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•
�COST ESTIMATES
CONTENTS
Page
Talking Points
1
Cost Estimates: A Thorough Process, A Conservative Result
2
Statement by Ira Magaziner (October 8, 1993)
4
Independent Validation
5
Letter from Cost Audit Group
Medicare Cost Projection Comparisons: Exaggerated and
Innacurate
8
15
Articles
•
"It Will Balance Just Fine," Ted Marmor and Jerry Hashaw, L.A. Times,
10/7/93
•
"Actuaries Defend Process, Assumptions Used in Review of Clinton Health
Plan," Rick Wartzman, Wall Street Journal. 10/12/93
•
"Clinton's Conservative Health Plan", Alice Rivlin, Wall Street Journal.
10/20/93
•
"A Billion Here, A Billion There," Uwe Reinhardt, New York Times.
10/18/93
i/data/hcalthcare/costesUoc
12/7/93
�TALKING POINTS
PROCESS/COST ESTIMATES/VALIDATION
UNPRECEDENTED PROCESS OF OUTSIDE REVIEW
• Our methodology was examined and validated by a team of prominent,
private sector actuaries from firms such as Coopers & Lybrand, Towers
Perrin, and Price Waterhouse. On of the actuaries, John Bertko of
Coopers & Lybrand, called the cost estimates the "best possible," saying
that they pass a "real world test." He confirmed that "the methodology
and assumptions were sound and reasonable."
INDEPENDENT VALIDATION BY WIDELY RESPECTED GROUPS
• An independent analysis of the Health Security Act -- conducted by the
Lewin-VHI health care consulting firm and authored by a former top
Reagan administration official -- confirmed that "the plan's financing
structure works: it meets the President's requirement of providing
universal coverage, and it does so without relying on an increase in broadbased income taxes."
Q UOTES FROM EXPERTS
•
" I think the calculations are honestly done, using the best techniques
available...The administration has consulted widely, looked at various
projections and took the set that seems most likely." [Henry Aaron, the
Brooking Institution, Orlando Sentinel. 9/16/93]
•
•
"We found that the national premium cost estimates of the standard
benefit plan on a fully phased-in-basis were the best available and that
the methodology and assumptions were sound and reasonable...These
base year premium costs estimates are reliable on a national level for
making decisions regarding the standard plan's benefits levels and the
associated subsidies." [John Bertko, Principal at Coopers & Lybrand and Member
of the Cost Audit Group, 10/8/93]
"[The plan is] realistic [and an] excellent foundation." [Phil Nudelman,
Chairman of Groups Health Cooperative at Puget Sound, Wall Street Journal,
10/1/93]
•
"There is ample evidence that the kind of managed care the Health
Security Act envisions can slow health care spending growth." (original
emphasis) [Lewin-VHI press release, 12/8/93]
•
"A comprehensive analysis of President Clinton's health plan finds that
it would reduce the Federal budget deficit." [New York Times. 12/9/93]
i/data/healthcare/teamecon/costest.tps
01/08/94
�"We believe that these cost estimates are the best available at this time
and are suitable for planning purposes." [Richard Ostuw, Chair of the Cost
Audit Group 10/8/93]
" I remain convinced that the financial data with respect to those areas of
the proposal which we were asked to review are well within the
reasonable range of results and are satisfactory for decision making
purposes." [Kenneth Porter, Manager and Chief Actuary, Dupont Corporation,
10/8/93]
" I think the calculations are honestly done, using the best techniques
available...The administration has consulted widely, looked at various
projections and took the set that seems most likely." [Henry Aaron, the
Brookings Institution, Orlando Sentinel. 9/36/93]
i/data/healthcaro/toamocon/costest.tps
01/08/94
�COST ESTIMATES:
A Thorough Process, A Realistic Result
SUMMARY:
The health care financing analysis undertaken by the
administration has been rigorous, using the best
analytical talent inside and outside the federal
government. In creating the analytic foundation for our
estimates, there was an unprecedented degree of outside
review of our assumptions and methodologies from
nationally recognized consulting and accounting firms
and from Fortune 500 companies. That's why we 're so
confident that our estimates are both credible and
prudent.
UNPRECEDENTED PROCESS OF OUTSIDE REVIEW:
•
Urban Institute modelers and a team of non-government actuaries and
health economists followed the model building and estimating process
throughout, and offered analysis and suggestions. Our methodology
was supervised and validated by a team of prominent, private sector
actuaries from firms such as Coopers & Lybrand, Towers Perrin, and
Price Waterhouse. These actuaries gave said our cost estimates are
the "best possible" and pass a "real world test." Although they may
disagree about individual policies, many independent economists and
health economists agree that our process was thorough and our
estimates are both credible and conservative.
INDEPENDENT ANALYSIS VALIDATED PLAN'S FINANCING:
•
An independent analysis of the Health Security Act - conducted by the
Lewin-VHI health care consulting firm and authored by a former top
Reagan administration official - confirmed that "theplan's financing
structure works: it meets the President's requirement of providing
universal coverage, and it does so without relying on an increase in
broad-based income taxes."
•
The study further concluded that the President's plan is conservative
enough to pay for the discounts for small businesses and individuals
within the entitlement cap and still have $25 bilhon remaining to help
reduce the deficit. As Larry Lewin said: "If the question is whether
they can finance this program with the revenues they will get under
their plan, the answer is yes, and they will still end up with $25 billion
for budgetary deficit reduction." IWashington Post, 12/9/93]
i/data/healthcare/teamecon/costest.doc
1/5/94
�LARGE DEGREE OF INTERGOVERNMENTAL COOPERATION:
•
In addition to the outside groups, a team of actuaries and health
economists from all the branches of government that do financial
analysis and cost estimating set up a working group back in February,
and have been working together ever since. They have shared data
and worked through assumptions and methodologies in much greater
detail than has ever been done before.
•
Estimating one seventh of the nation's economy is obviously an
immensely complex task. Reasonable people differ about assumptions,
so we tried to consistently err on the side of conservatism. For
example, when presented with two different premium estimates -- one
from the Health Care Financing Administration and one from Agency
for Health Care Policy Research -- we chose the higher one. As
another example, we overestimated the demand for discounts for small
businesses and low-income famihes in order to make sure the discount
entitlement caps would never be hit.
THE PROCESS GIVES US GREAT CONFIDENCE I N OUR NUMBERS:
•
The unprecedented degree of outside analysis and validation gives us
great confidence in our numbers. We invited outside review and
validation for one reason: to get the best data available validated by
the best people possible so that the national debate could focus on the
policy itself.
i/data/healthcare/teamecon/costest.doc
1/5/94
�THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
October 8, 1993
STATEMENT BY IRA C. MAGAZINER
In early spring of 1993, the White House assembled a group of actuaries —
from nationally-recognized accounting and actuarial firms - to be involved
from the beginning in examining the cost estimates for the President's health
care reform proposal.
We considered it essential that experts who were independent of the policy
process review the methodology used to develop the premium and subsidy
numbers, which represent the fundamental building blocks of the reform
proposal. This outside Cost Audit group was not required to support the
policy itself - just to verify the validity of the cost estimates. The actuaries
were asked to question the assumptions, substantiate the numbers, examine
the models, and communicate independently with each agency involved - to
verify that both the process and the estimates were valid and accurate.
As the attached letter indicates, these actuaries maintain that "...theprocess
was very thorough" and the methodology and assumptions "...sound and
reasonable." They further confirm that "...these cost estimates are the best
available at this time and are suitable for planning purposes."
The expertise of the Cost Audit group was appropriate for the premium and
subsidy estimates. They were not asked to validate the estimates of savings
projections from administrative simplification, competition and prevention or
the estimates of the federal (Medicare and Medicaid) savings. Another group
of outside experts was consulted regarding the savings projections from
competition and Medicare and Medicaid experts - from the Department of
Health and Human Services and the Office of Management and Budget participated in the development of federal spending projections.
We insisted on this unprecedented degree of outside review and validation in
developing the health reform proposal for one reason. We wanted to get the
best data available validated by the best people possible so that the national
debate would be able to focus on the policy itself and its imphcations for the
American people.
�QUOTES FROM EXPERTS
THE PROCESS WAS THOROUGH:
•
"We found that the general methodology and assumptions used i n
developing the cost estimates for the non-Medicare, non-Medicaid
population were sound and reasonable. The process was very
thorough. The staff is very capable and we are confident of their
ability to apply the assumptions and methodology." [Richard Ostuw, Vice
President of Towers Perin and Chairman of the Cost Audit Group, 10/8/93]
•
" I think the calculations are honestly done, using the best techniques
available, i f one presumes enactment of the program the President has
called for...The administration has consulted widely, looked at various
projections and took the set that seems most likely." [Henry Aaron,
Brookings Institution, Orlando Sentinel. 9/36/93]
THE BEST POSSIBLE COST
ESTIMATES:
•
"The plan's financing structure works.'" [Lawrence Lewin, [Wall Street
Journal. 12/8/93]
•
'"These findings come at a time when there is growing skepticism about
whether the President's plan could work...This r e p o r t validates the
l o g i c o f t h e p l a n ' s financing."'
VHI, Boston Globe. 12/9/93]
[Lawrence S. Lewin, Chairman of Lewin-
•
"Assuming that Clinton's proposed caps on health insurance premiums
work, 'then the rest of i t plays out,' said Lewin. 'There is no smoke and
mirrors here.'" [AP wires, 12/8/93]
•
"Health Plan Passes Reality Check" [Headline, Detroit Free Press. 12/9/93]
•
"We beheve that these cost estimates are the best available at this
time and are suitable for planning purposes." [Richard Ostuw, Vice
President of Towers Perin and Chairman of the Cost Audit Group, 10/8/93]
•
"The premium cost estimates and the methods and assumptions used
were the best possible within the context of a very challenging
process." [John M. Bertko, Principal at Coopers & Lybrand and Member of the
Cost Audit Group, 10/8/93]
•
"There's no point i n questioning simply whether the numbers 'add up.'
Of course they add up arithmetically." [Yale University Professors Ted
Marmor and Jerry Mashaw, L.A. Times. 10/7/93]
i/data/healthcare/teamecon/actvals.doc
01/08/94
�"We found that the national premium cost estimates of the standard
benefit plan on a Fully phased-in-basis were the best available and
that the methodology and assumptions were sound and
reasonable...These base year premium costs estimates are reliable on a
national level for making decisions regarding the standard plan's
benefits levels and the associated subsidies." [John Bertko, Principal at
Coopers & Lybrand and Member of the Cost Audit Group, 10/8/93]
" I remain convinced that the financial data with respect to those areas
of the proposal which we were asked to review are well within the
reasonable range of results and are satisfactory for decision making
purposes." [Kenneth W. Porter, Manager & Chief Actuary, DuPont Corporation,
10/8/93]
"The Clinton reform projects Medicare growth rates to be 4.1% by the
year 2000 ...Why is this not a plausible, even a conservative estimate?"
[Yale University professors Ted Marmor and Jerry Mashaw, L.A. Times. 10/7/93]
"[The plan is] reahstic [and an] excellent foundation." [Phil Nudelman,
Chairman of Groups Health Cooperative at Puget Sound, Wall Street Journal,
10/1/93]
THE COST CONTAINMENT STRATEGY WILL WORK:
•
"In reality, the administration's cost-containment goal is modest...[it]
permits about a 3 percent increase in the share of GDP going to health.
This plan does not try to shrink health spending relative to where we
are now. No health care jobs will be lost, though fewer jobs will be
added i n the f u t u r e . " [Stephen Zuckerman and Jack Hadley, Washington Post.
11/7/93]
•
"[The Clinton plan] would produce some administrative savings and
would substantially reduce administrative hassles ... What the
insurance industry burns up in commission, marketing and claims
processing costs is almost unspeakable. Clinton would reduce those
COSts." [Princeton professor Uwe Reinhardt, New York Times, 9/24/93]
•
•
"The [Lewin] study accepts Mr. Clinton's assumption that the Federal
Government can slow the rate of increase in health care spending by
regulating insurance premiums and by increasing competition among
doctors and hospitals." [New York Times. 12/9/93]
"In addition to its broadfindingthat the 'financing structure works,'
the [Lewin] study also found that...The plan's cost controls eventually
i/data/healthcare/teamecon/actvals.doc
01/08/94
�would slow the growth of health spending. By 2000, it would account
for 18 percent of gross domestic product instead of the 18.7 percent
figure expected under current conditions, a saving of $57 bilhon."
