium payments by the year 2000 than
they would without reform
NORTH CAROLINA HAS ALREADY LAUNCHED SOME OF ITS OWN HEALTH CARE
INITIATIVES
*
The health care reform act of 1993 establishes insurance and
delivery reforms, including voluntary purchasing pools, a basic
benefits package, and adjusted community rating for small groups.
Insurance reforms include guaranteed renewal, portability, and
rating bonds.
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FACSIMllE 1RANS~SSION SHEET
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First Lady Hillary Rodham Clinton
The White House
washington, o.c. 20500
oear Mrs. Clinton:
we know that the demands on your time are extreme, but we a:r:e
convinced that this would be time well spent. Please consider that
our combined congressional ciistricts literally span the length and
breadth of our state. The approximately 350 people who ~ttend each
year represent virtually every segment cf our business community -from farming to microprocessing to medicine to newspaper
publishinCJ,
Most of those attendinq also hold. positions cf
community leadership. This would be an exciting opportunity for
our constituents.
But we are convinced that this would be an
excellent opportunity for you and the Administration to reach cut
to these influential citizens.
This seminar has always attracted high level officials from the
federal qovernment, including the President's cabinet, the supreme
court and congressional leaders.
Speakers to the 1993 Washington
Iss~es Seminar, for example, included secretaries Bentsen, Shalala,
Jesse Brown, Attorney General ~eno and .Ambassador Kantor. This was
tha first year since launohinq the proc:~ram that we were able to
introduce to our constituents members of
a Democratic
Administration.
All the speakers were well received and the
comments from our constituents that followed were very encouraging.
�•
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page 2
First Lady Hillary Rodham Clinton
Thank you.
Sincerely,
w· h.~ w~
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H. MARTIN LANCAS ER 1 MC
CHARLIE ROSE, MC
�Extended ·pege
MOH
16:00
0123
P.02
THE WHITE HOUSE
WASHINGTON
March 16, 1994
The·Honorable Scephen L. Neal
House of Representatives
2469 Rayburn House Office Buil~ing
Washington, D.C. 20515·3305
u.s.
Dear Representative Nealz
Thank you for your kind letter inviting Mrs. Clinton
to attend and address the annual Washington Issuee Seminar on
June 14, 1994. She greatly appreciates your hard work and
dedication to your constituents.
·
Since it is difficult to know what the Firat Lady's upcoming
official schedule will ba, I am unable to make a commitment tor
her at this time. While it is unlikely Mrs. Clinton will be able
to accept your invitation, please be assured that we will keep it
in mind and contact you if we can accommo~ate your request.
Mrs. Clinton appreciates your
best wishes.
1. 3
thoughtf~lness
and sends her
Since:-ely,
Patti Solie
Special Assistant to the P:·esident
Director of Scheduling
tor the First Lady
�THE WHITE HOUSE
WASHINGTON
MEMORANDUM FOR PATTI SOLIS
FROM:
LORRAINE MILLER
DEPUTY ASSISTANT TO THE PRESIDENT FOR LEGISLATIVE
AFFAIRS
SUBJECT:
NORTH CAROLINA DELEGATION
Enclosed please find a letter from the entire Democratic
delegation from North Carolina asking Mrs. Clinton to speak at
their Washington issues conference June i4.
This request is very important to -the delegation (and this
delegation is very important to the President's legislative
agenda) and Legislative Affairs asks that it be seriously
considered.
·
If you have any questions, please call me at x66620.
I would appreciate it if you would let me know your further
response to the delegation.
�Extended Page . ·. 1.. :1
W.G. (BILL) HEFNER
DIITIUCT Of'FICIIo
In< D15TRICT. fOOIITH CAAOI.INA
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April 20, 1994
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First Lady Hillary Rodham Clinton
The White House
Washington, D. C. 20500
Dear Mrs. Clinton:
We wrote to you on February 16, 1994, inviting you to speak to
our annual Washington Issues Seminar on Tuesday, June 14, 1994. We
enclose a copy of the letter for identification purposes.
A response to our invitation was received from .Patti Solis of
your staff indicating ·that is. ·was unlikely that you could accept our
request for the reas~ns set forth in her letter.
We realize the many demands made on you, as \iell as the problem
in scheduling events far in advance. Nevertheless, we strongly urge
you to rec"nsider. We remain convinced that this event affords the
Administration a unique opportunity to reach out to a very
influential segment of our districts. Significantly, our combined
Congressional districts literally span the length and breadth of
North Carolina.
Mrs. Clinton, we are committed to the success of the Clinton
Administration. Considering the Seminar will be held during the
height of Congressional consideration of ~he President's most·
important proposals, we believe your participation will help our
constituents understand the hard decisions we all must make.
With highest personal regards, we are~~
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Congress of tbt Wnittb
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Mafbinifan, Jl( 20515
February 16, 1994
First Lady Hillary .Rodham Clinton
The White House
Washington, o.c. 20500
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Dear Mrs. Clinton:
On June 14th, we will be hosting the annual Washington Issues
Seminar on Capitol Hill for businesspeople from our five
congressional districts. We would consider it a high honor and a
personal favor if you would join us that morning to address our
constituents.
We know that the demands on your time are extreme, but we are
convinced that this would be time well spent. Please consider that
our combined congressional districts literally span the length and
breadth of our State. The t:.)?proximately 350. people who ...ttend each
year represent virtually every segment of our business community -from farming to microprocessing to medicine to newspape:r
publishing.
Most of these attending also hold positions of
community leadership. This would be an exciting opportunity for
our constituents.
But we are convinced that this would be an
excellent opportunity for you and the Administration to reach out
to these influential citizens.
