Health Insurance: The Pro-Competition Proposals

For more than a decade, Congress and the Executive Branch have tried to stem spiraling health care costs through various regulatory actions at the Federal and State levels. Planning laws, for example, focus regulatory attention on the capacity of the health care industry to provide health services. Other laws have created programs to monitor and control the use of services provided to individual patients. Direct wage and price controls were applied to the health industry in the early 1970's and in recent years Congress has debated whether to impose controls over hospital spending in the United States. This report discusses the debate surrounding various approaches to lower health care costs.

H E A L T H INSURANCE: THE P R O - C O M P E T I T I O N PROPOSALS ISSUE BRIEF NUMBER IB81046 AUTHOR: LUndy, Janet Pernice E d u c a t i o n a n d Pliblic W e l f a r e D i v i s i o n Markus, Glenn Eaucation and Public Welfare Division THE L I B R A R Y OF C O N G R E S S CONGRESSIONAL RESEARCH SERVICE MAJOR I S S U E S S Y S T E M DATE ORIGINATED 03/18/81 DATE UPDATED 12/06/82 FOR A D D I T I O H A L I N F O R M A T I O N C A L L 287-5700 1207 CRS- 1 ISSUE DEFINITION F o r more t h a n a d e c a d e , C o n g r e s s a n d t h e E x e c u t i v e B r a n c h have tried to stem s p i r a l l i n g h e a l t h c a r e c o s t s through v a r i o u s r e g u l a t o r y a c t i o n s a t the Federal and S t a t e l e v e l s . Planning laws, for example, focus regulatory care i n d u s t r y t o provide health a t t e n t i o n on t h e c a p a c i t y of t h e health services. O t h e r laws h a v e c r e a t e d p r o g r a m s t o m o n i t o r a n d c o n t r o l t h e u s e o f Direct wage a n d p r i c e c o n t r o l s services provided t o individual patients. w e r e a p p l i e d t o t h e h e a l t h i n d u s t r y i n t h e e a r l y 1 9 7 0 ~a n~d i n recent years Congress has debated whether t o impose c o n t r o l s over h o s p i t a l spending i n t h e United S t a t e s . however, that there are alternatives to such I t h a s been suggested, r e g u l a t o r y a p p r o a c h e s a n d t h a t i t may b e p o s s i b l e t o i n c r e a s e e f f i c i e n c y a n d economy i n o u r h e a l t h s y s t e m - b y f o s t e r i n g c o m p e t i t i o n among i n s u r e r s a n d the hospitals. Advocates of p r o v i d e r s of h e a l t h s e r v i c e s , sugh as d o c t o r s and t h i s s o - c a l l e d u p r o - c o m p e t i t i o n v s t r a t e g y recommend that several s t e p s be taken t o achieve such competition. These include: changing ~ e d e r a l health laws and programs t o encourage competing health plans and insurance arrangements, providing beneficiaries with informed choices among the c o m p e t i n g a l t e r n a t i v e s , e l i m i n a t i n g l e g a l c o n s t r a i n t s cm c o m p e t i t i o n in the L e a l t h a r e a , and r e q u i r i n g consumer c o s t - s h a r i n g i n t h e purchase of health the pro-competition s e r v ~ c e s . O t h e r p r o p o s a l s h a v e b e e n made to extend 3 p p r ~ ~ Ct ho p u b l i c p r o g r a m s ( s e e CRS I B 8 1 1 7 9 , H e a l t h I n s u r a n c e : The M e d i c a r e Voucher P r o p o s a l s ) . Several l e g i s l a t i v e proposals containing these elements have been i n t r o d u c e d i n t h e 96th and .97th Congresses. In addition, the A d m i n i s t r a t i o n b e g a n d e v e l o p m e n t o f i t s c o m p e t i t i o n s t r a t e g y i n t h e summer o f 1981. I n 1 9 8 2 , t h e D e p a r t m e n t o f H e a l t h a n d Human S e r v i c e s a p p r o v e d a n u m b e r of g r a n t s , C o n t r a c t s , a n d w a i v e r s of c u r r e n t r e i m b u r s e m e n t methods for the development of Medicare and Medicaid c o m p e t i t i o n demonstration p r o j e c t s . (See S e c t i o n 6 of t h i s I s s u e B r i e f . ) B A C K G R O U N D A N D POLICY ANALYSIS Competition vs. Regulation Health care c o s t s i n t h e United S t a t e s continue t o soar, placing strains o n p u b l i c l y f i n a n c e d h e a l t h c a r e p r o g r a m s , o n e m p l o y e r s who p r o v i d e h e a l t h benefit coverage f