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CONSERVATIVE DEMOCRATS CONSIDERING GLOBAL SPENDING "TARGETS" IN LIEU OF CAPS, TENNESSEE REP. COOPER SAYS; HIAA MOVES TO SUPPORT UNIVERSAL HEALTH COVERAGE

Executive Summary

Conservative Democrats in Congress are considering "global targets" rather than caps as a more "gentle" approach to health care cost containment, Rep. Cooper (D-Tenn.) said at a Dec. 2 health reporters breakfast. Cooper, Health Policy Task Force chairman for the Conservative Democratic Forum, commented that health care reform legislation could establish "a target" rather than an enforceable cap "five years out to measure the success or failure" of the reform. Noting that CDF members worked with the more liberal House Majority Leader Gephardt (D-Mo.) and Rep. Stark (D-Calif.) during the 102nd Congress to meld managed competition with global budgets, Cooper said CDF members "are hoping to work with folks now to figure out gentle ways to do it." In addition to expressing skepticism at the idea of implementing enforceable spending caps before giving managed competition a chance to work on its own, Cooper also was critical of mandated universal coverage, including employer mandates, which President-elect Bill Clinton has supported. "Let's clean up the system before we force everybody to subsidize or join it," Cooper suggested. Under the CDF plan, providers and insurers would form "accountable health partnerships" to cover individuals. AHPs would be required to treat a set of conditions for their patients. Employers would be able to deduct only the cost of the least expensive basic benefits package in their area. Self-employed individuals and those not covered by their employers would be granted the same standards of deductibility as businesses. "Reforming our tax system," Cooper remarked, "is the linchpin of managed competition." Small businesses and individuals would be banded together in Health Plan Purchasing Cooperatives to achieve economies of scale. Members of these HPPCs would choose from a menu of private health plans. Insurance market reforms, including modified community rating, would also be effected under the plan. The current Medicaid program would be replaced by a new federal program that would include all people below 100% of the poverty level; individuals up to 200% of poverty could buy into the plan on a sliding scale. Like HPPC members, individuals in the new public program would select a private AHP. The federal government would assume full responsibility for the new program, while states would take over long-term care financing. The Medicare program would remain intact. Turning to the incoming Clinton Administration, Cooper said that he "will be a team player" for the new president. "We will be able to come up with some kind of consensus" on health care reform, he predicted. While CDF staffers are working to refine their bill, Cooper said it is possible that they will not reintroduce the measure in the 103rd Congress if they can contribute to President Clinton's health care reform bill. The Tennessee Democrat, who could be tapped to fill Vice President-elect Gore's vacant Senate seat, said that Congress would have to be "moving like lightning" to pass a full health care reform package in 1993, but added that "it's possible." He predicted that "the most intensive schedule of hearings perhaps ever held on a domestic policy initiative" would occur in 1993 on how to reform the U.S. health care system. The Health Insurance Industry Association of America on Dec. 3 announced a major policy shift: it will support efforts to provide universal health care coverage. The Dec. 3 announcement comes exactly one month after President-elect Clinton's victory and reflects the health insurance industry's efforts to realign its policies in the light of probable federal action on health care reform. HIAA announced that the association's board of directors has approved a "discussion paper that would provide universal health care coverage and generate substantial revenue to help pay for health programs." According to HIAA, the draft proposal will be distributed among the association's member companies for comment and amendment. The HIAA board will reconsider the draft at its next meeting in February 1993.

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