This Seminar has always attracted high.level officials from the
federal government, including the President's cabinet, the supreme
Court and congressional leaders.
Speakers to the 1993 Washington
Issues Seminar, tor example, included Secretaries Bentsen, Shalala,
Jesse Brown, Attorney General Reno and Ambassador Kantor. 'l'his .was
the first year since launching the program that we were able to
introduce
to
our constituents
members
of
a
Democratic
Administration.
All the speakers were well received and the ,,
comments from our constituents that followed were very encouraging.
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uslness leaders about the ainton plan and its implications for business in states like
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Liz Bowyer
ngressmJ Bill Hefner started the Washlngton Issues Seminar about 10 years ago
an effort tb strengthen his political position with business leaders from his district
lnce then, Oongressmen Stephen Neal, Tim Valentine, Martin Lancaster and Charlie
oee have joined the annual seminar, which consists of a reception with the North
Una Democratic delegation, and a half day of briefings with top governmental
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etween 300'and 350 participants representing a broad cross section of the North
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e tmpact ot"teform: on business, with some emphasis on the tobacco industry.
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11:51 No.001 P.13
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Nortl\t:<cat-olina is badly in need of health care reform,
but ~e leqislature has been unwillin9 to adopt
compi'eherisive reform. Rural residents, employees of small
busi~esses, and farm workers are hardest hit by the problems
of t • h.alth care system. Reform legislation passed in
1993 established the North Carolina Health Planning
CommL•sion, and starting in 1994, the commission will work
to d4Velop a plan for expanded coverage in the state.
Althqugh the 1994 abbreviated legislative session will be
limi~ed to budgetary issues, work may proceed on developing
commdnity health districts to oversee the delivery of
services and local health regulations, as recommended by the
Heal~h Planning Commission.
The Governor is also expected
to pJtlasent ·a report on the consolidation of health functions
in o~ d•p•rtment.
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A su yey'of 207 doctors in November 1993 showed that 38%
want ~ to keep the current system, 37% wanted managed care
refo . s bomparable to the HSA, and 25% wanted a single-payer
syst•m llke Canada. sixty-nine percent were dissatisfied
with~be:current reimbursement methods.
Pediatricians and
rura~·physioians were more likely to prefer the single-payer
syst·~~ Gtemming from the belief that managed care cannot
workl~n tu~al areas.
RefoJ.ts
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JUN 14'94
~h~t.have
already been initiated by the state are in
those in the President's proposal. Targeted areas
have included rural care and access, and
oomp.titton omong providers/vertically integrated plans in
urba~'areas such as Mecklenburg County.
As the state moves
towa~ comprehensive reform and universal coverage for all
Nortl\;.Carolinians, its efforts will be bolstered by national
line~ith
of r~form
::f:!:uX.,rbing to note that with about 50% of the sti.te
desi4nated as rural and/or underserved areas, the state's
unin re" population mirrors the national average. How is
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The mitigating factor is probably that the
number of the state's workforce is in manufacturing
companies ~ companies that typically provide health coverage
for fbeit •mployees.
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l:SSUBI OJI CONOBRN WITH THE HEALTH SECURITY ACT tN NORTH
cuo~!~•".
batCQ.. Industry
and tbJI. TQblJgco Xax in North carolina
runs the length ~nd breadth of the state. Almost
250,QOO (1 in 11) North Carolinians work directly or
indirectly in tobacco production and trade. ·Tobacco
acco~hts for roughly 20% of the state's total crop income.
Tobaqoo's overall economic value is approximately B% of the
stat.. 's economic output. The North Carolina Department of
Aqri4Ultur• stated that an increase in the tobacco tax of
$0. 7!j; would mean an annual loss in revenue of approximately
$9,400 for ·each tobacco farm. Needless to say, tha tttobaoco
1ssu$~ 1n North Carolina is a political hot button, not only
ror tbe President, but also for local officials.
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- The tax on tobacco will ensure that those
smoke pay for the health costs that smoking c~uses.
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The HSA tries very hard to balance the
Administration's-concerns about the tobacco
growers ... a9ainst the health consequences of
tobacco use, the need to discourage use among
young people, and the belief that tobacco taxes
are ~ fair way to support health c~re.
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smoking both raises medical care expenditures
over the smoker's lifetime, with costs rising the
more one smokes, and increases society's
expenditures for medical care as well as the
uurden on public and private sources of funds.
Reductions in the number of persons who ever smoke
ana the amounts smoked will benefit all payers of
medical care, decreasing the financial obligations
of both public and private sources ·or funding.
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A tobacco tax increase of $0.75 per pack,
over time, would save about 900 1 000 lives. A $2
pack increase would save about 1.9 million lives.
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has a very large rural population- slightly
of the state's total population. Many of the
stat6's small counties suffer from an uneven distribution of
primary care facilities and doctor shortages. In caswell
county, tor ex~mple, the physician-to-resident ratio was 1
to 7,'400·in 1989. For serious illnesses requiring
hosp~alization, residents must leave Caswell to receive
prop~ care.
A major concern among North Carolinians
appe~s to be bow to attract physicians to and keep them in
Nort~:carolina
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unde.,a ~anaged competition model.
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The HSA provides affordable, secure health
oare that can never be taken away.
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The HSA provides workforce initiatives, such
as tax incentives, increased reimbursement,
retraining, scholarships, and loan forgiveness
programs, for doctors to locate in underserved
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·Response - The HSA develops strategies for delivering
~and financing health care. in rural areas, making care
inore easily affordable, and attracting doctors and
nurae• to and keeping them in rural areas.
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Through developing and expanding systems of
oare, the HSA allows 1) states to require health
plans to cover all or specific parts of a regional
alliance area as a condition of contracting with
an alliance, 2) alliances to offer incentives to
health plans to encourage them to provide coverage
in rural areas or to help establish new plans, and
3) rural providers to be eligible for transitional
protection as essential community providers.