o r workers and t h e i r dependents, a n d on i n d i v i d u a l s who care from t h e i r own personal resources. must pay f o r m e d i c a l Health e x p e n d i t u r e s now r e p r e s e n t a l m o s t 1 0 % o f the Gross National Product and ( S e e CRS I s s u e B r i e f a c c o u n t f o r more t h a n 1 0 % o f t h e e n t i r e Federal b u d g e t . IB77066, H e a l t h C a r e E x p e n d i t u r e s a n d P r i c e s . ) I n r e c e n t y e a r s , some o b s e r v e r s o f t h e h e a l t h c a r e s y s t e m in the United the States, including several free-market economists, have suggested t h a t c a u s e s of runaway i n f l a t i o n i n t h e h e a l t h s e c t o r are t h e p e r v e r s e incentives t h a t promote o v e r u t i l i z a t i o n of h e a l t h s e r v i c e s and u n n e c e s s a r y spending f o r health care. Specifically, they cite: -- The T h i r d - P a r t y Payment S y s t e m . Most h e a l t h care e x p e n d i t u r e s a r e p a i d f o r by t h i r d - p a r t y payment organizations (commercial h e a l t h i n s u r e r s , Blue Cross and - - CRS- 2 IB81046 UPDATE-~Z/O~/~Z Blue Shleld organizations, Medicare and Medicaid) that insulate the consumers of health care from t h e actual costs of Health pracziticners, care at the time i t is provided. aware that most bills will be paid for by some third-party, have few constraints on the types or quantity of the services they o r d e r o r provide. The third-parties themselves also play a largely passive role i n controlling costs. -- Fee-for-Service Payment to Physicians. Most independent physicians charge for their services on a service-by-service basis. Under this arrangement, the more services practitioners r e n d e r , the more compensation they receive. Physicians determine both the quantity and t h e prices of the services they render. The consumer plays virtually n o role in this process. -- C o s t Reimbursement for Hospitals. Most third-party payments t o hospitals are made on the basis o f the costs to the institutions of providing patient services. As a result, there are no incentives t o constrain s p e n d i n g , since lower costs mean lower revenues; on the other h a n d , more spending means greater revenues. There i s virtually no price competition among hospitals and n o shopping around for care by prospective patients. Physicians usually dictate the necessity of a hospital admission and w h e r e i t will take place. -- Impact of the T a x Laws. The tax treatment of health benefits distorts the provision and purchase o f health insurance by encouraging more coverage than warranted and thereby increasing the demand for health services. Most of the public policy responses made i n recent years to rising health costs h a v e taken the form of economic regulation. Advocates of various regulatory steps t o control health spending have held that the health care industry i s inherently anti-competitive a n d have demanded responses, such as: -- Planning controls on hospital capacity through certificate-of-need programs that require prior approval before hospital expansion can be undertaken. -- Utilization controls over hospital services by requiring hospitals to develop hospital utilization review programs and by creating a national system of professional standards review organizations (PSROs) to review the appropriateness o f hospital c a r e financed by the Medicare and Medicaid programs. -- Establishment o f limits o n physician fees under Medicare a n d Medicaid, a n d by direct controls over f e e s during the economic stabilization program (of wage and price controls) during the early 1970s. -- Controls over hospital spending through a variety of means, such a s limits to health reimbursements under Medicare a n d Medicaid, hospital rate-setting and budget review programs in various States, tiirect CRS- 3 IB81046 UPDATE-12/06/82 controls during the economic stabilization program, and the 3-year effort of the Carter Administration to impose limits on annuai increases in hospital spending. These steps, free-market supporters argue, have not only failed to stem rising health care costs; they have actually helped raise costs to health consumers. What i s needed instead, in