[Washington Post. 12/9/93]
COST CONTAINMENT WILL NOT LEAD TO RATIONING:
•
"(T)here is sufficient excess capacity so patients don't have to worry
about being harmed [by the Clinton plan]." [Wall Street Journal. 10/1/93]
•
"How will the system respond to these constraints? The specter of sick
patients being unable to receive care is completely farfetched. The
U.S. health system is fraught with inefficiencies and excess that have
no measurable health benefits." [Stephen Zuckerman and Jack Hadley,
Washington Post. 11/7/93]
•
"There is ample evidence that the kind of managed care the Health
Security Act envisions can slow health care spending growth." (original
emphasis) [Lewin-VHI press release, 12/8/93]
UNIVERSAL COVERAGE AND SAVINGS GO HAND IN HAND:
•
r"We cannot have real savings and real cost containment without
universal enrollment. ...Only with universahty can we ehminate the
practice of making patients with insurance pay the medical costs of
those w i t h o u t it." [Rashi Fein, New York Times. 10/28/93]
I "It is the experience of every industriahzed democracy with a universal
/ health insurance program that cost control becomes easier when the
/ p l a n is universal, not harder...the counsel currently offered by critics -go slow in adding new benefits until we can assure everyone that the
savings are real -- is advice that is likely to doom the plan to failure.
niversalism and cost control go hand in hand. Otherwise it is politics
as usual, f u l l of special pleading." [Yale professors Ted Marmor and Jerry
Mashaw, L.A. Times, 10/7/93]
•
"I'm generally heartened [by the Clinton plan]. I think the
fundamental strategy [the plan] embraces is the correct one, which is
to build on the private insurance and government programs that
already cover most Americans, perfecting that system and subjecting it
to a degree of budgetary control. I'm not wholly persuaded by some of
the details in the proposal, most importantly by the speed with which
the savings projected in the plan would be realized. But that's a
second-level concern almost any observer not directly involved in the
particular design produced by the President's advisors might have.
i/data/healthcare/tcamccon/actvals.doe
01/08/94
8
�They shouldn't detract from my behef that the President has laid out
the right starting place from which negotiations regarding a final plan
should begin." [Henry Aaron of the Brooking Institution, Orlando Sentinel.
9/26/93]
"The report found that older Americans would save the most from the
Clinton plan." [Detroit Free Press. 12/9/93]
"In general, firms that now offer insurance will see a reduction in
spending." [Lewin-VHI press release, 12/8/93]
REAL WORLD COMPARISONS:
•
"Companies in the private sector commonly make decisions on more
limited data and analysis than this." [Richard Ostuw, Vice President of
Towers Perin and Chairman of the Cost Audit Group, 10/8/93]
•
"These estimates also pass a 'real world' test." [John M. Bertko, Principal
at Coopers & Lybrand and Member of the Cost Audit Group, 10/8/93]
MOYNIHAN TURNAROUND:
•
" I feel very comfortable about the administration's position [on
financing]."
[Senator Moynihan, USA Today, 10/1/93]
THE PLAN WILL REDUCE THE FEDERAL DEFICIT
• "Under the assumptions used in this analysis, the program would result
in a net reduction in the Federal deficit over the 1994 through 2000
period...." [Lewin Executive Summary, 12/8/93]
•
"A comprehensive analysis of President Clinton's health plan finds that it
would reduce the Federal budget deficit." [New York Times. 12/9/93]
COMMUNITY RATING WILL WORK
• '"The magic in the administration's plan is community rating...This is
quite simply a return to the way insurance used to work before insurers
competed to avoid risk.'" [John Sheils, author of the Lewin-VHI study, Lewin-VHI
press release, 12/8/93]
i/dataliealthcare/teamecon/actvals.doc
01/08/94
�October 8, 1993
Mr. Ira Magaziner
Senior Advisor for Policy Development
The White House
Old Executive Office Building
Room 216
Washington, D.C. 20500
Dear Ira:
The members of the Cost Audit Group appreciate the opportunity to assist with the
President's health care raform proposal.
Role of Cost Audit Group
The primary role of the Cost Audit Group is to review the methodology and
assumptions used to estimate the base year cost of the standard fee-for-service
benefit plan for the non-Medicare, non-Madicald population. We also reviewed the
assumptions for subsidies for individuals snd employers and provided Input on the
implications and alternatives for several technical aspects of the proposal. We
understand that other groups conducted the review for other aspects of the proposal,
Including long term care benefits, prescription drug coverage under Medicare and
the savings from managed competition.
Policy issues were outside the scope of our role. We did not, for example, address
the implications for changing Medicare or Medicaid or the aasoclsted savings
estimates.
Proctsi
The elements of the health care reform proposal and the associated cost estimates
have been under development since early this year. Beginning in April, the Cost
Audit Group met with your staff and others to understand the proposals and the key
assumptions and methodology. We spent significant time with the staff at HCFA end
AHCPR, for example, on their cost models and preliminary estimate*. We made
numerous suggestions to refine the essumptlons and methodology used In
developing their estimates. We focused our attention primarily on the premium coat
�Mr. Ira Magaziner
October 8. 1993
Page 2
of the proposed standard benefit plan on a fully phased-ln basis. Our review of the
cost of subsidies was less comprehensive because of the nature of the databases
used by those performing the calculations.
We are pleased to have participated In this process and appreciate the openness and
receptivity of everyone we worked with. We found everyone interested In our Input
where it could improve their work.
General findings
We found that the general methodology end assumptions used in developing the
cost estimates for the non-Medicare, non-Medicaid population were aound and
reasonable. The process was very thorough. The staff Is very capable and we are
confident of their ability to apply the assumptions and methodology accurately.
In conducting our review, we recognize that the United States health care ayatam ia
extremely complex and dynamic. As a result, complete historical data Is not
available end future results are not fully predictable. However, companlee in the
private sector commonly make business decisions on more limited data and analyaia
than this.
Because of the evolving nature of the proposal and the cost estimates, it haa not
been possible to "sign off on a specific set of numbers. Rather, we have addressed
the current development of the numbers at various times and found them to be
reasonable.
1
Recognizing these limitations on available data and the timetable to make decisions,
we believe thet these cost estimates are the best available at this time and are
suitable for plenning purposes.
Additional tasks
The health care reform proposal will likely continue to evolve. The cost estimates
will evolve to reflect changes In the proposal, refinement in the essumptlons and
methodology end the availability of new data. We look forward to assisting in the
process to make the cost estimates aa reliable as practicable and to provide other
needed technical support.
1
W J I *
.
I
I I T I I A J
ik
I A U A I . f i
�Mr. Ira Magaziner
October 8, 1993
Page 3
Please feel free to contact any members of the group if you have any questions or
requests.
Sincerely,
Richard Ostuw
Chair, Cost Audit Group
Members:
Howard Atkinson, Jr.
John Bertko
Brent Greenwood
Richard Helms
Richard Ostuw
Kenneth Porter
Jack Rodgers
\0
UTJJd^ SjaMOl :ifl
IN3C;
�Copyright 1993 The Times Mirror Company
Los Angeles Times
October 7, 1993, Thursday, Home Edition
SECTION: Metro; Part B; Page 7; Column 3; Metro Desk
LENGTH: 1068 words
HEADLINE: PERSPECTIVES ON THE CLINTON HEALTH PLAN; IT Wil I
BALANCE JUST FINE; THERE IS PLENTY TO DEBATE, BUT THAT DO I S VT
INCLUDE WHETHER THE PROPOSED FINANCING 'ADDS UP.'
BYLINE: By TED MARMOR and JERRY MASHAW, Ted Marmor teaches piiMimpolicy and Jerry Mashaw teaches law at Yale University. They are co-authors of
America's Misunderstood Welfare State (Basic Book, 1992).
BODY: President Clinton in recent days has been out talking with ordinary
Americans about how his health-reform proposal will help meet their need for
insurance security and affordability. Meanwhile, back on the talk show circuit an*) m the
press, most of the conversation is a form of anxious hand-wringing about whether ihe
President's numbers "add up." Words like fantasy and hopelessly unrealistic are ihn.vvn
around whenever the topic turns to finance. Critics in Congress and elsewhere h.i^ i tried
to focus everyone's attention on the single issue of "How are we going to pay for i f
We have not been, nor are we now, partisans of the particular plan the Presuli. m has
put forward. But the questions about the plan's cost and financing are being posi <i in the
wrong way - a way that will discourage productive debate.
Asking these questions in the right way would lead to very different perspective on
what might be right or wrong with the reform plan the President has offered.
First, there's no point in questioning simply whether the numbers "add up." Of course
they add up arithmetically. Hillary Rodham Clinton, Ira Magaziner and their task force
members are not dopes. The critical issue concerns the assumptions built into the
numbers in order to make them add up. For the President's financial estimates, tlnee
sets of assumptions are crucial. It is the relative uncertainty about the assumptions that
feeds the "do the numbers add up" frenzy.
�Estimates of premium costs ~ of how much a family would pay for medical cover;ige and population growth are the least uncertain. One can quarrel around the edges --the
amount of small-business subsidies, for instance ~ but it is not a huge trick to look at
existing payments for the type of plan the President has proposed and come up with
reasonable predictions. The President's plan does that, and population growth will not
surprise us much over the period for which the numbers are projected - from no«- until
the year 2000.
The second set of numbers in the President's projections is more controversial. The
Administration estimates that gross domestic product will grow between 4.2% ami 5.4%
over the whole period, with inflation never rising above 2.7% a year. These, admittedly,
are optimistic estimates.
The question, however, is how these projections relate to the Clinton reform proposal.
Is the accuracy of these estimates critical to whether the plan's financing "adds up?" The
answer is "no." The financing plan does not rely on some particular percentage of growth
or inflation. Instead, it pegs limits on spending to these growth rates.
The real question to ask is exactly how the President's program proposes to tic health
spending to these numbers, whatever they turn out to be. This in turn depends on how
effective the techniques for containing costs - such as capping insurance premiums - are
likely to be. It is not a question of whether the economic projections are realistic in the
sense of being precisely right.
Finally, the President's financing relies critically on revenues from certain "sin" taxes
and "savings" from the Medicare and Medicaid programs. The sin tax revenues mriy be
somewhat overstated but could easily exceed the current estimates if Congress persuades
the President to change his mind and support new taxes on beer, wine, and domestically
produced liquor.
The real trouble arises, according to the pundits, from estimates of future savings in
Medicare and Medicaid. The critics seem to assume that these programs are sacrosanct
or, alternately, rapidly growing and politically uncontrollable.
How did these critics get to be so pessimistic? The growth rate of Medicare's hospital
expenditures per enrollee was 6.9% annually in the period 1980-83. But when the
government imposed reasonably effective payment constraints on hospitals in 1983, the
results were dramatic. The growth rate per enrollee between 1983 and 1988 was only
1.3%. The Clinton reform projects Medicare growth rates to be 4.1% by the year 2i>00.
In short, the rules controlling physician payments and pharmaceutical prices, combined
with changes in the age distribution of the population, have generated projections lhat
expenditure growth will be higher by the year 2000 than in the 1983-88 period. Why is
this not a plausible, even a conservative, estimate?
11
�Some critics will answer that Medicare's regulation of costs was effective in the past
only because hospitals (and now doctors) could "shift" some of their costs to privaitpayers. Again, this objection seems plausible, but it ignores the facts.
Under a plan that limits all payers, this cost shifting would not be possible.
It is the experience of every industrialized democracy with a universal health
insurance program that cost control becomes easier when the plan is universal, not
harder.
The explanation is simple. When everyone is in the same boat, special pleading that
leads to a breakdown in regulatory controls or shifting of costs becomes more difficult.
Common gain and common sacrifice are a reality and radically transform the politics of
medical financing.
Equally, a universal system makes someone accountable for overall costs in a way that
cannot be ignored or avoided. If the Congress and the states fail to develop constraints
that meet spending targets, the taxpayers will know about it. This is not politics as
usual, something the critics fail to acknowledge.