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The HSA requires essential community provider
certification to assure that rural hospitals will
be integrated into health plans.
•
The HSA increases access to care and provides
adequate choice of providers and plans by
expanding the system's capacity and increasing the
number of primary care providers, especially in
Underserved rural areas. For example:
•
The HSA builds on the strengths of
successful programs, such as community and
migrant health centers, which receive
increased funding to expand the number of
people they serve.
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Through the new capacity expansion
program, funds are authorized for 1)
integratinq into the reformed system of care
providers who now care for the low-income
people and 2) helping them work together and
negotiate effectively with plans. Grants and
loan guarantees are also available to help
rural providers establish new:practice sites
and renovate existing sites.
•
The essential provider provisions help
assure the viability of health care providers
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who have been successfully serving vulnerable
populations by requiring that health plans
contract with all certified essential
providers in their area.
! .. ·~
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A five-fold expansion of the National
Health Service Corps' field strength and tax
incentives for non-NHSC primary care
providers will help assure that there are
more people providing care in underserved
areas.
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Through a new flexible enabling service
program and additional services from existing
PHS programs, the HSA provides outreach,
transportation, translation, and non-medical
case management to ensure that underserved
populations will be able to overcome nonfinancial barriers to care.
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The HSA encourages health networks and
cooperative relationships_which are key to the
managed competition approach.
•
Technical and financial assistance will
be provicted to develop networks. This will
help the rural communities that need outside
expertise to establish links with larger
referral centers and academic health centers.
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Grants will be provided to support the
development of telecommunications links
between underserved providers and other
providers, health care center~ and
institutions.
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New grants will be provided to academic
health centers to help build information and
referral infrastructure needed to support
rural health networks.
•
It is important to note that the HSA affords
states the necessary flexibility to design the
health care delivery system that best suits their
•peoific needs •
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11 Business
A la ~e population of individuals are employed by small
busirl•ss arid/or agricultural companies. Since North
Caro~lna is not densely populated and many farmers and small
busi~~ss e~loyees do not receive coverage through work, the
stat~:has a significant number of underserved and uninsured
- ju~t over 29% and 16%, respectively. In fact, of the
stat,rs working uninsured, about half work for small
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11:46 No.001 P.OS
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busiJesses.
Businesses in rural areas across the state are
small employers.
almo1~ e~clusively
lftesponse - It is important to note that the HSA
'provides subsidies for small businesses, provides
~discounts
up to 80% for businesses with'less than fifty
and creates large purchasing pools that
~enabl• small businesses to get the same deal as large
!businesses from the insurance companies •
~employees
' ..
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•
The gradual phase-in of and subsidies for
small business will allow all small businesses to
cover their employees without the burden of
exorbitant premium costs.
.
•
Insurance companies will have to accept all
who apply for coverage.
•
The HSA makes it illegal for health plans to
raise premiums if an employee gets sick.
•
Administrative costs will be drastically
reduced because the regional health alliance will
assume the administrative burden for the small
business - administering benefits, enrolling
employees, negotiating and renewing coverage, and
barqaining for reasonable coverage.
,1,
Htdi~Sd·
2, 785,000 North Carolinians were Medicaid recipients.
In tH• same year, the state spent more than $2 billion on
Medi,.j!lid: payments - just over 15% of the state 1 s annual
bud9 t:. ·
t:. .
.
;~esponse - The HSA will integrate Medicaid into the new
•ystea and help relieve states' fiscal pressures.
In 1
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Integration of Medicaid into the new health
care system will provide substantial fiscal relief
to state and local governments.
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current non-cash
assistance Medicaid recipients will no longer rely
on Medicaid for their health coverage. They will
be provided coverage through the alliances based
on their employment status, like e~eryone else.
.
•
Medicaid will make payments to health plans
on behalf of AFDC and SSI cash recipients based on
prior levels of spending for these populations in
a state. Payments to alliances will be tied to
the rate of growth of the budget rather than
higher levels currently projected. This will free
up state resources for other pressing concerns.
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11:47 No.001 P.06
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with limited coverage, North carolina
sophisticated medical care. The most advanced
i;;
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medioal centers are located in urban areas - and near
univ,rsity campuses - out of reach for many of the states
residant•. Notable medical institutions include the Duke
MediOal Center in Durham, the North carolina Memorial
Hosp~tal in Durham, Pitt Memorial/ East Carolina Medical
Center ih Greenfield, and the Baptist Memorial Hospital in
Winston-salem. While these institutions initiate research
and ~erform innovative, specialized medical procedures, they
are •taffed with many health care specialists and often have
h1qh1f ~a~ average medical costs.
f·ltesponse - Under the HSA, academic health centers will
~continue
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The HSA sets aside a portion of all health
insurance premiums specifically for academic
health centers. Resources will be channeled to
centers by a formula that recognizes each center's
contributions to education, research, and patient
care.
I
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to train physicians and provide state-of-the-
::;
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While most Americans will not obtain regular
care at an academic health center, .the HSA ensures
that every American has access to the specialized
oare offered at an academ1c health canter if
conditions warrant such treatment.
I
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Health plans will cover the costs of routine
patient care associated with research conducted in
academic health centers. This will enable
academic health centers to continue to develop the
advanced and highly specialized care they provide
today.
With
mili
l4
military bases in the state, and about 160,000
personnel, out of a total population of about 7
mill~bn, a significant number of North Carolinians are
elig ·ble for medical care through Veterans hospitals. The
Vate ans Affairs Medical Center in Durham treats about 9,000
inpa~ients and 120,000 outpatient a year. ·Under the current
syst~ll\, VA hospitals are required to provide .'free care to
specific groups of veterans, including those with serviceconn•pted problems and those who are low-income. Other
veterans can use VA facilities if space and resources are
avai~able.