their view, is a complete restructllring of the American health system in a direction away from regulation and toward greater competition. The advocates of the pro-competition strategy recommend major changes in employment-based health benefit programs and in the overall tax treatment of such benefits. Some also suggest that the principles of competition be extended to the design of public health care programs a s well. Among other things, these advocates support legislation that would eiiminate much of the present regulation in the health industry and rely instead on competitive forces to produce an economic and efficient health care system. There are four principal elements to the pro-competition approach: 2. -- Periodic Multiple Choice. Each consumer of health services should be offered periodically the opportunity to enroll in any one of several qualified health care plans. -- Fixed Dollar Subsidies Toward Benefit Protection. The amount of financial help that a consumer might receive toward the purchase of health plan membership (whether from an employer, Medicare, Medicaid or under the tax laws) should be in the form of a fixed dollar amount. Persons choosing more costly coverage would have to pay the extra cost themselves. -- Equal Rules for All Competitors. There should be .a uniform set of rules, such a s those governing minimum benefits, premium-setting practices, etc., for all health plans. -- Providers in Competing Economic Units. Physicians and other health care providers should be encouraged to join together in economic units (e.g., health maintenance organizations o r other groups) that would compete to offer quality health services a t the most competitive price. Growth and Costs of Employment-Based Health Benefits Advocates of the pro-competition approach would apply the principles described above to employment-based health benefits, the growth of which has In 1950, health insurance premiums been dramatic during the last 3 0 years. written by commercial health insurers and by Blue Cross and Blue Shield By 1979, the figure reached organizations amounted to almost $2 billion. T h e majority of these premiums are for employment-based over $66 billion. benefits. Several factors have contributed to this growth: -- Wage controls during World War 11. Wage and price controls were imposed by the Federal Government during the Second World War in a n effort to control inflation. However, fringe benefits, including insurance plans, were CRS- 4 IB81046 UPDATE-12/06]82 excluded from these contrcis. Expanded benefits, including health insurance, were offered by many employers as a meacs of attracting and retaining workers. -- -- Collective bargaining. The Wagner Act (National Labor Relations Act of 1935) gave employees the right to organize unions and bargain collectively with employers over w a g e s , hours and other conditions of employment. In 1 9 4 8 , the National Labor Relations Board ruled that the term "wages" included items such as pensions a n d insurance benefits. A s a result, health benefits have become an important part of the collective bargainin9 process. Favorable tax the growth i c the result of benefits when treatment. Since World War 1 1 , much of health and other fringe benefits has Seen the favorable tax treatment accorded such provided i n a work setting (see 3 below). D a t a gathered by the U.S. Chamber of Commerce indicates that health benefits a r e not only a significant portion of all employee fringe benefits, but a l s o among the fastest growing a s well. For example, all fringe benefits for workers, measured a s a percent of payroll, rose from 26.6% in 1 9 6 7 t o 37.3% in 1 9 8 1 , an increase of about 40%. Employers' costs for insurance (including hospital, surgical, medical, major medical and a small amount o f life inscrance) g r e w from 3.2% of payroll in 1967 to 6.0% in 1 9 8 1 , a n increase of 88%. T h e tremendous increases in the costs of health benefits to employers have led many of them to adopt various steps to control expenditures for employee health programs. Employers have: -- -- -- Attempted to lower costs through tighter administrative controls, such as better claims review, and by self-insuring. Changed plan design to alter utilization