Therefore the counsel currently offered by critics - go slow in adding new benefits
until we can assure everyone that the savings are real - is advice that is likely to doom
the plan to failure. Universalism and cost control go hand in hand. Otherwise it is
politics as usual, full of special pleading.
There are valid concerns about the workability of the Clinton proposals. The
employment-based premiums, avoidance of general taxes and rehance on uncertain
techniques of cost control (particularly in the competing health plans) - all should give
pause. There are safer, more reliable and more effective ways of organizing health
insurance and health finance for all.
The real issue is how to get a sensible health system in place by the end of this
decade. Fixation on the current Clinton numbers or the cynical politics of the moment
will not get us there. In these respects, the critics have not yet started to ask the right
questions.
GRAPHIC: Photo, TED MARMOR ; Photo, JERRY MASHAW
LANGUAGE: ENGLISH
7
�•
also used Ihe letter to
Actuaries Defend Process, AssumptionsspellTheoutactuaries
what Ihey didn't do. such as
addressing the Implications of altering
Medicaid and Medicare, or assessing Ihe
Used in Review of Clinton Health Plan possible
savings from "managed compel!
By RICK WAKTZMAN
.sin// /trporlrr of T I I K WAI.I. S T U K K T JIIHIINAI.
WASHINGTON - A group of indepen
dent actuaries lhat reviewed aspects of Ihe
Clintun health-care proposal has formally
(erlilied that the methods and assump
lions used to calculate the private sector
premiiuns in Ihe plan "were sound and
• easonnble."
Yet in a letter to senior White House
aide Ira Magaziner. the group of six actuaries and one economist also was careful to
note lhat Its review didn't cover Ihe cost or
savings estimates for Ihe entire plan.
Moreover. Ihe letter said. "Policy Issues
were outside Ihe scope of our role."
The actuaries found themselves in Ihe
spotlight alter President Clinton men
lioned Ihe group in his health care address
lo Congress last month. "So then we gave
these numbers to actuaries for major
accounting firms and major Fortune 500
companies who have no stake in Ihis other
lhan to see lhal our efforts succeed. So I
believe our numbers are good and achievable." Mr. Clinton said.
In Interviews after the speech, several
of the actuaries said they thought people
could have mlmaderalood their role in
light of Ihe pretldent's remariu. Some of
Ihem said they weren't entirely comfort-
able with one of Ihe major policy decisions
embedded in the Clinton plan: the swiftness with which caps on private sector
heallh spending would be Imposed.
In their letter to Mr. Magaziner. Ihe
actuaries said Iheir focus was on evaluating Ihe cost of Ihe federally guaranteed
benefits package - put al an average of
about 14.200 per family. They also com en
(rated on the cost of government subsidies
lhal would help small businesses and lowIncome individuals pay for Ihe benefiis
package. The actuaries said, however, lhat
"our review of the cost of subsidies was
less comprehensive because of the nature
of Ihe databases used by those performing
Ihe calculations."
lion."
Overall. Ihe letter praised Ihe process
for developing the cost estimates as "very
thorough."
The seven members of Ihe group are:
Richard Ostuw. Ihe chief actuary al
Towers Perrin In Cleveland; Howard Atkinson, who runs his own actuarial firm In
suburban Washington; John Bertko. a
principal with Coopers It Lybrand In San
Francisco; Brent Greenwood, a principal
at Towers Perrin unit Tlllinghasl in Minneapolis; Richard Helms, an executive will.
Principal Financial Group In Des Moines,
Iowa; Kenneth Porter, chief actuary al
DuPont CO. In Wilmington. Del.; and Jack
Rodgers. a heallh economist with Price
Waterhouse in Washinglon.
Separately, the White House said it had
no intention of reducing the benefits thai
low Income and disabled people now receive under the MedicaWI program. The
New York Times reported yesterday lhal
coverage of some extra services, such as
transportation assistance and special education services, could be Jeopardized under
Ihe Cllnlon heallh plan because Ihey aren't
Included In the federally guaranteed benefits package.
A Sept. 7 draft of Ihe heallh plan
mentioned the possibility of providing
grants lo slate governments lo finance
such services. Administration officials
said ihey have already calculated the cost
of Including these services for Ihe Medicaid population. They said they're now
trying lo figure out how to administer
Ihem. "There Is no way we are going to
take away Medicaid benefits lhal people
already have." said Kevin Anderson, a
While House spokesman.
��V
THE WALL STREET JOURNAL
•AY, OCTOBER 20. 1993
's Conservative h ealth Plan
By Auct 11. RIVUN
The Clinton admlnisntion's pian (or
fixing what tils the American health care
system is bold and comprehensive, but
hardly radical. Indeed, k B conservative
in at least three oi tbe sanaes of that term
First, it reforms the qrsttn wttli minimal disruption to the bask mode of paying
for health care that Amen cam are used
to-employer-based Insurance. Second, it
relies primarily on market incentives, not
government regulation, to control escalating health care costs. Third, it can be financed-without smoke and mirrors-pnmanly by reallocating resources already
devoted to health care and does not require
large tax increases.
Almost everyone agrees that if we are
to have the productive, competitive, flexible economy that we all want, we cannot
allow thehealthcaretax"tocontinuensing We are already using 14^ of our gross
domestic product to pay for health care
Even time we let this "tax" drift up another percentage point, we are allocating
an additional ISO billion a year of the nation s precious resources to health care.
Moreover, a high-growth economy requires thai people be able to move into new
jobs, but our current system locks people
into jobs and onto welfare out of fear that
they will lose their health insurance Final)). hardly anyone would deny that the
way we now pay for heahh care contributes to unnecessary cost increases and
a wasteful use of health resources
Radical Surrery Rejected
Now that there is niditooadconsensus
that the current system » punishing the
economy, what is to be done?
The Clinton team rejected radical
surgery such as a sunje-payc sysiem or
government-set health care prices in favor
of restnictunng the current system and
building on its strengths. Aere are two
types of evidence that suck nstnictunng
can work First, health nainteoance organizations and other groups tt providers
compensated on a per-capita basis have
demonstrated that they can deliver good
care for appreciably lower eost. These
groups have incentives to Oflpbasize prevention, to reduce naeeessary procedures, tests and haepttaliiattoiu. and to
economize on the aequliMoB and use of ex per.::ve {!;u;?r.9r.:. Secostf. fcs-busr.ess
experience has shownfeatatargebuyer
can negotiate with nanpotlfig health plans
and get a much better deal than if mil
able to individuals and snail fir j that
lack market power.
i
The Clinton plan would Dcouagedoc
tore and other provtden o jsto health
plans that would be paid pt -captta premiums. It would give indtnc 'als and small
employers access to the nu set power that
big business has used so successfully by
organizing purehastaf cooperatives or
health alliances to bargiin with health
plans for the ber deal.
Tbe Clinton pian would t ysure everyone
at least a standard set at bttlth benefitsbenefits that would not be i Vlsk If an individual changed jobs, bees unemploved
<r got sick. AD budnease aiM have to
,
provide health oomage. t it Mbridies
would reduce the burden on s HaD and k>» •
wage firms,toptoyeeswou. share in the
cost, with s choice of plans ind dear incentives to choose tbe man tost-effective
options for meeting their beaith needs.
The Clinton approach reflecB strong
faith that consumer incentives, combined
with buyer power and better information
about quality and performance. can rein in
escalating cosu. That faith is strong, but
not absolute. If health care premiums con
tmue rising appreciably faster than Other
prices, "global budgets" would control the
rate of increase of premiums. V the mar
ket incentives work-and the Otatoo team
believes tbey will-then the coMTM. .will
not be necessary.
•K.-.^
Most of the cost of health care AT working people and their farilbes imH be
shared, as at present, by employm and
employees. The major ntw cost Jor the
government would be the subsidies needed
to make the insurance affordable t© small
firms and low-income individuals. <
These subsidies, along with new benefiu under Medicare for out-oMnplul presenptioo drugs and home health care for
the severely disabled, and some ether administrative cosu. are expected » increase fovenunent health spendkng by
roughly 1130 billion by the year MO. when
the prognm is fully up and nmnhif. Revenue increases-principally Ann a
.OP
ml
�V: ?
THE WALL STREET JOURNAL WEDNESDAY. OCTOBER 20. 1983
Clinton's Conservative Health Plan
Oev
0l
hettttay iocreiM in Uie dgarene tax-are growth of Medicare and Medicaid impossiexpected to produce only aoout S30 billion.ble. In the absence of health care reform,
The rest (roughly S100 billioi)) will come he would berightBroadened employer
from mllocatuiKresourcesthat would coverage and system-widereductionof
otherwise have gone Into existing govern- cost growth, however, make these savings
feasible, while the new prescription drng
ment programs.
These offsetting savings Is other gov- and home health benefits under Medicare
ernment programs are not. as some criticsmake the package attractive to the elderly.
Mr. Feldstein also argued that the Ginhave alleged, vague caps or unrealistic
hopes for reducing "waste, fraud and ton plan'srequirementthat employers •
abuse." Rather, the administration is provide health insurance to their employproposing specific changes in program ees willreducewages and cut tax revenues
rules that are feasible precisely because of to the Treasury. Quite irrelevantly, he caljtA: the proposed reform of the private system.culates how much revenue the Treasury
1Z\
For example. Medicare and Medicaid would lose if no firms provided health incover many working people. Under the surance now and al) were subjected to a
new rules, the working elderly and the new 7.W payroU tax to provide such coverage. In fact, however, most people are
already covered by employer-provided inworking poor would be covered by their surance, many with more generous coveremployers instead Both programs also age than the Clinton plan requires. Firms
make huge payments to hospitals to help whose cosu arereducedby the plan will
them cover the cost ortreating the unin- initially have higher profits and ultimately
sured. When everyone has Insurance, probably pay higher wages than they do at
these payments will be sharply reduced. present.
Increases in reimbursement rates for
providers under Medicare would also be Reduced Impact
slowed-a change made more feasible beIn either case. Treasuryrevenueswill
cause reimbursement for all providers will increase. Employers not now providing
be rising less rapidly. In addition, upper- health insurance will have to pay more,
income people would pay a large share of but the impact on them will be reduced by
the heavily subsidized premium for physi- subsidies. Very small firms will have their
cian care under Medicare. These specific cost increase capped at 3.5< of payroll A
changes in the Medicare and Medicaid more accuratereadingof the plan would
rules would reduce the cost of the two pro-have ied Mr. Feldstein to the conclusion
grams by more than $100 billion in the yearthat total wages and Treasury revenue are
2000. The cost of other government health likely to go up if the plan is enacted.
programs-for veterans, federal employThere is plenty of uncenamty about the
ees and military dependents-will also future cost of health care, but two current
grow less rapidly as some of their patients facts cannot be denied One. the U.S. almove into health alliances.
ready has an elaborate health care system
Under current policies, federal health that leaves millions of people uncovered
expenditures are expected to be about S680and whose costs arerisingrapidly Two.
billion in 2000-about S465 billion of which government already pays more than W,
will be for Medicare and the federal share of America's health bill.
of Medicaid alone. The administration is
The question now is whether, without
not proposing to reduce federal health scrapping the entire system, we can introspending-only to reduce the annual rate duce incentives that will make health care
of growth from about iff* to about S% bydelivery more efficient, and whether we
2000 as tbe new system phases in.
canreallocatesome of the resources now
In a Sept 29 article on this page. Mar- tied up in costly government programs to
tin Feldstein argued that political opposi- making insurance affordable for the curtion will make large reductions in the rently uninsured.
The architects of the Clinton plan believe that we can. and that we owe it to the
American people to try.
r
Ms. Rivlin is deputu director of the Office
of Management and Budget.
�Billion Here, a Billion There
By Uwe E. Reinhardt
T
Clintoris spending
cuts will work.
PRINCETON, N.J.
he
Congressional
Budget Office forecast
last spring that, at current trends, the United
States will spend 19 percent of its gross national product on health care in the year
2000, up from 14 percent today. "Impossible!" shouted America's pundits.
Thai level of. health spending, they
said, would bankrupt the country.
This fall, President Clinton proposed
to bring that projected growth down to
"only" 17 percent of the G.N.P. by the
year 2000. "Impossible!" shouted
America's pundits. Such a steep decline in spending would lead to rationing of care, they argued.