Under the HSA, veterans with duty-related
problems.or limited funds would continue to receive free
care,'While all others would have equal access, with a 20%
copa~ent.
This change, though appealing to veterans, is of
conclr:n ~o some administrators of Veterans hOspitals who
.~ry
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11:47 No.001 P.O?
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fear;that the hospitals will not have the capacity to meet
the
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of the additional patients.
f
'
~ResPc>nse - 'rhe HSA will give veterans more choices
iabout how and where they receive care. The plan will
'preserve veteran benefits, increase veteran health care
:!system flexibility, and maintain specialized services.
~he·vA will become a health plan option to all Veterans
~while also contracting out for care to provide for
~edditional
Veterans.
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Low income Veterans and those with serviceconnected disabilities currently served by the
Department of Veteran Affairs will receive the
benefits they do today.
•...
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•
Congress will continue to fund specialized
services. Low-income Veterans and those with
service-connected disabilities will have access to
these specialized services whether.or not they
enroll in a VA health plan.
i
~.
•
In areas where Veterans' plans exist,
Veterans who are not currently eligible for care
through the VA will have the option of enrolling
in Veterans' plans to receive the comprehensive
benefits package. Veterans who enroll in a feefor-service plan may obtain health care through
the VA system. Under that arrangement, they will
be responsible for any contribution required.
•
The HSA provides the following financial
provisions to aid VA hospitals:
•
VA's resource base becomes a combination
of federal appropriations and revenues.
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VA will be permitted to receive health
alliance payments, enrollee premiums, copays
and deductibles, and retain all third-party
collections.
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VA can borrow from a federal revolving
fund to assist with health plan start-up
costs.
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Under the HSA, unnecessary reporting
requirements and inspections that currently burden
VA institutions and providers will be reduced,
fraAing VA providars to concentrate on patients
~~ther than paperwork.
;.
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•
VA managers will be allowed to control
budgets without traditional restrictions of line-
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11:48 No.001 P.08
ttems or earmarked funds, and delegate more
tlexibility to VA clinics and hosp~tals.
I
XI. PISCAt IMPACT OF THE HEALTH SECURITY ACT IN NORTH CAROLINA
L
Undet! the HSA, North Carolina stands to save at least $902
million - as reported in the state-by-state analysis
cond~oted by HHS.
tl
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:•North carolina would save at least $787 million between
1996~and 2000 in expenditures for Medicaid and communitybase4:long~term care.
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::Aa an employer, North Carolina would save $115 million
2qpo alone.
!~mployers
in North Carolina'that currently offer
will pay $387 million less in premium payments in
the year 2000 than they would without comprehensive reform.
insu~ance
.
,
·~
.
•
in North Carolina who are emplo;ed by firms
that~urtently offer insurance will pay $775 million less in
premium payments in the year 2000 than they would without
refo~.
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:
RBL~ HIALTR CARE REFORM EFFORTS AND PROGRAMS
rbe J~raldS-Bazell-Fletcber HeAlth ~e Reform Act ot 19~~
The Act creates the North Carolina Health Planning
Commt•sion (see below). The Act also establishes insurance
and delivery system reforms including creating voluntary
purc~asifig pools, a basic benefits package, and adjusted
community rating for small groups. Insurance reform
inclddes guaranteed renewal, portability, and rating bands.
The ~Qt establishes the State Health Plan Purchasinq
Alliance·Board with various administrative and procedural
duti6a including creation of a single Alliance (Health Plan
Purc~asinq Alliance) within each designated market area.
The ~ct further contains provisions for a Certificate of
Public Advantage program; medical school funding tied to
inor~aing primary care specialties, with strategies
desi~hed.to raise the graduation rate to 60% in state
schoO,ls; hospital authority territories; prescription drug
labelling and counselling; disposal of hospital surplus
propdrty; payments for medical records costs; and special
cont~Qt~nq for Medicaid.
Nort~~Cato1:1.na
..... :
.
Healt:h Planning Conun;!osion
In 19,.93, the North carolina Health Planning Commission was
creaUGd to design a universal coverage proposal to be known
as ti· North Carolina Health Plan. The Commission is due to
repo .· on .l\.pril 1, 1994 and April 1, 1995. The commission
met :ce:in 1993 but seems reluctant to take any further
acti~h until Congresa votes on federal health care reform
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11:49 No.001 P.09
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legislation.
a
The
Commis~ion's
Executive Director is to
for the Plan to the legislature by
Sept$-ber 1994. Republicans are concerned that the
Demod~atic headed commission will be too partisan.
pres~~t
ti~etable
f'
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Impl~aentation of the Commission's Plan can only take place
if orle of the following conditions is met:
•' I
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•:
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a national mandate for universal coverage takes
effect
exemptions and waivers for ERISA, Medicaid, and
Medicare are obtained
a determination is made that universal coverage
oan be implemented within existing laws without
hurting the state's economy
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elements to be included in the plan include:
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budget targets
cost containment measures
risk-adjusted rates
better services for rural and underserved areas
.Preparation of outlines for implementation
~;
«tal~ ~§s
Forum
Spont:lored by North Carolina's Institute of Medicine, the
Forum released a two part proposal on universal access to
care ~and cost containment. Key to the proposal's approach
is k~eping health care delivery in the private sector
throd9h the concept of managed competition. The proposal
reli~• mainly on elements of managed competition such as
Commdhity Health Plans and purchasing pools to achieve the
two 90ala. The proposal included the following
reco,encla"Uions:
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a single-payer system
(1% income tax and 4%
payroll tax)
Health Policy Commission that would define
benefits in the basic package, qualifying CHPs,
and making appropriate r~commendations to the
General Assembly (e.g., Medicaid waiver)
cost containment through managed competition,
medical practice parameters, expansion of primary
and preventative care, and standardized claims
forms
the expansion of Medicaid and a waiver for
enrolling recipients in CHPs
&!