of employee health services through, f o r example, employee cost-sharing, second opinions prior to surgery, hospital utilization review. Attempted to control the prices charged for empioyee health services by purchasing certain items in volume or by negotiating fees and discounts. Most of these steps, however, have only had a marginal i m p a c t , if any a t a l l , on rising health benefit costs f o r employers. Overall, employers seem to have had little success in controlling provider costs, have often met with employee resistance to many of the steps, and have addressed none of the underlying causes of health care inflation. 3. T a x Preatment of Health Benefits Advocates o f pro-competition proposals believe that major changes a r e needed i n the current tax treatment of health benefits because present tax coverage policies distort decisions about t h e kind and amounts of health CRS- 5 Tax treatment of health i n s u r a n c e , in a number of different w a y s , is favorable to insured individuals. This tax treatment i n c l u d e s the exclusion and deduction of premiums f o r employment-based health b e n s f i t s , the medical expense d e d u c t i o n , and the health insurance premium deduction: -- Employer Contributions Excludable From Taxable E m p l o y e e Income. The most important t a x subsidy found i n the Internal R e v e n u e Code regarding i n c o m e taxation of the health benefits i s the exclnsion from personal payments made by a n employer for a health plan (Sec. 1 0 6 of the Code). This so-called "employer exclusion" creates a tax-shelter f o r workers who receive part of their c9mpensation i n the form of health benefits rather than as wages that would be s u b ~ e c t to personal income tax. Advocates of tke competition a p p r o a c h argue that this tax feature lowers the net cost of the for the non-taxable f r i n g e benefits a n d thereby creates more o f a demand benefit than would exist i n the absence of such a n incentive. The v a l u e of this tax f e a t u r e increases with rising marginal tax r a t e s , i.e., the benefit i s greater f o r those in higher brackets than for those in lower brackets. -- Medical Expense Deduction. Certain non-reimbursed and itemized expenses f o r medical care can be deducted from g r o s s personal income. Present l a w (Sec. 213 of the Code) permits such deductions to the extent that they exceed 3% of the adjusted gross income (AGI). Drug expenses in excess of 1 % of AGI may be counted t o determine whether the 3% threshold is reached. These criteria are intended to establish that t h e taxpayer h a s had "extraordinary" health care a n d drug expenses that reduce t h e ability to pay taxes. T h e value of this itemized deduction, like a l l deductions, a i s o rises with income. T h e deduction c a n be taken only by persons who itemize their personal tax returns. Section 2 0 2 of P.L. 97-248, the T a x Equity and Fiscal Responsibility Act of 1 9 8 2 , a m e n d s this provision by r a i s i n g the floor for Dec. 31, deductible medical expenses from 3% to 5 % of A G I , effective after 1982. In a d d i t i o n , the 1% floor for drag expenditures is eliminated a n d only drug expenses f o r prescribed drugs or insulin will b e allowed, effective after Dec. 3 1 , 1983. -- Health I n s u r a n c e Premium Deduction. T h e medical expense deduction feature of t h e present tax c o d e contains a provision (also i n Sec. 213) which allows the i n d i v i d u a l taxpayer t o deduct one-half of a n y health insurance This includes premiums premiums paid by a n individual, up to $150 a year. such contributions a r e paid by a n i n d i v i d u a l to a g r o u p benefits p l a n , if r e q u i r e d , a n d a n y premiums paid for a plan purchased o n a n individual basis. Any premiums n o t counted under this test may be included i n the amounts added up to d e t e r m i n e whether the q'extraordinaryqvexpense (3% of AGI) test can be met. Effective a f t e r Dec. 3 1 , 1 9 8 2 , Section 2 0 2 of P.L. 9 7 - 2 4 8 , the Tax Equity a n d F i s c a l Responsibility ' ~ c t of 1 9 8 2 , eliminates this deduction. However, a m o u n t s paid for insurance may be counted toward t h e medical expense deduction (5% of