While Americans are thus meandering from despair over the prospect of deprivation at 17 percent to
angst over financial collapse at 19
percent, no other industrialized nation would even contemplate spending as much as 17 percent of its
G.N.P. on health care, and none of
them spends even 10 percent today.
Why, then, should President Clinton
be made to show 17 percent Is an
implausible goal? It is the President's critics who should demonstrate that it is unattainable.
Let us examine the projected cuts
in spending on Medicare, the health
insurance program for America's
lished in The New England Journal of
Medicine on March 4, 1993. The authors of an article on Medicare spending in cities found that, In 1989, after
adjusting for differences In age and
gender, Medicare payments for doctor's care, per beneficiary, varied
from lows of $822 in Minneapolis, $872
in San Francisco and $954 in New
York City to highs of $1,493 in Detroit,
$1,637 in Fort Lauderdale and $1,874
in Miami.
Should not America's physicians,
and the legislators from the high-cost
states, be made to defend these differentials to the tax-paying public?
Suppose Congress arbitrarily slashed
Medicare reimbursements for Miami
physicians by a global 20 percent
Even after this budget cut. Miami
physicians would still be absorbing 57
percent more Medicare dollars per
beneficiary than would their col-
HEALTH CARE
SECOND OPINIONS
An occasional series.
Americans merely lack health insurance, not health care, for they allegedly receive adequate treatment at
the expense of paying patients to
whom the cost of that charity care is
shifted.
But if the uninsured already get the
care they need, why should insuring
them all of a sudden break the national bank On this point, too, opponents
of the President's health care plan
should try harder to get their stories
straight.
The Clinton Administration's proposal is complex enough to offer any
would-be critic many targets of opportunity. It is puzzling that the
spending forecast is chief among
them. Sure, the President could explain his forecast better than he has
so far; the secrecy surrounding the
basis of his numbers is puzzling. But
the burden of proof on this issue ought
not to rest with the President. It rests
on the shoulders of his critics, for it is
they who have much explaining to
0
Uwe E. Reinhardt is professor of political economy at Princeton.
elderly. For that program, the President would allow annual spending to
increase from $128.8 billion in 1993 to
as much as $207.8 billion in the year
2000. That represents an average annual compound gfowth rate of 7.1
percent. Can America's physicians
really look the taxpayer in the eye
and argue that, even accounting for
inflation, for $207.8 billion they could
not treat the elderly properly in the
year 2000?
To put that question in perspective,
consider some fascinating data pub-
HE NEW
leagues in New York, and over 80
percent more than their colleagues in
Minneapolis.
Consider another point. Many critics argue that the 37 million currently
uninsured Americans could not possibly be accommodated at spending
levels of "only" 17 percent of the
G.N.P. Oddly enough, some of the
same critics also assert that these
do.
YORK
TIMES,
MONDAY,
OCTOBER
18. ,993
•
��COST OF DISCOUNTS
(For Families, Businesses, and Early Retirees)
Totals: 1995-2000
450
400-
$349
350-
Cushion $44
300
tn
c
o
Out-of-Pocket $9
= 250H
CD
C
tn
|
o
200H
Families $184
$188
Medicare $28
Q
150-
Early Retiree $12
State Maintenance
of Effort $75
100Business $100
Medicaid $85
$161
Net $161
(Includes $44
cushion)
50Gross
SOURCE: Office of Management and Budget
Offsets
Net
Chart ll-F
16
�Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Divider Title:
?r
�PREMIUM DISTRIBUTION
CONTENTS
Page
Talking Points
1
Who Pays Less? Who Pays More?
2
Health Care Premiums
5
Who Pays For Health Insurance Under Reform?
10
Early Retirees
11
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WHO PAYS LESS? WHO PAYS MORE?
SUMMARY:
I.
Without reform, 100% of employers and employees will pay more
for health benefits. Most people now receive coverage through
their employers and 7 out of 10 of these will pay the same or less
for health benefits that are the same or better. These Americans
will save an average of $61 per month on premiums, copayments, and deductibles. About 30 percent will pay more on average $24 more per month - but many will get more
comprehensive benefits and they all will receive a comprehensive
benefits package that can never be taken away. Costs to firms
depends on the extent to which they currently provide health
insurance for their employees. Employers who now provide
comprehensive health insurance will save considerably - from
day 1.
Firms
Two factors generally determine which firms pay more and which pay less:
(i)
whether the firm currently offers health insurance; and
(ii)
if so, how generous is the insurance -- i.e., how many employees do
they cover, do they cover the whole family, and how generous is the
benefit package?
Basically, the more generous the insurance coverage a firm offers today, the
more savings that firm will realize under the Clinton plan. Those who
currently offer no insurance, of course, will have to pay for coverage.
Benefits to Firms That Currently Insure:
•
Eliminating the cost shifting associated with uncompensated
care lowers premiums for firms that currently insure.
•
Under reform, all employers will contribute to the cost of
covering their workers. This approach will eliminate "corporate
free riders," where one firm pays the full amount for a family
policy, and the spouse's firm gets a free ride. Spreading costs
over all workers lowers premiums for each currently insured
worker by an average of 33%.
•
Under the Health Security Act, firms never pay more than 7.9
percent of payroll on health insurance premiums -- and many of
i/data/healthcare/teamecon/distribu.apr
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the smallest firms will pay even less because they qualify for
additional premiums discounts.
Some Firms Who Currently Offer Insurance Will Pay More:
•
If they only cover some workers, they will have to pay for all
workers.
•
If they do not cover dependents, they will have to contribute
their share for dependents.
•
If they offer minimal benefits, they will have to contribute to the
cost of a comprehensive benefits package.
II.
Families
POLICY:
There are substantial savings to famihes from reform, for a couple of reasons:
In general, employers are required to pay 80 percent of the premiums - many currently pay less.
Due to universal coverage, premiums are lowered for everyone to
account for the removal of costs associated with uncompensated care.
The administration estimates that $25 bilhon is spent each year in
uncompensated care in the current system. ($25 billion is in 1994 dollars
and is based on Congressional Budget Office estimates)
Slower rate of growth in the costs of premiums
Ks a result, almost all famihes who now have insurance see immediate benefits. We
divide the population into 5 groups:
4
1.
2.
3.
4.
5.
those with employer-sponsored insurance all year
those with independent "non-group" coverage all year
those with Medicaid all year
those who are uninsured all year
those who fit into one or more of the above categories during the course
of the year
Distribution tables for the first group are included in this section/the tables
include out-of-pocket spending as well as spending on premiums.
About 70 percent of currently insured families in the first category
would see a reduction in family spending under the Clinton plan.
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•
About 30 percent of currently insured families in the first category will
pay more -- but they will get the same or more comprehensive
coverage. Many of these are young, healthy people who currently
benefit from risk selection by insurers and will pay more with
community rating. Remember, these people will be assured of
comprehensive benefits now and as they get older.
These figures only represent spending for people who get insurance
through work all year; the numbers do not address those with expensive
"non-group" coverage, Medicaid beneficiaries, those who are uninsured, or
those who fall into more than one of these groups during the course of the
year.
Among those who pay more and less, here are the average amounts:
Change in Monthly Health Care Spending
Spender/Saver
1994
2000
Saver (61%)
Same (7%)
Spender (32%)
-$61
0
$24
-$90
0
$29
(NEW NUMBERS FROM KEN THORPE???)
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HEALTH CARE PREMIUMS
SUMMARY:
I.
Both employers and workers pay a share of the premiums. The
employer share is a fixed amount, depending on the family status of
the employee. The family share depends on the plan that the family
chooses. If a family chooses a plan that is cheaper than the cost of the
average plan, it pays less. If a family chooses a more expensive plan,
it pays more. Premiums vary by region, and discounts are available
for both employers and families.
What are the premiums?
Estimates of premium costs under the Health Security plan are based on four
rating pools calculated by family status. The actuaries' estimates suggest
that the national average premiums for the four rating pools will be:
Rating Pool
Single
Couple (No kids)
1 Adult Family
2 Adult Family
Average
Premium
$1,932
3,865
3,893
4,360
Payments By:
Family
Employer
$386
$1,549
773
2,125
778
2,479
872
2,479
* These premiums are 10.5 percent lower than they otherwise would be in
the absence of universal insurance. With universal coverage, firms that
insure their workers will no longer be overcharged to cover the costs of
employees of firms that do not insure their workers but whose workers still
receive care.
II.
What the familv pays
The family is responsible for the difference between the employer
contribution and the price of the plan that the family chooses -- on average,
this amounts to 20 percent of the premium. The 20 percent share is
indicated in the table above. This approach gives consumers an incentive to
make cost-conscious decisions; if a family chooses a higher than average cost
plan, it pays more than 20 percent of the premium. If it chooses a lower cost
plan, it pays less than 20 percent. It is possible for the family to pay
nothing at all if it chooses a plan that costs 80 percent of the average
cost plan.
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III.
What the employer pays
The employer is responsible for 80 percent of the weighted-average premium
in the Alliance. While each worker has a choice of plans with different
premiums, the employer contribution remains fixed (the amount depends on
the employee's family status) regardless of which plan the worker chooses.
For a single worker, the employer contribution is $1,549.
Today, the employer of one of worker often pays to cover the entire family,
even when the spouse is employed. Now each employer will contribute.
•
If the alliance collected 80 percent of the family premium for each
worker in a family, however, the alliance would collect more than what
is needed to finance the plan. This is because there is often more than
one worker per family - on average, there are 1.5 workers per family.
Thus, only one 80 percent share is necessary for each 1.5 workers.
•
The employer share is determined by taking 80 percent of the average
premium, and dividing by the average number of workers per family in
each alhance. Since 80 percent of the premium is about $3,000, the
amount per worker is about $3,000/1.5, or about $2,000 (the
approximate amount is $2,125).
Notice that this approach benefits firms that are already insuring most of
their workers. If a firm insures workers in 2 adult families, it is likely to be
paying $3,500 per worker (80 percent of the average). Under reform, this
firm's costs will immediately fall to $2,500 per worker.
While the President could have decided to make only one employer
contribute the entire 80 percent, he opted for a per worker standard,
rather than force companies to adapt every time there is a change in
employment or family status.
Summary: A firm determines whether an employee is (i) single; (ii) a couple;
or (iii) in a family with children. It then pays the appropriate amount for
each worker from the Table above (taking into account small business
discounts). Note: premiums vary from alliance to alhance.
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IV.
What about part-time employees?
Premium contributions for part-time employees are pro-rated. The firm pays a
percentage of the premium based on the number of hours of work per month.
•
Part time workers are defined as those working more than 40 hours
but less than 120 hours per month.
•
Employees who work less than 40 hours per month are covered as if
unemployed.
Hours of work per month:
40 hours
60 hours
_ ^Q hours
=
Employer share:
1/3 of employer share
1/2 of employer share
2/3 of employer share
If the total employer contributions for a family does not amount to the appropriate
employer share, the family pays the remainder of the employer share, in addition to
their 20 percent family share. If the family income is modest, they may be eligible
for discounts on both the employer and the family shares.
V.
What about non-workers?
For non-workers, it is more difficult to determine the payments. The family's
20 percent share of the premium is easy to compute. What about the
employer's share? What if the family works part of the year, but not the rest?
Here is the general rule. The number of months for which employer
payments were made is determined (if there are two workers, both are
included). If there are at least 12 months, the family is considered a working
family and owes just their 20 percent share. If the combined months of
employment is less than 12, the family owes the remainder of the employer
premiums. Again, non workers may be eligible for discounts.
VL
The Self Employed
As with any business, self-employed individuals pay the employer's share of
the premium. They also pay the individual/family share. They may be
eligible to receive discounts on both the employer and the family share,
depending on the firm size and/or income. In addition, they will be able to
deduct 100 percent of their health care costs.
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VII.
How are the Discounts Computed?
There are three types of discounts:
Low-Income Families: Low income famihes in the Alhance are eligible to
receive a discount on their 20 percent share. Generally, famihes owe nothing
on the first $1,000 of income, and the discounts phase-out as income reaches
150 percent of the poverty level. The phase-out rate is a little bit comphcated,
and the rates vary by rating category (single, couple, ...). The $1,000
disregard and the poverty line are indexed to CPI growth.