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'l'he ~gialelture rejected the overall reform f·ramework while
adoptinq matly components of the reform proposal in 1993.
,.
• i.
Deep 'e ts problems with the rural underserved, North
Caro · na·ia a national leader in the area of rural health.
It e . ablished the first state Office of Rural Health in
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11:49 No.001 P.10
~'
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1973 ..~
In the last 20 years this office has established a
stat~ funded system of primary care clinics located in
unde#aerved areas that are predominately staffed by
phys£bians assistants and nurse practitioners.
i~
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.
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Nortticarolina was also one of the first states to establish
an effeoti~e statewide system of Area Health Education
Cent•~s (AHECs).
These serve as training sites for health
prof~asion students and as sources of continuing education
for practicing health professionals. Additionally, the
Resi4$nt/Student stipend Program, a partnership between
madioal schools and the state, is designed to support AHECs.
This·~rogram attracts medical students across the country to
do tijeir residency training in North carolina while
prov~ding a flux of new primary care providers for rural
comm~hities.
Moreover, 1993 legislation created provisions
in w~ich medical school funding is tied to increasing
prim~y care specialties - to raise the graduation rate to
60% ~~ sta~e echools.
ff
A hi~ priority for Governor Hunt is the development of an
info~ation highway.
This system would link major medical
centers throughout the state via a fiber optic network.
Nort~ Carolina is also developing a telemedicine system
which would use high resolution pictures to allow
prof.asionals in urban and academic hospitals to communicate
withfli~ics in remote locations.
•..
~·
The
Sf"olina
Access Program
.
The
ate recently began a Medicaid managed care program
that ;serves 105,000 of the state's Medicaid recipients - 20%
of t~ose eli9ible for the managed care program. The
carot!na Access Program provides primary care physicians for
Medidaid recipients. It is currently available in 17
coun~ies - to be expanded to all counties by 1995.
According to Rod Finger, Assistant Deputy Commissioner of
Insurance, the program has experienced some co·st reduction
and some improved care. The program will continue to
expaJ\~.
F
Nortl'l'carolina's Medicaid agency will implement a universal
inunul'\~Zation plan approved last year and continua efforts to
redude infant mortality rates through the recruitment of
OB/G~~s, .outreach and intensive case management.
~.
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Asheville Area Chamber of commerce members outlined their
Heal~ Link plan to the state Health Plan Purchasing
Alliance Board on 4/18/94. The plan would allow businesses
with 'fewer than 50 employees in western North Carolina to
form la health insurance purchasing cooperative. Health Link
orgarllzers are hoping to enroll 1,400 small businesses with
more !than 1.1, ooo workers in the first year. ·The chamber is
aski~ t~e state for $500,000 to establish the alliance and
run i~ for the first two years. After three years, the
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COMMIRESEARCH
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~,;,_ Percentage of population underserved (29.6%)
19th,.., Percentage of population uninsured, 1993 {16.4\)
25th ·• Medicaid expenditures as a percent of state budget
(15.4%)
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Percentage of population covered by Medicaid (8.9%}
Medicaid payment per recipient {$2,654)
35th~~
35th~
Percentage of population enrolled in HMOs (5.5%)
MediJaid. ,
785,~0 : ·
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$2,08) 1 000 1 000
Medicaid payments, 1992
$2,654
- Medicaid payment per recipient
15. 4t'
- Medicaid expenditures as a percent of state
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budget, 1992
65. 9~,.r
... FMAP, 1993
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alli.nce wo~ld be self-sufficient and financed by charging
each ~mployee $1/month for administrative costs and
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•THE WHITE HOUSE
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White House Office of Commwtications Research
OEOB Room 197
Washington. D.C. 20500
Tel. (202) 456 .. 7845
Fax (202) 456·2239/2539
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15:17 No.004 P.04
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15:16 No.004 P.02
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�Talking Points For Hillary Rodham Clinton
Meeting With Health Care Leadership Coalition
May 12, 1994
I want to thank Henry Simmons, Paul Rogers, Peggy Rhoades, and all of you for your
leadership. I'm sorry that Bob Ray couldn't be here today, but I also want to thank him
for all his work.
•
The thing that is good about being here in a group like this is that I don't have to go
through the usual pitch I make about how we must recognize our health care crisis and
move towards a comprehensive solution.
•
You came to that conclusion before I even joined the debate here in Washington.
•
Your proposal for health care reform, first introduced with your report in 1991,
contained several key elements. I want to read you back these key elements, as
described by your deputy director Mark Goldberg in a February 1993 op-ed piece in
the Washington Post:
•
A requirement that employers assure coverage for their employees and a
commitment -- with adequate public financing and a firm schedule -- to the
phase-in of insurance for those outside the workforce.
•
Initiatives to increase the market power of health care consumers.
•
Incentives to create more, and more efficient, provider groups.
•
Tough cost controls to keep spending in bounds.
•
Measures to simplify health insurance, including a standard benefits package, a
single claims form, and electronic billing.
•
Steps to improve the quality of care and reduce the amount of unnecessary or
inappropriate treatment, and to help consumers judge the quality of care offered
by competing provider groups.
•
I take the time to read this back to you because we must make no mistake about it:
each of your elements is in the President's proposal -- something we can say about
none of the other proposals before the Congress.