AGI). -- Employer Contributions a s Deductible Business Expenses. The Internal Revenue C o d e p e r m i t s employers t o deduct a s business e x p e n s e s contributions to employee health plans regardless of the design or f e a t u r e s of such plans (Sec. 162(a)). S o m e of the sponsors of pro-competition legislation would permit continued employer deductibility of such contributions Only if certain requirements w e r e met. T h e a m o u n t of Federal subsidy through the tax code expenditures," which a r e revenue losses t o the Treasury "tax represents arising from a ' IB81046 CRS- 6 UPDATE-~Z/G~'/ provlslon l n the cax code that extends special or selective relief to certain groups of taxpayers. According to the President's F Y 8 3 Budget P r o p o s a l , FY83 for the tax expenditures for health will amount to aboct $16.4 billion employer exclusion a n d an additional $4.2 billion for the medical expense deduction (including the deduction for health insurance premiums). In addition, the tax subsiCies for health beneflts a l s o result in further losses to State income taxes and lower Soclal Security revenues, totaling approximately $ 1 0 billion. As a result, tax subsidies for health benefits comprise one of the largest Federal programs to f i n a n c e health care. 4. The Elements of Pro-Competition Proposals There a r e several elements that can be found in the various pro-competition proposals. These elements fall i n t o two broad categories: -- Those which make changes in the way i n which employers provide health benefits to their employees, and -- Those which change the tax treatment o f health benefits. Limit the Employer Contribution to a Maximum Amount. O n e of the elements contained i n pro-competition proposals places a l i m i t or c a p on the amount a n employer could contribute toward the premium c o s t of a health plan. Contributions in excess of that limit would be included in t h e employee's gross taxable income. Advocates of such a limit a r g u e that: -- Employees would become more cost-conscious in t h e selection of their health plans if the employer contributions were limited, -- Limits on the amount of the employer contribution that is deductible a s a business expense would decrease the a m o u n t of F e d e r a l subsidy toward the purchase of private health insurance. Some problems have been raised about proposals contribution: -- to limit the employer's A national f l a t limit would not take i n t o a c c o u n t the differences i n the cost of providing benefits in o n e geographic a r e a a s opposed to another, -- A limit would discriminate against employment groups with a high proportion of older workers or less healthy workers whose health costs a r e greater, -- A limit on the employer's contribution could reduce a n employer's incentive to be concerned about health care c o s ~ s CRS- IB81046 7 U P D A T E - ~ ~ / O ~ / ~f h e i s p r e s e n t l y a c o r a b o v e c h e l i m i t , -- A l i m i t might i n c r e a s e t h e p o s s i S i l i t y that some e m p l o y e r s would d e c r e a s e o r " r o l l - b a c k " e x i s t i n g b e n e f i t s f o r employees now r e c e i v i n g c o n t r i b u t i o n s g r e a t e r t h a n t h e l i m i t . R e q u i r e a Choice of P l a n s and an Equal Employer Dollar Contribution tc Each. A n o t h e r e l e m e n t o f p r o - c o m p e t i t i o n p r o p o s a l s i s a r e q u i r e m e n t t h a t the employer o f f e r a c h o i c e of p l a n s or plan options, with an equal dollar Presently, the c o n t r i b u t i o n by t h e e m p l o y e r t o e a c h p l a n o r o p t i o n o f f e r e d . a single health insurance plan to t h e i r majority of employers offer employees. I n a d d i t i o n , maRy p r o - c o m p e t i t i o n proposals provide financial i n c e n t i v e s f o r employees t o choose lower c o s t h e a l t h p l a n s o r options. The i n c e n t i v e s w o u l d t a k e t h e f o r m o f r e b a t e s t o t h e e m p l o y e e s wno select lower cost coverages. The i n t e n d e d e f f e c t s o f t h e m u l t i p l e c h o i c e option, contribution requirement, and t h e r e b a t e a r e t h a t : -- tae equal employer E m p l o y e e s s h o