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JAMES C. MILLER III
SUBCOMMITTEE ON HEALTH & ENVIRONMENT
COMMITTEE ON COMMERCE
U.S. HOUSE OF REPRESENTATIVES
H.R. 1415, THE "PATIENT ACCESS TO RESPONSIBLE CARE ACT"
Chairman Bilirakis, members of the subcommittee: I am pleased to have this opportunity to present the views of Citizens for a Sound Economy, a non-partisan, non-profit consumer advocacy group where I serve as counselor. As you may know, CSE represents over 250,000 Americans who believe consumer choice and competition among health care and coverage providers are the keys to consumer protection.
That said, and knowing that many of you on the committee share the same perspective, with all due respect I must ask, Why are you supporting this bill? The "Patient Access to Responsible Care Act," or PARCA, is not pro-consumer, it is anti-consumer.
Why do I say that? The way PARCA "protects" consumers is by restricting their choices. As shown in the attached list prepared by CSE policy analyst Michael Cannon, it establishes over 140 separate mandates that would dictate to consumers what benefits they must purchase, and it allows state and federal regulators to micromanage the operations of the various health plans. For example, one of these mandates would force consumers to purchase government-prescribed levels of emergency care coverage, whether they want such coverage or not.
This is not just a matter of personal freedom. These various mandates and prescriptions will raise costs to consumers as well as increase their taxes to pay for the increased government regulatory apparatus the bill envisions. For example, a recent study by Milliman & Robertson found that the 12 most common state-mandated coverage laws increase the cost of health insurance by as much as 30 percent.1
Increased costs will mean less coverage. The Congressional Budget Office has estimated that for every 1 percent increase in health insurance premiums, 200,000 people lose their employer-based coverage. Consumers who purchase coverage themselves, and who typically pay higher prices, would be hit even harder.2
For just a moment, reflect on what PARCA would do. It would allow federal and state bureaucracies to dictate health plan benefits such as the size and composition of provider networks; the workings of internal review and appeals processes; provider participation and dismissal criteria; information retrieval and disclosure; even the "styles and sizes of type" to be used in reporting such information; and the nature of quality improvement programs. The list goes on. Although some consumers may appreciate these benefits, all consumers will be forced to pay for them, whether or not they believe the benefits are worth the added costs.
PARCA declares that health insurers may not "discriminate in any activity that has the effect of discriminating against an individual on the basis of . . . age, disability, health status, or anticipated need for health services." This provision would penalize those who are at lower risk from having taken steps to reduce their own health risks. Surely such a "one-size-fits-all" approach is no more in the consumer's interest here than it would be in the market for automobiles, clothing, or, for that matter, life insurance. The market for insurance works best when premiums are based on risks, not government mandates.
Surely you don't want to pass federal legislation and establish a bureaucracy to address a problem that doesn't exist. Consider PARCA's language outlawing so-called "gag clauses" in provider contracts. According to lore, these clauses require doctors to tell patients only about approved treatment options and prohibit them from telling patients about other options that would cost the plan more money. Yet, when the General Accounting Office conducted a study of 1,159 physician contracts from 529 HMOs, it found that "gag clauses" simply do not exist.3 This is not to say that abuses do not occur in free markets. It is simply to suggest that consumer choice corrects abuses faster than does government regulation.
With respect to information, PARCA requires that health plans inform consumers what portion of their premiums are spent on administration and marketing versus actual patient care. Surely what's good for the goose is good for the gander. If you are going to require that such information be provided, why not also require that health plans tell consumers what portions of their premiums are spent on complying with government mandates, including the mandates under this bill?
Finally, in two different places, PARCA insists that it is not an "any willing provider" bill. Yet the bill protests too much. PARCA mandates that all network plans offer a "point of service" option, and then eviscerates the only means a plan might use to protect customers who do not choose that option from cross-subsidizing those who do. This creates an incentive for all consumers to choose the "point of service" option, effectively making PARCA an "any willing provider" bill after all.
Mr. Chairman and Members of the Committee: I do not wish to make light of the manifold problems of health care provision and insurance to cover consumers' needs for health care. But as you well know, many, if not most, of these problems are a reflection of government's proclivity to take every opportunity to insinuate itself between producers and consumers. In short, our problems stem from too much regulation, not too little. I urge you to resist the temptation to make matters worse.
1. See John C. Goodman and Merrill Matthews, "The Cost of Health Insurance Mandates," National Center for Policy Analysis, August 13, 1997.
2. U.S. Congressional Budget Office, "CBO's Estimates of the Impact on Employers of the Mental Health Parity Amendment in H.R. 3103," May 13, 1996, pp. 2 & 4.
3. U.S. General Accounting Office, "Managed Care Gag Clauses Not Found in HMO Contracts, But Physician Concerns Remain," August 29, 1997, p. 3.