•
Now is the time that we must really move forward. You have played a vitally
important role in coming forward with a consensus proposal early on, in bringing
together providers, labor, and business leaders to address this issue. And as an
independent, bipartisan voice, you have made a wonderful contribution to the debate.
�Ia.
..... '-"
~-
;;;_.,
•
But at this critical time in Congress, if you really want those elements that you
outlined in your proposal, now is the time to take a stand.
•
Speak out for those elements of your proposal and of the President's that we know
must be a part of meaningful reform:
for health benefits guaranteed at work;
for strong cost-containment -- in both the public and private sectors;
for guaranteed private insurance for every American.
•
Work with the committee chairmen like Congressman Rostenkowski, and the key
members of the committees, and tell them that we cannot back away from this
challenge. And I want to say a special word here to the Republicans in the room -your support is especially important because we cannot make this a partisan issue.
•
And when those who are not as dedicated as Cong. Rostenkowski try to water down
comprehensive reform, you tell them, as you have been saying for years, that you can't
address one piece of the puzzle without addressing them all. Remind them. as you say.
that reform must be comprehensive. addressing access. quality and cost. It cannot be
done piecemeal.
·
•
We need your voices to get out this message. To get out the message that health care
reform will be good for business, for workers, for providers.
..
Tell the American people, tell members of Congress, that you believe in the simple
premise that every job should have health benefits. That all Americans who get up and
go to work every day, should have a job that comes with health benefits. No matter
what· you do or where you work or how much you make.
•
That's why you believe that all businesses should take some responsibility for
providing insurance to their employees.
•
There are a number of other specific things you could do to help at this critical point
·
in the debate.
1) Do media events with members of Congress over the Memorial Day recess. Invite
members of Congress to your business to talk to your employees about the importance
of health benefits guaranteed at work.
2) Write op-eds in regional newspapers. And make your voices heard on radio, TV
shows.
3) Lobby members on key Congressional committees.
•
I want to close by thanking you for working with us up to this point, and say that I
remain confident that if we work together, we can get this done.
�l
·."- _____ .....,
LARGE EMPLOYERS AND HEALTH CARE
OVERVIEW
"Successful implementation of health care reform is one of the best
pieces of news American business could receive. "
[Henry Aaron, Brookings Institute, CBS , 9/28/93]
SUMMARY:
Over the last eight years, per worker health care costs for American businesses
have almost doubled. But most American corporations agree that every job
should come with health benefits, and they have continued to provide coverage
for their workers and families, despite ever-rising costs. In today's system
however, businesses that cover their worker's and their worker's families pay
for those companies that don't-- shifting up to $25 billion dollars each year
onto those with private insurance. Rising health care costs are also eroding
the ability of US. companies to compete in the global marketplace, and
siphoning dollars away from new capital investments. The President's
approach will get business health spending under control by increasing
employees' incentives to reduce costs, cutting administrative waste and
imposing discipline on both private and public health care spending.
I.
1.
•
THE PRESIDENT'S PLAN
BUSINESSES WILL HAVE AN ACTIVE LOCAL ROLE
Businesses will have a strong voice in the health plans set up to serve their workers.
Companies, Taft-Hartley plans, or rural cooperatives with more than 5,000 employees
will be able to operate their own alliance, allowing them to enhance the many cost control
innovations offered by self insured plans today. Employers will be represented on the
boards of all regional health alliances.
2.
• .
REAL, ENFORCEABLE COST CONTROL
Market Forces
The Health Security act will aggressively control costs by bringing market forces to bear
in the health care system. Corporate alliances will continue using the innovative cost
control strategies they've found successful, and regional alliances will build on those
same strategies of pooling purchasing power and bargaining for better rates.
•
Administrative Savings
The Health Security act will streamline the burdensome and costly regulation that eats up
at least 15 cents of every health care dollar. By replacing today's thousands of insurance
policies with a comprehensive benefits package and standard claim forms, more money
will go to benefits and less to underwriters and marketers.
�•
Premium Caps: Back-up Measure for Cost Containment
While there is ample evidence that lower cost growth will be driven by competition and
increased efficiency, the Health Security plan will build in a back-up measure to cost
containment: premium caps. These caps will limit the growth in what businesses and
individuals pay for the comprehensive benefits package. The President believes that if
businesses are going to be asked to contribute to the cost of health care, they must be
guaranteed that increases in their payments will stay within reasonable bounds.
3.
•
FAIR, EQUITABLE FINANCING
Shared Responsibility -- Employers, Employees,· Government:
Under the President's approach, employers will contribute 80% of the average cost health
insurance plan in an area. Employees will pay the difference between this contribution
and the plan they choose. Employers who cover 100 percent of employee health costs
may continue to do so; all employers will pay 80 percent of an average price plan.
•
Businesses Protected by Caps at a Percentage of Payroll
Under Health Security, employers in a health alliance will pay no more than 7.9 percent
of their payroll for health care. Many employers today spend more than 10 percent of
their payroll for health insurarice.
•
Preserves the Tax Deductibility of Health Insurance
Under reform, premium payments will continue to be fully tax deductible for employers
and will not be included in employee's taxable income. The President's reform does not
tax any employer, ever, for any health benefit they provide. Any employer contributions - either toward covering the employee share of premiums, co-payments or deductibles -is never taxed, either for the employer or employee. Starting in the year 2004, services
beyond the comprehensive benefits in the reform -- such as cosmetic face lifts -- will no
longer be excluded from taxable income for employees.
4.
•
RELIEF FOR THE COSTS OF RETIREE HEALTH CARE
The Health Security Act will allow our businesses, and particularly the nation's largest
manufacturers, to better compete in global markets. Subsidizing the employer share of
early retiree( premiums will relieve many of our nation's largest employers ofthe
significant financial burden of covering health care costs for retired workers.