u l d h a v e t h e o p p o r t u n i t y t o c h o o s e among v a r i o u s p l a n s , w i t h a n economic i n c e n t i v e t o choose a lower c o s t plan or option, -- T h e s e r e q u i r e m e n t s would p o t e n t i a l l y promote g r e a t e r c o m p e t i t i o n among i n s u r e r s t o o f f e r t h e m o s t a t t r a c t i v e l o w - c o s t -- Health care providers, sucQ a s d o c t o r s , option, would be e n c o u r a g e d t o o r g a n i z e themselves i n t o competing economic groups i n o r d e r t o o f f e r t h e most a t t r a c t i v e low-cost o p t i o n . Some p r o b l e m s w h i c h h a v e b e e n r a i s e d w i t h t h e include: -- The a d m i n i s t r a t i v e c o s t s ' t o multiple choice provision t h e employer would p r o b a b l y b e i n c r e a s e d by h a v i n g t o o f f e r more t h a n o n e p l a n o r o p t i o n , -- By r e q u i r i n g a n e m p l o y e r t o o f f e r m o r e t h a n o n e p l a n , less . e f f i c i e n t carriers might be a s s u r e d a market they do n o t now h a v e . Patient cost-sharing Require Plans t o Contain Cost-Sharin.3 F e a t u r e s . requirement that r e q u i r e m e n t s i n h e a l t h i n s u r a n c e p l a n s are d e f i n e d as any c o v e r e d i n d i v i d u a l s p a y some p o r t i o n or s h a r e of their covered medical expenses. Patient cost-sharing could include deductibles, which a r e t h e d o l l a r amounts t h e p a t i e n t must pay i n i t i a i l y b e f o r e t h e i n s u r e r w i l l assume any liability for the remaining covered services; coinsurance, or a p e r c e n t a g e of t h e e l i g i b l e e x p e n s e s f o r which the patient is liable: and copayments, o r f l a t d o l l a r amounts r e q u i r e d p e r u n i t of s e r v i c e o r unit of time. CRS- 8 IB81046 UPDATE-12/06)'82 Severai reasons a r e suggested by ~ro-competition advocates patient cost-sharing requirements in health insurance plans: -- Cost-sharing Patient cost-sharing -- c r i t i c s of I t is unclear s i n c e h e must e s t a b l i s h e s l i m i t s on t h e i n s u r e r ' s l i a b i l i t y a n d , as a r e s u l t , insurance. However, rncluding r e q u i r e m e n t s would m o t i v a t e t h e i n s u r e d p e r s o n t o b e more c a r e f u l a b o u t i n c u r r i n g h e a l t h e x p e n s e s , pay a p o r t i o n of h i s medical b i l l s , -- for l i m i t s t h e premium c o s t o f patient cost-sharing the requirenents point out that: whether economics i s t h e o v e r r i d i n g f a c t o r i n matters o f h e a l t h c a r e , e v e n more i m p o r t a n t t h a n p s y c h o l o g i c a l , personal, and family considerations, o r the other influences t h a t may a f f e c t how i n d i v i d u a l s s e e k o r u s e m e d i c a l c a r e , -- D e d u c t i b l e s a n d c o i n s u r a n c e c a n b e made l a r g e e n o u g h t o d e t e r m o s t p e r s o n s f r o m o b t a i n i n g c a r e , b u t some q u e s t i o n w h e t h e r t h i s s h o u l d b e one of t h e g o a l s f o r h e a l t h i n s u r a n c e , -- P o s t p o n e m e n t o f n e e d e d t r e a t m e n t may l e a d t o c o m p l i c a t i o n s o r o t h e r c o n d i t i o n s t h a t u l t i m a t e l y r e q u i r e even more expensive treatment l a t e r on, -- Usually t h e choices about type and q u a n t i t y of t h e h e a l t h s e r v i c e s u s e d a r e d e t e r m i n e d n o t by i n s u r e d p a t i e n t s b u t b y p h y s i c i a n s a n d o t h e r p r a c t i t i o n e r s who a r e n o t s i g n i f i c a n t l y i n f l u e n c e d by p a t i e n t c o s t - s h a r i n g r e q u i r e m e n t s . for Health I n s u r a n c e Premiums. The health R e p e a l t h e Tax D e d u c t i o n their i n s u r a n c e premium t a x d e d u c t i o n a l l o w s t a x p a y e r s t o d e d u c t o n e - h a l f o f h e a l t h i n s u r a n c e premiums, up t o a l i m i t o f $150. This deduction is a tax as a n i n c e n t i v e f o r the purchase of health subsidy designed i n part insurance. There a r e various reasons given for eliminating the health i n s u r a n c e premium d e d u c t i o n : -- T h e d e d u c t i o n may e n c o u