Businesses: The firms' 80 percent share is limited to 7.9 percent of payroU,
with discounts covering any costs above that cap. Small firms are eligible for
additional discounts. This is also true for the self-employed. None of the
employer caps are indexed; thus, to the extent health expenses rise relative
to wages, firms pay a smaller share of the premium costs.
Families 80% Payments: (i.e., for unemployed) Similar to the other family
discounts, a family pays nothing for the first $1,000 of income, and full
payment of the premium cost is expected at 250% of the poverty level. The
indexing is the same as for the family payment.
VIII. Determining the Premiums
The premiums in the final estimates are from the Office of the Actuary, Health
Care Financing Administration, Department of Health and Human Services.
Estimating the Premiums
The premiums produced by the actuaries are based on the SPAM model
which projects current levels of health care spending plus upgrades for the
uninsured, and add-ons for preventive care, dental care, and mental health
services.
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The guaranteed national benefits package provides health insurance
comparable to average coverage levels associated with Fortune 500
companies. These premiums are higher than what will be charged under
reform, however, because current premiums are marked up to account for the
cost of uncompensated care. Estimates from the Congressional Budget Office
suggest that there is about $25 bilhon of uncompensated care in current
private health insurance premiums in 1994 dollars. Accordingly, due to
universal coverage, we lower the premiums to adjust for uncompensated care
savings. The newly insured are brought into the reformed system at 100
percent of average cost. The resulting premiums are shown in the first
column of the following Table.
In addition to premium estimates from the Health Care Financing
Administration, estimates were prepared by the Agency for Health Care
Policy and Research, in the Department of Health and Human Services.
These estimates are displayed in the second column of the Table. Note that
the AHCPR premiums are lower than those estimated by the Health Care
Financing Administration. By opting to use the HCFA premium estimates,
the administration chose the more conservative estimates for its final models.
These premiums are averages for the nation as a whole. In areas with higher
health care costs, the premiums are likely to be higher as well.
Policy Type
Premium
HCFA AHCPR
Single
Couple, no children
1 Adult Family
2 Adult Family
$1,933 $1,735
$3,865 $3,471
$3,894 $3,647
$4,361 $4,262
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Employer
Payment
$1,546
$2,125
$2,479
$2,479
�12/19/93
WHO PAYS FOR HEALTH INSURANCE UNDER REFORM?
Most health insurance premiums in the new system will come from employers and
employees -- the same way it does currently. The administration estimates that if
the health reform plan were in place in 1994 instead of the current system, $321
bilhon of premiums would be paid by employers and individuals. These premiums
would be split between employers ($189 bilhon, or 59%), households ($56 bilhon, or
17%), and gross government premium discounts ($76 bilhon, or 24%).*
* This amount includes the discount "cushion," which is allocated
among employers and households based on their share of discounts.
(DON'T WE HAVE A CHART FOR THIS)
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II.
HoVREAffmNIhOIC^RLY R E T I R E E S (AGES 55-64)
SUM]>l3lR¥^ln#iistration estimates the cost of the retiree pohcy at about $3 bilhon
in 1994. This pohcy will generate substantial savings for many employers
who now cover the health care costs of early retirees. In order to recover
some of this windfall to employers, employers who benefit from this pohcy
will be required to pay a portion of these savings for a three year period.
Specifically, from 1998-2000, companies and state/local governments must
pay 50% of the greater of: (i) the estimated decrease in their early retiree
costs due to the Health Security Act; and (ii) the annual average of the actual
amount they paid for early retirees in 1991, 1992, and 1993, adjusted to
1998-2000 based on the medical component of the Consumer Price index.
There are two items of revenue related to the retiree provisions, although
both may be more accurately described as "reductions in discounts" than
"revenue increases." These are the 50 percent assessment on the corporate
windfalls for three years, and the phase-out of benefits for wealthier retirees.
The amount of money raised by these provisions is estimated at:
Revenues from Retiree Issues ($ bilhon)
Item
1995 1996 1997 1998 1999 2000 Total
Assessment
Payments from High
Income Retired
Total
$0.0 $0.0 $0.0 $2.4 $4.4 $4.7 $11.4
III.
0.0
0.0
0.0
0.0
0.1
0.1
0.2
$11.6
How Much Do Corporations Benefit?
Corporations benefit from the savings they realize as they reduce their
liability for the cost of covering early retirees. It is estimated that total
annual health insurance payments for early retirees with employer
sponsored health insurance is about $16 billion in 1994. Estimates are that
this will increase to $30 billion in 2000, if there is no reform. Under reform,
payments by corporations will be about $2 bilhon per year (assuming they
pay the 20% share of the employee's premium), and the three-year
assessment will cost them about $4 bilhon per year in the years it is paid.
Hence there are substantial savings to firms from these retiree provisions.
There are two important points about the savings to corporations:
•
The assessment is on only one-half of the benefits and applies for only
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•
three years.
The benefits are greater than the $11 bilhon government cost of the
retiree discount, because the discount is the cost of community-rated
family premiums. Today, corporations pay experience-rated
premiums.
Here is a summary of changes in payments for currently retired workers with
employer sponsored health insurance:
•
Of the $16 bilhon that employers and employees are paying under the
current system, $7 bilhon is eliminated because of community rating.
When early retirees are pooled with the rest of the population, the cost
of providing them insurance falls by over 40%. This cost is borne by
people who are currently younger and healthier, but who receive other
benefits from the program.
•
Of the remaining $9 bilhon, $4 bilhon is received in payments from
employers. This money is collected because many people aged 55-64
work part-time or have spouses who work. Contributions from
employers for part-time workers offset the retiree and non-worker
discounts. There is $ 1 billion of discounts paid as part of the regular
non-worker discount system. The additional cost of providing everyone
below $90,000 or $115,000 with a discount for the employer's share of
the premium is about $2 billion (recall that this decomposition is for
people with current retiree health insurance only; this is only 40
percent of the retired population). Finally, the family share of the
premiums is $2 bilhon.
Change in Payments for Early Retirees with Health Insurance
If Program Were Fully In Place in 1994 ($ bilhon)
Current Payments
$16
- Employer
13
- Private
8
- Federal and State/Local
5
- Employee
3
Reduction in Payments
Due to Community Rating
$7
Required Payments
$9
- Employer Payments*
4
- Non-worker Discounts
1
- Additional Retiree Discount
2
i/data/healthcare/teamecon/distribu.apr
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- Remaining 20% Share
2
Corporate Savings**
$7
Corporate Retiree Assessment*** 4
* Includes a small amount of discount payments to employers subject to the cap.
** Current employer payments, less reform employer payments, less 20% share assumed paid by
corporation.
*** In the 1998-2000 period.
IV.
Won't This Induce More Retirement?
Fear of losing health care insurance should not be what drives career
decisions. As with any plan that provides universal coverage, we expect
there to be an increase in retirement as a result of the Health Security plan.
Administration estimates are that there will be an increase in the number of
retired people of about 350,000 to 600,000 (roughly 5 to 7.5 percent of the
population aged 55-64). This will have some effect on discount payments, of
about $1 to $2 billion annually (500,000 people x $2,000 each = $1 bilhon).
To the extent that these people are replaced by younger people who would
not be in the labor force, however, there will be additional employer
payments to offset the additional discounts given. The net effect on discounts
could thus be small. We include the amount of the additional discounts as
part of the discount cushion.
Most of the inducement to retire early comes from the provision of universal
coverage itself. In today's market, it is difficult or impossible for an early
retiree to obtain private (non-group) health insurance coverage. Under
reform, this coverage will be available at an affordable level, even without
the early retiree discount. The cost of health insurance for even a rich retiree
would be one employer share (about $2,100 for a couple) plus the family's
share of the premium (about $770 for a couple). For a retiree with income
less than 250% of poverty (about $24,000 for a couple), the cost would be even
smaller. Compared to the inducement to retire stemming from the
community rating of premiums and the general non-worker discounts, the
additional discounts to early retirees should not lead to much more early
retirement.
V.
What effect will this have on Social Security and Medicare?
This increased retirement will cost the Social Security and Medicare trust
funds some additional expenses. We estimate these costs to be $10 billion
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�12/19/93
over the 1994 to 2000 period, and about $3 bilhon per year after 2000.
There are a large number of provisions in the Health Security plan that will
affect the trust funds, however. The reduction in employer health insurance
spending would raise wages and lead to more revenue for the trust funds, for
example. We do not know the full extent of the effects on the Trust Funds,
however.
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PREMIUM DISTRIBUTION
CONTENTS
Talking Points
Page
1
Who Pays Less? Who Pays More?
2
Health Care Premiums
5
Who Pays For Health Insurance Under Reform?
10
Early Retirees
11
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01/08/94
��\
DISTRIBUTION: WHO PAYS WHAT?
TALKING POINTS
75 PERCENT OF PREMIUMS COME FROM PRIVATE SOURCES
• Most of the funding -- approximately 75 percent -- for the
Administration's health care reform proposals comes from the same place
it does today -- premium payments by employers and individuals.
EMPLOYERS: DISCOUNTS AND PREMIUM CAPS
• All employers will contribute for each of their workers, covering 80% of
the cost of an average-priced plan. The individual/family contributions
make up the difference. Small businesses with less than 75 employees
may receive discounts to help them cover their employees.
•
The Health Security Act limits the growth in premium rates. This hmit,
combined with new bargaining power for small businesses, will mean
affordable prices on insurance.
MOST WILL PAY LESS
• The majority of people covered through their employers - nearly 7 out of
10 people in this group - will pay the same or less for health benefits that
are the same or better - on average, saving $61 per month on premiums,
co-payments, and deductibles. About 30% will pay more - on average,
about $24 per month - but those people will receive benefits that can
never be taken away, and for many, better benefits than they do today.
COST CONSCIOUS
DECISIONS
• Famihes and individuals will have a choice of differently-priced plans they pay more if they choose a more expensive plan, and less if they
choose a less expensive plan. They could pay no premium at all if they
choose a plan at or below 80 percent of the average. Discounts are
available on the family share of the premium for lower income famihes.
i/data/hcalthcare/teamecon/distribu.tps
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��DISTRIBUTION: WHO PAYS WHAT?
TALKING POINTS
75 PERCENT OF PREMIUMS COME FROM PRIVATE SOURCES:
•
Most of the funding -- approximately 75 percent -- for the Administration's
health care reform proposals comes from the same place it does today -premium payments by employers and individuals.
AFFQRBABLE PREMimfB^m-COST-^ONSCJQUS
mCISIONS:
•
7 out of 10 people who are now covered by their employers will pay the same"
or less for health benefits that are the same or better -- on average, saving
$61 per month on premiums, co-payments, and deductibles. About 30% of
these people will pay more - on average, about $24 per month - but many
will receive better benefits than they do today and they will all gain the
security of comprehensive coverage that can never be taken away.
Famihes and individuals^willTiave a choice of differently-priced plans - they
pay more if they choose' a more expensive plan, and less if they choose a less
expensive plan. They/pay no premium at all if they choose a plan at or below
80 percent of the average. Discounts are available on the family share of the
premium for lower incoraejamihes.
^
DISCOUNTS AND PREMIUM CAPSfOR
EMPLOYERS:
All employers wMLcontributeJor^each their workers, covering 80% of the
cost of an average-priced plan. The individual/family contributions make up
the difference. Small I usinesses.<5r75 employees (^/Eeft^r^j^t receive
"S^^ktew^jial discounts to help them cover their employees. ^ \
The Health Security Aci hmits the growth in premium rates. This limit,
combined with new bargaining power for small businesses, will mean
affordable prices on insurance.
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�12/19/93
WHO PAYS LESS? WHO PAYS MORE?
SUMMARY: The majority of people covered through their employers ~ nearly
7 out of 10 of this group -- will pay the same or less for health benefits that are
the same or better. These Americans will save an average of $61 per month on
premiums, co-payments, and deductibles. About 30 percent will pay more. On
average, these people will pay $24 more per month, but many will get better
benefits •- and they all will receive a comprehensive set of benefits that can
never be taken away. Costs for firms depends on the extent to which they
currently provide health insurance for their employees.
I.
Firms
Two factors generally determine which firms pay more and which pay less:
(i)
whether the firm currently offers health insurance; and
(ii)
if so, how generous is the insurance -- i.e., how many employees do they
cover, do they cover the whole family, and how generous is the benefit
package?