5.
•
REFORMS HEALTH PORTION OF WORKER'S COMPENSATION:
Injured workers will obtain treatment through their health plans, just as they would for
other injuries or illnesses. This will end unnecessary duplication of services, help
workers get back to work quickly, and reduce costs for employers. Workers'
compensation insurers will continue to provide coverage and reimburse the worker's
health plan according to a fee schedule.
�II.
WHAT THIS MEANS FOR AMERICA'S BUSINESSES:
LEADING CEOS SAY REFORM WILL HELP COMPETITIVENESS:
•
CEOs of some of America's leading firms -- large and small -- have sent written
statements of support for the President's approach because they recognize that it presents
the best opportunity for American firms to deal with escalating health care costs that
threaten their competitiveness.
•
Prominent business lead~rs expressing support for the Clinton plan include the CEO's of
USX, Bethlehem Steel, American Airlines, Archer Daniels Midland, Food For Less,
Drummond and Company, Anheiser Busch, Ford, Chrysler, McDonnell Douglas, and
General Motors.
SLOWER GROWTH IN COSTS FOR AMERICANS COMPANIES:
•
Firms that do not provide insurance will pay more, but at a much lower cost than they
currently face when they try to purchase insurance. While the implementation of
universal coverage means that aggregate business spending will initially increase under
reform -- as employers that do not currently provide begin to, the reduction in the growth
of health care costs will lead to lower aggregate business spending on health care by the
end of the decade.
ELIMINATING COST-SHIFTING SAVES FIRMS THAT NOW PROVIDE:
•
When all employers take responsibility, costs will be substantially reduced for businesses
that currently provide insurance. The non-partisan Congressional Budget Office
confirmed that: "Universal coverage would mean that those firms that now offer
insurance would not longer need to pay indirectly through higher doctor and hospital
bills for the care given to uninsured workers and their families. On the other hand, firms
that do not now provide insurance could no longer ride free. "1
•
As much as 10.5 percent of premiums paid by firms that now cover their employees goes
to pay for coverage for the uninsured. The Health Security Act will end the cost shifting
of the current systeiil., immediately lowering costs for many businesses that now offer
msurance.
NO MORE CORPORATE "FREE RIDERS"- EVEN PLAYING FIELD:
•
The Health Security Act will make businesses more efficient by eliminating "corporate
free riders" --the millions of Americans who are insured through a spouse's policy.
Employers of both spouses will contribute to coverage, further lowering costs for
business that currently provide coverage. For example in 1991, employers spent $26.5
billion to cover dependents who are employed by firms that did not offer insurance.2
I Reischauer Testimony, Senate Finance Committee, 2/9/94
.
.
2National Association of Manufacturers, "Employer Cost-Shifting Expenditures," prepared by Lewin-ICF, December
1991.
�- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
EVEN WHILE COVERING EVERYONE, BUSINESSES SAVE BILLIONS:
•
Even when new spending from those businesses that do not now provide insurance is
inCluded, CBO concluded that American businesses as a whole see dramatic savings
under reform. "Overall, businesses' costs for health insurance would be significantly
_reduced by the proposal. Businesses' insurance premiums for active workers would drop
by about $90 billion below our baseline level in the year 2004 ... "3
JOBS- EXPERTS SA¥_NEGLIGIBLE IMPACT OR NET CREATION:
•
The CBO analysis states clearly that the President's approach will have a negligible net
effect on employment: "The Clinton plan, [CBOJ concluded, would not significantly slow
the economy or result in the loss ofjobs, as many critics have charged. "4
3"Analysis of the Administration's Health Proposal", CBO, 2/9/94
APearlstein and Broder, Washington Post, 2/9/94
�LARGE EMPLOYERS
THE PROBLEM
RISING HEALTH CARE COSTS BURDEN AMERICA'S EMPLOYERS:
In 1992, American businesses paid almost $4,000 for health care for each employee
•
more than twice as much as they paid eight years before. [Christian Science Monitor. 11/21191]
•
More than two-thirds of companies with over 200 employees reported that theirhealth
care costs rose by an ave;age of 8% last year-- exceeding by far the 2.5% to 3% overall
rate of inflation. [KPMG Peat Marwick Survey in USA Today, 10/25/93]
•
In 1989, health care cutbacks were a major issue in 78 percent of all strike activity-- four
.
times higher than in 1986. [Christian Science Monitor, 11121191]
•
For the first time in American history, health care costs exceed business after-tax profits .
[Health Care Finance Review. Winter 1991]
RISING HEALTH COSTS HURT AMERICAN COMPETITIVENESS:
•
In 1990, GM spent $:5.2 billion in medical coverage for its 1.9 million employees and
retirees. This was more than the company spent on steel. [TIME, 11/25/92]
•
Health care costs add $1, 100 to the price of every car made in America -- double the cost
added to Japanese imports. [University of Michigan, 1990]
•
American Telephone and Telegraph pays $3 million every day for its employees health
care benefits. [Christian Science Monitor, 11/21191]
BUSINESSES BURDENED BY RISING COSTS OF EARLY RETIREES:
•
A recent Foster Higgins survey said that business costs of covering early retires rose by
11% last year -- almost four times the inflation rate. The study concluded that "many
employers have simply concluded they can no longer afford to provide retiree health care
coverage ... as many firms are paying premiums for early retirees that are twice as high
as those for active workers." [The Washington Post, 12113/93]
�----------------------------------------------
FIRMS THAT TAKE RESPONSIBILITY PAY FOR THOSE THAT DON'T:
•
Some experts estimate that $25 billion in health care costs are shifted onto people with
private insurance each year. [CBO, May 1993]
•
For example, in 1991, National Association of Manufacturers members were billed an
extra $11 billion by hospitals to recoup costs not covered by government or uninsured
patients. [Wall Street Journal, Uwe E. Reinhart, 01-14-92]
•
In 1991, employers who took responsibility for their employees' insurance paid an
additional $10.8 billion ia premiums to cover uncompensated hospital care -- nearly half
of which was provided to workers, or dependents of workers, in firms that didn't provide
coverage. [National Association of Manufacturers, "Employer Cost-Shifting Expenditures," prepared by
Lewin-ICF, December 1991.]