Basically, the more generous the insurance a firm offers today, the more savings
that firm will realize under the Clinton plan. Those who currently offer no
insurance will have to pay more.
Benefits to Firms That Currently Insure:
•
Eliminating the cost shifting associated with uncompensated care
lowers premiums by 10.5% for firms that currently insure.
•
Under reform, all employers will contribute to the costs of covering
their workers. This will ehminate "corporate free riders," where one
firm pays the full amount for a family pohcy, and the spouse's firm
gets a free ride. Spreading costs over all workers lowers premiums for
each currently insured worker by 33%.
•
Firms never pay more than 7.9 percent of payroll on health insurance
premiums -- and many of the smallest firms will get discounts.
Some Firms Who Currently Offer Insurance Will Pay More:
•
If they only cover some workers, they will have to pay for all workers.
•
If they do not cover dependents, they will have to contribute
their share for dependents.
If they offer less generous benefits, they will have to contribute for a
comprehensive benefits package.
�12/19/93
II.
Families
POLICY:
There are substantial savings to families from reform, for a couple of reasons:
•
Employers are required to pay 80 percent of the premiums -- many
currently pay less.
•
Due to universal coverage, premiums are lowered to account for the
removal of costs associated with uncompensated care. We estimate
that there is $25 bilhon in uncompensated care in the current system.
($25 billion is in 1994 dollars and is based on Congressional Budget Office estimates)
•
Slower rate of growth in the costs of premiums
As a result, almost all families who now have insurance see immediate benefits. We
divide the population into 5 groups:
1.
2.
3.
4.
5.
those with employer-sponsored insurance all year
those with independent "non-group" coverage all year
those with Medicaid all year
those who are uninsured all year
those who fit into one or more of the above categories during the course
of the year
We present distribution tables for the first groun^Our new distribution tables
include out-of-pocket spending as well as spending on premiums.
•
About 70 percent of currently insured families in the first category
would see a reduction in family spending under the Clinton plan.
•
About 30 percent of currently insured families in the first category will
pay more -- but they will get the same or more benefits. Many of these
are young, healthy people who currently benefit from risk selection by
insurers and will pay more with community rating. Remember, these
people will be assured of comprehensive benefits as they get older.
Remember that these figures only represent spending for people who get
insurance through work all year; the numbers do not address those with
expensive "non-group" coverage, Medicaid beneficiaries, those who are
uninsured, or those who fall into more than one of these groups during the
course of the year.
�12/19/93
Among those who pay more and less, here are the average amounts:
Change in Monthly Health Care Spending
Spender/Saver
2000
Saver (61%)
Same (7%)
Spender (32%)
0
4^
$291^
(NEW NUMBERSTRDMTCEN THORPE???)
X
•7"
HQ**
^ fa.
4^1 A
^
Q ^ / h ^
�12/19/93
HEALTH CARE PREMIUMS
4
I.
SUMMARY: Both employers and workers pay a share of the premiums. The
employer share is a fixed amount, depending on the family status of the
employee. The family share depends on the plan that the family chooses. If a
family chooses a plan that is cheaper than the cost of the average plan, it pays
less. If a family chooses a more expensive plan, it pays more. Premiums vary
by region, and discounts are available for both employers and families. The
\principles below help to explain the premiums in greater detail.
What are the premiums?
The Health Security plan forms four rating pools based on family status to
determine the premiums. Our calculations suggest that the national average
premiums for the four rating pools will be:
Rating Pool
Single
Couple (No kids)
1 Adult Family
2 Adult Family
Average
Premium
$1,932
3,865
3,893
4,360
Payments By:
Family
Employer
$386
$1,549
773
2,125
778
2,479
872
2,479
* These premiums are 10.5 percent lower than they otherwise would be in the
absence of universal insurance. With universal coverage, firms that insure
their workers will no longer be overcharged to cover the costs of those who
are uninsured but still receive care.
II.
What the familv pays
The family is responsible for the difference between the employer
contribution and the price of the plan that the family chooses -- on average,
this amounts to 20 percent of the premium. The 20 percent share is indicated
in the Table above. This gives consumers an incentive to make cost-conscious
decisions; if a family chooses higher than the average cost plan, it pays more
than 20 percent of the premium. If it chooses a lower cost plan, it pays less
than 20 percent. It is possible for the family to pay nothing at all if it
chooses a plan that is 80 percent of the average cost plan.
�12/19/93
IV.
What about part-timers?
Part-timers are pro-rated. The firm pays a percentage of the premium based on the
amount of hours of work per month.
•
Part time workers are defined as those working more than 40 hours
but less than 120 hours per month.
•
Employees who work less than 40 hours per month are covered as if
unemployed.
Hours of work per month:
40 hours
60 hours
80 hours
Employer share:
1/3 of employer share
1/2 of employer share
2/3 of employer share
If the total employer contributions for a family does not amount to the appropriate
employer share, the family pays the remainder of the employer share, in addition to
their 20 percent family share. They may be eligible for discounts on both the
employer and the family shares.
V.
What about non-workers?
For non-workers, it is more difficult to determine the payments. The family's
20 percent share of the premium is easy to compute. What about the
employer's share? What if the family works part of the year, but not the rest?
Here is the rule. We add up how many months of employer payments a
family had (if there are two workers, we add for both). If there are at least 12
months, the family is a working family and owes just their 20 percent share.
If the combined months of employment is less than 12 months, the family
owes the remainder of the employer premiums. Non workers may be
eligible for discounts.
VI.
The Self Employed
As with any business, self-employed individuals pay the employers share, of
their premium. They also pay the individual/family share. They may be
eligible to receive discounts on both the employer and the family share. In
addition, they will be able to deduct 100 percent of their health care costs.
�12/19/93
VII.
How are the discounts computed?
There are three types of discounts:
Low-Income Familied: Low income famihes in the Alhance receive a
discount on their 20 percent share. Generally, famihes owe nothing on the
first $1,000 of income, and the discounts phase-out as income reaches 150
percent of the poverty level. The phase-out rate is a little bit comphcated, and
the rates vary by rating category (single, couple, ...). The $1,000 disregard
and the poverty hne are indexed to CPI growth.
Businesses: The firms' 80 percent share is capped at 7.9 percent of payroll,
with discounts covering any costs above that cap. Small firms receive
additional discounts. This is also true for the self-employed. None of the
employer caps are indexed; thus, to the extent health expenses rise relative
to wages, firms pay a smaller share of the premium costs.
0
Familied{80 /o Payments: (i.e., for unemployed) Similar to the other family
discounts, a family pays nothing for the first $1,000 of income, and full
payment is expected at 250% of the poverty level. The indexing is the same
as for the family payment.
^
VIII. /D^rmitun^-the Premiums
The premiums in the final estimates are from the Office of the Actuary, Health
Care Financing Administration, Department of Health and Human Services.
Estimating the Premiums
The premiums produced by the SPAM model are based on projected current
levels of health care spending plus upgrades for the uninsured, and add-ons
for preventive care, dental care, and mental health services.
The guaranteed national benefits package provides health insurance
comparable to average coverage levels associated with Fortune 500
companies. These premiums are higher than what will have to be charged
under reform, however, because current premiums are marked up by the
presence of uncompensated care. Estimates from the Congressional Budget
Office suggest that there is about $25 bilhon of uncompensated care in
current private health insurance premiums in 1994 dollars. Accordingly, due
to universal coverage, we lower the premiums to allow for uncompensated
care savings. The newly insured are brought into the reformed system at 100
percent of average cost. The resulting premiums are shown in the first
�12/19/93
column of the following Table.
In addition to premium estimates from the Health Care Financing
Administration, we obtained estimates from the Agency for Health Care
Pohcy and Research, in the Department of Health and Human Services.
These estimates are displayed in the second column of the Table. The
AHCPR premiums are lower than those estimated by the Health Care
Financing Administration. We thus used the more conservative premium
estimates for ourfinalmodels.
These premiums are averages for the nation as a whole. In areas with
greater health care costs, the premiums will be higher. ^
Policy Type
Premium
HCFA AHCPR
Single
Couple, no children
1 Adult Family
2 Adult Family
$1,933
$3,865
$3,894
$4,361
$1,735
$3,471
$3,647
$4,262
�12/19/93
WHO PAYS FOR HEALTH INSURANCE UNDER REFORM?
Most health insurance premiums in the new system will come from employers and
employees -- the same way it does currently. We estimate that if the system were in
place in 1994 instead of the current system, there would be $321 bilhon of
premiums. These premiums would be split between employers ($189 bilhon, or
59%), households ($56 bilhon, or 17%), and gross government premium discounts
($76 billion, or 24%).*
* This amount includes the discount "cushion," which is allocated
to employers and households based on their share of discounts.
(DON'T WE HAVE A CHART FOR THIS)
10
�12/19/93
TREATMENT OF EARLY RETIREES (AGES 55-64)
SUMMARY:
I.
Right now, more and more companies are being forced to drop
benefits for early retirees. This benefit is important to protect
working Americans from losing the security they've worked hard
for all their lives. To ensure fiscal responsibility, the benefit is
phased-in over three years. The government will pick up 50% of
the costs that employers now pay for their early retirees for these
three years. After that, it will guarantee the entire employer
share. The retiree will pay the 20 percent family share of the
premium.
The Policy
the Federal government pays the required employer premium for
early retirees. Eligible retirees, their spouses and children are treated as full-time
employees; they are obligated to pay no more than the family share of the premium
for their health plan. To qualify for government payment of the employer share:
•
a person must be aged 55-64;
•
owe any employer premium; and
•
have worked a minimum of 40 quarters of Social Securitycovered employment.
The provision phases out gradually for higher income individuals and families; the
phase-out begins with income above $90,000 per year (single) or $115 per year
(family). Tax-exempt interest income is considered income when determining
eligibility. If a person is over the income hmits and does not work at all, they would
owe the employer premium. If they work half-time, their employer would pay half
of the employer share, and they would owe half of an employer premium - and
would receive discounts towards that amount.
The retiree is responsible for 20 percent of the premium unless their income is
below 150% of poverty, in which case they receive a discount. Just as some do
today, employers have the option of paying the 20% share for their former
employees. Employer-provided medical benefits for retirees aged 65 and over are
not affected by the Health Security Act (except that firms will benefit from the
inclusion of prescription drug coverage in Medicare).
ii
�12/19/93
II.
How Much Does This Cost?
We estimate the cost of the retiree policy at about $3 billion in 1994. This policy
Ul generate substantial savings for many employers who now cover the health
are costs of early retirees. In order to recover some of this windfall to employers,
we ask organizations who benefit from this policy to pay a portion of these savings
for a three year period. Specifically, from 1998-2000, companies and stateAocal
governments must pay 50% of the greater of: (i) the estimated decrease in their
early retiree costs due to the Health Security Act; and (ii) the annual average of the
actual amount they paid for early retirees in 1991, 1992, and 1993, adjusted to
1998-2000 based on the medical component of the Consumer Price index.
There are two items of revenue related to retiree provisions, although both may be
more accurately described as "reductions in discounts" than "revenue increases."
These are the 50 percent assessment on the corporate gains for three years, and the
phase-out of benefits for wealthier retirees. The amount of money raised is:
Revenues from Retiree Issues ($ bilhon)
Item
1995 1996 1997 1998 1999 2000 Total
Assessment
Payments from High
Income Retired
Total
$0.0
$0.0
$0.0
$2.4
0.0
0.0
0.0
0.0
$4.4
0.1
$4.7
0.1
$11.4
0.2
$11.6
III. How Much Do Corporations Benefit?
Corporations benefit by the difference between what they currently pay for retiree
health insurance and the amount they will have to pay under reform. It is
estimated that total annual health insurance payments for early retirees with
employer sponsored health insurance is about $16 billion in 1994. Estimates are
that this will increase to $30 billion in 2000, if there is no reform. Under reform,
payments by corporations will be about $2 bilhon per year (assuming they pay the
20% share of the employee's premium), and the three-year assessment will cost
them about $4 bilhon per year in the years it is paid. Hence there are substantial
savings to firms from the retiree provisions. There are two important points about
the savings to corporations:
•
The assessment is on only one-half of the benefits and apphes for only
three years.
•
The benefits are greater than the $11 billion government cost of the
retiree discount, because the discount is the cost of community-rated
family premiums. Today, corporations pay experience-rated
premiums.
12
�12/19/93
Here is a summary of changes in payments for currently retired workers with
employer sponsored health insurance:
Of the $16 bilhon that employers and employees are paying under the
current system, $7 bilhon is ehminated because of community rating. When
early retirees are pooled with the rest of the population, the cost of providing
them insurance falls by over 40%. This cost is borne by people who are
currently younger and healthier, but who receive other benefits from the
program.
Of the remaining $9 billion, $4 billion is received in payments from
employers. This money is collected because many people aged 55-64 work
part-time or have spouses who work. Contributions from employers for parttime workers offset the retiree and non-worker discounts. There is $1 billion
of discounts paid as part of the regular non-worker discount system. The
additional cost of providing everyone below $90,000 or $115,000 with a
discount for the employer's share of the premium is about $2 billion (recall
that this decomposition is for people with current retiree health insurance
only; this is only 40 percent of the retired population). Finally, the family
share of the premiums is $2 billion.
Change in Payments for Early Retirees with Health Insurance
If Program Were Fully In Place in 1994 ($ billion)
Current Payments
$16
- Employer
13
- Private
8
- Federal and State/Local
5
- Employee
3
Reduction in Payments
Due to Community Rating
$7
Required Payments
$9
- Employer Payments*
4
- Non-worker Discounts
1
- Additional Retiree Discount
2
- Remaining 20% Share
2
Corporate Savings**
$7
Corporate Retiree Assessment*** 4
* Includes a small amount of discount payments to employers subject to the cap.
** Current employer payments, less reform employer payments, less 20% share
assumed paid by corporation.
*** In the 1998-2000 period.
13
�12/19/93
IV.
Won't This Induce More Retirement?
Fear of losing health care insurance should not be what drives career
decisions. As with any plan that provides universal coverage, we expect
there to be an increase in retirement as a result of the Health Security plan.
Administration estimates are that there will be an increase in the number of
retired people of about 350,000 to 600,000 (roughly 5 to 7.5 percent of the
population aged 55-64). This will have some effect on discount payments, of
about $1 to $2 billion annually (500,000 people x $2,000 each = $1 bilhon).
To the extent that these people are replaced by younger people who would not
be in the labor force, however, there will be additional employer payments to
offset the additional discounts given. The net effect on discounts could thus
be small. We include the amount of the additional discounts as part of the
discount cushion.
Most of the inducement to retire early comes from the provision of universal
coverage itself. In today's market, it is difficult or impossible for an early
retiree to obtain private (non-group) health insurance coverage. Under
reform, this coverage will be available at an affordable level, even without
the early retiree discount. The cost of health insurance for even a rich retiree
would be one employer share (about $2,100 for a couple) plus the family's
share of the premium (about $770 for a couple). For a retiree with income
less than 250% of poverty (about $24,000 for a couple), the cost would be even
smaller. Compared to the inducement to retire stemming from the
community rating of premiums and the general non-worker discounts, the
additional discounts to early retirees should not lead to much more early
retirement.
V.
What effect will this have on Social Security and Medicare?
This increased retirement will cost the Social Security and Medicare trust
funds some additional expenses. We estimate these costs to be $10 billion
over the 1994 to 2000 period, and about $3 billion per year after 2000.
There are a large number of provisions in the Health Security plan that will
affect the trust funds, however. The reduction in employer health insurance
spending would raise wages and lead to more revenue for the trust funds, for
example. We do not know the full extent of the effects on the Trust Funds,
however.
14
�EMPLOYERS' PREMIUM PAYMENTS UNDER THE HEALTH SECURITY ACT:
1994 - 2000
Absent comprehensive reform:
•
Employer premium payments will increase from $180 billion in 1994 to
$303 billion in 2000. [Chart lll-A]
•
This correlates to an increase in percent of payroll spent on health
insurance from 5.8 percent of total payroll to 7.0 percent of total
payroll, and an increase in per worker premium expenditures from
$1,540 in 1994 to $2,473 in 2 0 0 0 . [Charts lll-B and lll-C]
•
This represents an overall increase in premium payments of nearly 70
percent.
Under the Health Security Act:
•
•
Employer premium payments will only rise from $180 billion in 1994 to
$276 billion in 2000 - $27 billion less than would have been the case
without reform. [Chart lll-A]
This correlates to a smaller increase in percent of payroll spent on health
insurance -- only 6.4 percent with reform. [Chart lll-B]
18
�Per worker premium expenditures increase at a slower rate, from
$1,540 in 1994 to $2,245 in 2000. [Chart lll-C]
19
�1
E M ^ b Y E R S PREMIUM PAYMEN
TC
^ D E R THE HEALTH SECURITN^CT
Annual Employer-Paid Premiums: 1994 - 2000
$315
$303
$295
$275
tn
c
| $255
in
c
tn
| $235
o
Q
$215
$195
Without Reform
$180
With Reform
$175
SOURCE: HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
Includes premiums paid by public and private employers for covered services in corporate and
regional alliances.
Chart lll-A
20
�:M£)YERS' PREMIUM PAYMENTS 10)ER THE HEALTH SECURITY©;T
Average Annual Percent of Payroll: 1994 - 2000
7.5%
7.0%
7%
6.6%
>.
Q.
o 6.5%
4—'
c
6.3%
0)
6.5%
6.4%
(J
0-
6.2%
5.8%
Without Reform
With Reform
5.5%
SOURCE: HHS and The Urban Institute's TRIM2 M o d e l , benchmarked to HCFA's National Health A c c o u n t s .
Includes p r e m i u m s paid by public and private employers for covered services in corporate and
r e g i o n a l alliances.
Chart lll-B
21
�EMl^bYERS' PREMIUM PAYMENTS
ER THE HEALTH SECURiTY^pfcT
Average Annual Premiums per Worker: 1994 - 2000
$2,500
$2,473
y
$2,300
$2,118
/
/
^ ^ " ^
$2,245
$2,100
$2,097
tn
i—
o
Q
$1,900
$1,834
/
ir
$1,808
$1,700
"^Without Reform
<
$1,540
With Reform
$1,500
SOURCE: HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
Includes premiums paid by public and private employers for covered services in corporate and
regional alliances.
Chart lll-C
22
�EMPLOYERS' PREMIUM PAYMENTS UNDER THE HEALTH SECURITY ACT
For Firms Currently Offering Insurance: 1994 - 2000
Absent comprehensive reform:
•
Employer-paid premiums for firms that currently offer insurance would
rise at a rate of approximately 70 percent, from $180 billion to $303
billion between 1994 and the year 2000. [Chart lll-D]
•
This results in an increase in percent of payroll spent on health
insurance from 6.8 percent of total payroll to 8.2 percent of total
payroll, and an increase in per worker premium expenditures from
$1,923 in 1994 to $3,086 in 2000. [Charts lll-E and lll-F]
Under the Health Security Act:
•
Employer premium payments will rise from $180 billion in 1994 to only
$244 billion in 2000 -- $59 billion less than would have been the case
without reform. [Chart lll-D]
•
This results in a smaller increase in percent of payroll spent on health
insurance -- only 6.6 percent with reform, versus 8.2 percent without
reform. [Chart lll-E]
23
�Per worker premium expenditures increase at a slower rate, from
$1,923 in 1994 to $2,481 in 2000, an overall increase of only 29
percent. This equates to savings of $605 per worker in the year 2000.
[Chart lll-F]
Under the Health Security Act, employers who now offer insurance will
experience immediate savings.
24
�1
E I ^ O Y E R S PREMIUM PAYMENTS ^ D E R THE HEALTH S E C U R I T ^ C T
Annual Employer-Paid Premiums for Firms Currently Offering Insurance: 1994 - 2000
$315
•
$303
$295
$275
(0
$256
c
y
I $255
in
c
(0
^ - ^ ^
I $235
$244
o
Q
$215
'
$215
'
"
$224
$212
$195
^ W i t h o u t Reform
<$180
With Reform
$175
SOURCE: HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
Includes premiums paid by public and private employers for covered services in corporate and
regional alliances.
Chart lll-D
25
�EMiBbYERS' PREMIUM PAYMENTS
iER THE HEALTH 3ECURIT
Average Annual Percent of Payroll for Firms Currently Offering Insurance:
A-
1994 - 2000
8.5%
8.2%
8%
7
7%
cc
CURRENT
Q.
o 7.5%
c
0)
o
REFORM
CD
CL
^
y
7.2%
" ^ ^
7%
6.8%
6.8%
6.6%"
6.5%
SOURCE: HHS and The Urban Institute's TRIM2 M o d e l , b e n c h m a r k e d to HCFA's National Health A c c o u n t s .
Includes p r e m i u m s paid by public and private employers for covered services in c o r p o r a t e and
regional a l l i a n c e s .
Chart lll-E
26
�EM^bYERS' PREMIUM PAYMENTS dfc)ER THE HEALTH SECURITY^DT
Average Annual Premiums per Worker for Firms Currently Offering Insurance: 1994 - 2000
$3,100
$2,900
$2,481
$2,317
$2,100
Without Reform
$1,923
With Reform
$1,900
SOURCE: HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
Includes premiums paid by public and private employers for covered services in corporate and
regional alliances.
Chart lll-F
27
�EMPLOYERS' PREMIUM PAYMENTS UNDER THE HEALTH SECURITY ACT
For Firms Currently Offering Insurance
For Firms with Greater or Less Than 5000 Employees: Year 2000
»
Firms with more than 5000 employees are eligible to form corporate
alliances. Employees of firms with less than 5000 employees will enroll
in regional alliances.
*
Under the Health Security Act, the average employer that currently offer
insurance will pay less, per worker and as a percent of payroll, on health
insurance premiums for their employees than would be the case without
reform.
*
Firms with less than 5000 employees that currently offer insurance will
save $621 per worker in the year 2000 alone. They will spend only 6.5
percent of total payroll on employees' health insurance premiums.
[Charts lll-G and lll-H]
*
Firms with more than 5000 employees that currently offer insurance will
save $551 per worker in the year 2000 alone. They will spend only 7.0
percent of total payroll on employees' health insurance premiums.
[Charts lll-G and lll-H]
28
�EM^bYERS' PREMIUM PAYMENTS A E R THE HEALTH S E C U R I T Y ^ T
Average Annual Percent of Payroll for Firms Currently Offering Insurance
For Firms with Greater or Less Than 5,000 Employees: Year 2000
10%
Without Reform
With Reform
< 4,999
5,000 +
Total
Firm Size
SOURCE: HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
Includes premiums paid by public and private employers for covered services in corporate and
regional alliances.
Chart lll-G
29
�EM^bYERS' PREMIUM PAYMENTS i S b E R THE HEALTH S E C U R I T i ^ T
Average Annual Premiums per Worker for Firms Currently Offering Insurance
For Firms with Greater or Less Than 5,000 Employees: Year 2000
$4,000
$3,500
I Without Reform
A\N\Vn Reform
$1,500
$1,000
< 4,999
5,000 +
Total
Firm Size
SOURCE: HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
Includes premiums paid by public and private employers for covered services in corporate and
regional alliances.
Chart lll-H
30
�EMPLOYERS' PREMIUM PAYMENTS UNDER THE HEALTH SECURITY ACT
For Firms Currently Offering Insurance
By Firm Size: Year 2000
•
On average, firms with fewer than 5000 employees that currently offer
insurance will save, both as a percent of payroll and per worker, under
the Health Security Act. [Charts Ill-I and lll-J]
>
Small firms with fewer than 25 workers will experience the largest
savings as a percent of payroll under the Health Security Act. They will
pay a full 2.6 percentage points less of their payroll - $771 per worker on premiums after reform. [Charts lll-l and lll-J]
31
�EM^DYERS' PREMIUM PAYMENTS 0 b E R THE HEALTH SECURIT\0bT
Average Annual Percent of Payroll for Firms Currently Offering Insurance
By Firm Size: Year 2000
10%
Without Reform
With Reform
< 25
25 - 99
100 - 499
500 - 999
1,000 - 4,999
< 5,000
Firm Size
SOURCE: HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
Includes premiums paid by public and private employers tor covered services in corporate and
regional alliances.