•
.
·
A recent study found that from one quarter to one third of premiums currently paid by
_ employers who provide coverage for employees and dependents goes to cover the
shortfall resulting from companies who do not cover their employees and the dependents
of their employees. ["How Would Business React to an Employer Mandate," Hewitt Associates, January
1994]
[bigbiz2.brf; 06/10/94 05:49PM]
�--------
------------------
--
Who Would Incremental Reform Really Hurt? Middle Class Ji'amilies
Some propose an incremental approach to health reforms aimed not at guaranteed
coverage for everyone, but at trying to increase the number of people with some
insurance reforms and subsidies for the poor. Employers could continue to drop
coverage, and millions of families would continue to go without insurance.
It's hard-working Americans-- the middle class-- who would be hurt by such an
approach. It's middle class families who will continue to lose their coverage when they
change a job; to take out a second mortgage to pay the bills from a child's illness, to
forego career advancement for fear of losing the coverage they have with their current
job.
Besides, all the evidence suggests an incremental approach won't work; in fact, health
reform that falls short of universal coverage could actually make things worse. Millions
would remain uncovered, including some previously insured through their company.
Costs would not be controlled, leading to higher prices for working familes and a
ballooning federal deficit.
Millions of families remain at risk•
Incremental reform bills will not cover everyone -- not even close. An estimated
24 - 40 million people would remain uninsured without universal coverage.
•
One in six Americans will still lose their health insurance at some point during the
year.
Middle class will take the hardist hit
•
Since the poor and non-working would get free coverage, and since wealthy
Americans could afford coverage on their own even if costs continue to rise, those
hardest hit by incremental reform would be middle-class working families.
•
Under a non-universal, managed competition-style reform plan , an estimated 2440 million people, more than two thirds ofthem in middle-class. working families.
would remain uninsured. The main reason these families wouldn't be covered is
the cost of insurance.
•
What's worse, many peopie who now have insurance protection today would find
themselves without coverage under an incremental reform plan. An estimated one
in ten workers with employer-:-sponsored insurance would be dropped by their
employer.
�-
-The cost shift will continue
•
Under the Band-Aid approach, those who take responsibility for insurance
coverage will continue to pay for those who do not. Senator Chafee, a Republican
from Rhode Island, puts it this way: "If there's no mandate that people have to
belong, then young healthy males who don't ride motorcycles aren't going to join
and so the costs are going to be carried by those who are sick." Alain Enthoven,
the so-called "father" ofmanaged competition, adds that "such a system would be
destroyed by free-riders".
The deficit will increase
•
•
Without any change to the existing system, two-thirds of the growth in federal
spending between 1993 and 1996 will be accounted for by health care spending.
Incremental reform plans aim to extend coverage to low-income families and the
unemployed by providing government subsidies to those Americans. Under a plan
with subsidies for the poor but no universal coverage, CBO says there would be
over $300 billion added to the deficit in financing the subsidies for low income
Americans. By contrast, the President's plan is expected to curb expenditures by
$30 billion by the year2000, and by $150 billion by 2004.
Universal coverage is the only way to guarantee controllable costs, and fair,
equitable financing of health care.·
Imagine a diner where everyone in a community goes for lunch. Most people have lunch,
pay, and leave, but every eighth person who walks into the diner sits down, orders
(usually the most expensive thing off the menu because they're famished), and gets up
and walks out without paying. The cost of that patron is spread over the other seven who
did pay. It only makes sense that when that eighth person pays for their lunch like
everybody else, and orders like everybody else, the cost to the other seven paying diners
will go down.
We don't think the solution is to charge working families through the nose for lunch, and
let the pooreat for free by taxing everyone who orders a steak. We think the free lunch
should end.
All Americans deserve tile security of high quality health care coverage they can't lose,
even if they move or take a better job. The American health care system will be stronger,
better, and less costly if Congress finishes the job they've started and guarantees private
health insurance to all Americans this year.
�
Dublin Core
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Speechwriting
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First Lady’s Office
Speechwriting
Date
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1994
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<a href="http://clinton.presidentiallibraries.us/items/show/36105">Collection Finding Aid</a>
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2012-1004-S
Description
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Within the First Lady’s Office, Speechwriting assisted with the writing and editing of the speeches given by the First Lady at various events and on various trips. This collection highlights topics relating to the arts and humanities, women’s issues and organizations, medical issues and organizations, health care, the economy, the military, and the efforts of the First Lady on behalf of candidates running in the 1994 midterm elections. It contains speeches given by the First Lady, and speeches given by President Clinton and Ira Magaziner, to a wide variety of organizations and audiences during 1994. The records include memos, notes, speech drafts, talking points, pamphlets, articles, correspondence, and newsletters.
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Clinton Presidential Records: White House Staff and Office Files
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HRC [Hillary Rodham Clinton]/North Carolina 6/14/94
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Speechwriting
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2012-1004-S
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Box 3
<a href="http://www.clintonlibrary.gov/assets/Documents/Finding-Aids/Systematic/2012-1004-S-Speechwriting.pdf">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/1766805" target="_blank">National Archives Catalog Description</a>
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1766805