Chart III- I
32
�1
EMiBbYERS PREMIUM PAYMENTS A > E R THE HEALTH SECURITV^bT
Average Annual Premiums per Worker for Firms Currently Offering Insurance
By Firm Size: Year 2000
$4,000
$3,500
Without Reform
With Reform
$1,500
$1,000
< 25
25 -99
100 - 499
500 - 999 1,000 - 4,999
< 5,000
Firm Size
SOURCE: HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
Includes premiums paid by public and private employers for covered services in corporate and
regional alliances.
Chart lll-J
33
�WORKERS' PREMIUM PAYMENTS UNDER THE HEALTH SECURITY ACT:
1994 - 2000
•
Absent comprehensive reform, workers' premium payments would rise,
on average, from 1.4 percent of payroll in 1994 to 1.7 percent in 2000.
[Chart IV-A] By the year 2000, workers would contribute an average of
$600 each year for their share of their premiums. [Chart IV-B]
•
As states phase in universal coverage under the Health Security Act,
workers' premium payments will fall from 1.5 percent of payroll in 1996
to 1.2 percent in the year 2000. [Chart IV-A] By the year 2 0 0 0 ,
workers will contribute an average of $437 per year for their share of
their premiums -- 27 percent less than if there were no comprehensive
reform. [Chart IV-B]
»
Thus, under the Health Security Act, workers's premium payments will
be 0.5 percentage points less of total payroll costs in the year 2000.
[Chart IV-A]
35
�1
W G Q E R S PREMIUM PAYMENTS U ^ E R THE HEALTH S E C U R I T ^ C T
Average Annual Percent of Payroll: 1994 - 2000
1.8%
SOURCE:
HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
�W G ^ E R S ' PREMIUM PAYMENTS U 0 E R THE HEALTH S E C U R I T ^ C T
Average Annual Premiums per Worker: Year 2000
$700
• Without Reform
$600
H w i t h Reform
$600
$500
CO
$400
jo
o
Q
$300
$200
$100
$0
Reform Status
SOURCE:
HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
Chart IV-B
37
�FAMILIES' PREMIUM PAYMENTS UNDER THE HEALTH SECURITY ACT:
Year 2000
Absent comprehensive reform, families' average annual spending in the
year 2000 on health insurance premiums would be $373 higher than
under the Health Security Act ($1062 versus $689, respectively).
[Chart IV-C] This translates to their spending 2.3 percent of income on
premiums without comprehensive reform, as opposed to 1.5 percent
under the Health Security Act. [Chart IV-D]
Families with annual incomes between $30,000 and $50,000 would
spend an average of $377 more for premiums in the year 2 0 0 0 if there
is no comprehensive reform than they would under the Health Security
Act ($1171 versus $794, respectively). [Chart IV-C] This translates to
their spending 3.1 percent of income on premiums without comprehensive reform, as opposed to 2.1 percent under the Health Security Act.
[Chart IV-D]
38
�All families, regardless of income, will save money on premium payments in the year 2000 under the Health Security Act. [Chart IV-E]
On average, families with annual incomes between $30,000 and
$50,000 will spend 1.0 percent of income less on health care in 2000
under the Health Security Act. [Chart IV-E, Chart IV-C]
On average, the Health Security Act will save families 35 percent of
their premium costs in the year 2000. Families with annual incomes
between $30,000 and $50,000 will save 32 percent. [Chart IV-C]
39
�F A M E S ' PREMIUM PAYMENTS U!#ER THE HEALTH SECURIWACT
Average Annual Premium Spending: Year 2000
$2,000
I Without Reform
Z^With Reform
$1,500
$1,416
cn
c
$1,171
T3
C
0)
W $1,000
3
C
C
<
$500
$0
UNDER 10K
10-30K
30 -50K
50 -70K
70 -90K
Household Income
SOURCE:
HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
90K +
Total
Chart IV-C
40
�F A M E S ' PREMIUM PAYMENTS U ^ E R THE HEALTH S E C U R E ACT
Average Annual Premium Spending as a Percent of Income: Year 2000
11.6%
•
Without Reform
W t h Reform
Oi
E
o
o
c
c
<D
O
i_
d)
Q.
2.3%
UNDER 10K
10 - 30K
30 - 50K
50 - 70K
70 - 90K
Household Income
SOURCE:
HHS and The Urban Institute's TRIM2 M o d e l , b e n c h m a r k e d to HCFA's National Health A c c o u n t s .
90K+
Total
Chart IV-D
41
�FAM
1
S PREMIUM PAYMENTS U # E R THE HEALTH SECUR
ACT
Average Annual Savings on Premium Spending as a Percent of Income
By Income Category: Year 2000
1.0%
0.9%
0.7%
0.4%
0.2%
< 10K
10-30K
30-50K
50-70K
Average Annual Income
SOURCE:
HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
70-90K
90K+
Chart IV-E
42
�FAMILIES' EXPENDITURES UNDER THE HEALTH SECURITY ACT
Year 2000
In the year 2 0 0 0 , under the Health Security Act:
•
Of those families which are currently uninsured at least part of the year,
43 percent will spend the same or less for health care than they would if
there were no comprehensive reform. [Chart IV-F]
•
Of those families which currently have employer-sponsored insurance,
73 percent will spend the same or less for health care than they would if
there were no comprehensive reform. [Chart IV-F]
•
Of those families which currently purchase their in$urance individually,
92 percent will spend the same or less for health care than they would if
there were no comprehensive reform. [Chart IV-F]
43
�FAMBIES'
EXPENDITURES U N D # THE HEALTH S E C U R n # A C T
C h a n g e in Health Care S p e n d i n g : Year 2000
1 00%
92%
80%
73%
O)
c
0>
Q-
60%
57%
(0
cn
c
Change in Spending
'5
05
3 Spend More
40%
I
c:
Spend Less or Same
<D
U
Q_
20%
8%
0%
Uninsured
N = 41,856,000 Households
N = 69,486,000 Persons
Employer-Sponsored
N = 42,212,000 Households
N = 98,751,000 Persons
Individually
Purchased
N = 6,797,000 Households
N = 11,480,000 Persons
Type of Insurance
SOURCE: HHS and Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
Includes premium and out-of-pocket spending In regional alliances.
Uninsured Includes 31.8 million persons uninsured part-year.
Chart IV-F
44
�FAMILIES' EXPENDITURES UNDER THE HEALTH SECURITY ACT
By Current Insurance Type: Year 2000
Under the Health Security Act:
Employer-Sponsored Insurance
•
38 percent of all families which currently have employer-sponsored
insurance will experience savings of up to $1,000 in overall health
care spending (premiums and out-of-pocket expenditures) in the
year 2000. [Chart IV-H]
•
30 percent of all families which currently have employer-sponsored
insurance will experience savings of more than $1,000 in overall
health care spending in the year 2000. [Chart IV-H]
•
On average, families which experience savings in overall health care
spending will enjoy a decrease of $109 per month ($1,309 for the
year) in the year 2000. [Chart IV-G]
•
5 percent of all families which currently have employer-sponsored
insurance will experience no change in overall health care spending
(premiums and out-of-pocket expenditures) in 2 0 0 0 . [Chart IV-H]
45
�•
Families which will be spending more on overall health care expenditures will spend on average an additional $31 per month ($367 for
the year) in the year 2000. [Chart IV-G]
Individually Purchased Insurance
•
The vast majority (85.9 percent) of families which currently purchase health insurance individually will experience savings of more
than $1,000 on overall health care spending (premiums and out-ofpocket expenditures) in 2000. [Chart IV-I]
•
On average, families which experience savings in overall health care
spending will enjoy a decrease of $375 per month ($4,501 for the
year) in the year 2 0 0 0 . [Chart IV-G]
•
Families which will be spending more on overall health care expenditures will be spending an average of an additional $75 per month
($903 for the year) in 2000. [Chart IV-G]
Currently Uninsured
•
28 percent of all families which are currently uninsured at least part
of the year will experience some savings in overall health care
46
�spending in the year 2 0 0 0 , due largely to reductions in high out-ofpocket expenditures. The average decrease will be $148 per month
($1,772 for the year) in 2000. [Charts IV-G and IV-J]
15 percent of all families which are currently uninsured at least part
of the year will experience no change in overall health care spending
in 2 0 0 0 . [Chart IV-J]
Families which will be spending more on overall health care expenditures will be spending an average of an additional $43 per month
($519 for the year) in 2000. [Chart IV-G]
47
�F A M E S ' EXPENDITURES U N D # T H E HEALTH SECURn#ACT
Average Annual Saving and Spending by Current Insurance Type: Year 2000
$4,000
Change in Payments
U\ Average Decrease
H Average Increase
$2,000
$519
($31 per month)
$903
($75 per month)
$367
($43 per month)
$0
w
I—
O
Q
- $2,000
$1,309
($109 per month)
$1,772
($148 per month)
- $4,000
$4,501
($375 per month)
- $6,000
Uninsured
Individually Purchased
Employer-Sponsored
Type of Insurance
SOURCE: HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
Includes premium and out-of-pocket spending In regional alliances.
Uninsured includes 31.8 million persons uninsured part-year.
Chart IV-G
48
�FAMSES'
EXPENDITURES UND# THE HEALTH SECURI10ACT
Average Annual Percent Change in Spending
Families which Currently have Employer-Sponsored Insurance: Year 2000
N = 42,212,000 Families
35%
30%
30%
O)
c
I 25%
Q.
CO
1 20%
H Savers
CO
V)
0)
I
3 Spenders
15%
ED No Change
13%
12%
S 10%
o
Q.
5%
5%
1%
IZZZL
0%
No Change
$0-100
$100 - 250
$250 - 500 $500 - $1,000
$1,000 +
Amount Saved/Spent
SOURCE: HHS and The Urban Institute's TRIM2 M o d e l , b e n c h m a r k e d to HCFA's National Health A c c o u n t s .
Includes p r e m i u m and out-of-pocket expenditures for t h o s e in regional alliances.
Totals may not a d d to 100% due to r o u n d i n g .
Chart IV-H
49
�FAMlBfeS' EXPENDITURES UND0THE HEALTH SECURI"#ACT
Average Annual Percent Change in Spending
Families which Currently Purchase Insurance Individually: Year 2000
N = 6,797,000 Families
100.0%
85.9%
o)
c
80.0%
'T>
c
0)
Q.
W
£
>
m
60.0%
•
CO
m
0)
Z l Spenders
1
S.
Savers
No Change
40.0%
c
<D
O
k_
0)
^
20.0%
5.4%
0.0%
0%
No Change
.7%
0%
$0-100
•7% .5%
2% 1.6%
1.1%
12.2%
ZZL
$100 - $250 $250 - $500 $500 - $1,000
$1,000 +
Amount Saved/Spent
SOURCE: Center tor Intramural Research, AHCPR.
Includes premium and out-of-pocket expenditures for those In regional alliances.
Totals may not add to 100% due to rounding.
Chart IV-I
50
�F A M E S ' EXPENDITURES UND0THE HEALTH SECURn0\<
Average Annual Percent Change in Spending
Families which are Currently Uninsured: Year 2000
N = 41,856,000 Families
20%
•
Savers
3 Spenders
No Change
No Change
$0-100
$100 - 250
$250 - $500 $500 - $1,000
$1,000 +
Amount Saved/Spent
SOURCE: HHS and The Urban Institute's TRIM2 Model, benchmarked to HCFA's National Health Accounts.
Includes premium and out-of-pocket expenditures for those in regional alliances.
Totals may not = 100% due to rounding. Uninsured Includes 31.8 million persons uninsured part-year.
Chart IV-J
51
�Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Divider Title:
^a\h\^Q^5
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Health Care Task Force Records
Creator
An entity primarily responsible for making the resource
White House Health Care Task Force
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="https://catalog.archives.gov/id/10443060" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
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William J. Clinton Presidential Library & Museum
Identifier
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2006-0885-F
Text
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Paper
Dublin Core
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Title
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Ultimate Master [Binder] [2]
Creator
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Task Force on National Health Care
White House Health Care Task Force
Meeghan Prunty
Identifier
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2006-0885-F Segment 2
Is Part Of
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Box 31
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0885-F-2.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093092" target="_blank">National Archives Catalog Description</a>
Provenance
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Clinton Presidential Records: White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Medium
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Preservation-Reproduction-Reference
Date Created
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2/6/2015
Source
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42-t-12093092-20060885F-Seg2-031-004-2015
12093092