r a g e p e o p l e t o b u y m o r e h e a l t h insurance, -- further stimulating health care spending, The d e d u c t i o n p r o v i d e s g r e a t e r b e n e f i t n o t f o r t h e low-income, b u t f o r upper-income t a x p a y e r s . This happens because persons who d o n o t i t e m i z e d e d u c t i o n s , a g r o u p t h a t i n c l u d e s m o s t Also, t a x savings low-income p e r s o n s , c a n n o t b e n e f i t from i t . depend on t a x p a y e r s ' marginal r a t e s , which i n c r e a s e w i t h r i s i n g t a x a b l e income. Taxpayers w i t h higher t a x a b l e incomes CRS- 9 IB81046 UPDATE-12/06/82 (This s e c e i v e higher subsidies for each doiiar of deduttible expenses. tax deduction was eliminated, effective after Cec. 3 1 , 1 9 8 2 , by Section 202 of H.R. 4 9 6 1 , the Tax Equity and Fiscal ResponsiSility Act of 1982.) Include Employer Contributions 5 Employee Income. The exclusion of employer health contributions from e m p l o y e e s f t a x a b l e income provides a considerable incentiF?e for employees to bargain f o r , a n d for employers to offer, more health benefits coverage. It has been argued by the pro-competition advocates that the exclusion thus encourages employees to purchase more insurance than may be necessary, leading to inefficiency a n d excessive cost in the use of health services. With extensive insurance coverage, there is little reason for the employee o r the health c a r e provider to be cost-conscious about the type o r quantity of health care provided. The exclusion of employer-provided health contributions is csed a s a means of "encouraging" employers to offer health plans which a r e consistent with the pro-ccmpetition approach. F o r example: -- T h e exclusion could be made available only if the employer-provided health plan meets certain s t a n d a r d s , such a s cost-sharing requirements, minimum benefits, multiple choice of plans, or a n equal employer contribution to each, -- T h e exclusion could be made availaale only if t h e employer did not exceed a limit o n the a m o u n t of employer contribution to a health plan; in other w o r d s , c o n t r i b u t i ~ n s i n excess of the l i m i t would not be excluded from employee income. One of the problems with eliminating the exclusion i s that employees could be penalized for a n employer's failure to comply with a n y plan requirements. Increase o r Eliminate the Medical Expense T a x Deduction. The medical expense tax deduction allows taxpayers to d e d u c t unreimbursed medical T h e deduction is a tax expenses exceeding 3 % of adjusted gros's income. subsidy designed t o cushion the impact of medical c o s t s not covered by health insurance. Raising the deduction level would reduce the r e v e n u e losses from the provision and provide the tax subsidy only to those taxpayers with very large medical outlays which a r e unreimbursed by insurance. Raising or eliminating the deduction could introduce a n element of cost-consciousness in those taxpayers who can avail themselves o f this tax provision. (The 3% floor o n Sec. this tax deduction was raised to 5 % , effective after Dec. 3 1 , 1 9 8 2 , by 202 of H.R. 4 9 6 1 , the T a x Equity and Fiscal Responsibility Act of 1982.) a T a x Credit. Convert the Medical Expense Tax Deduction to Another element sometimes included in considerations about c h a n g i n g incentives under the tax l a w s which a f f e c t health benefits would c h a n g e the medical expense Reasons given for the change: deduction to a tax credit. -- It would then be possible for a l l taxpayers to receive the s a m e rate of subsidy for each dollar contribution to a health plan, regardless o f their income, -- S i n c e the tax subsidy would be fixed and would not vary with the price of the health insurance option chosen, it should encourage employees to purchase less expensive health p l a n s , -- T h e subsidy would be available to a l l taxpayers, not just t h o s e who itemize their deductions. 5. Problems anC Concerns A number of questions have been raised in elements of the pro-competition proposals: Connection with some of the Adverse Selection. The principle behind a d v e r s e selection is that people who obtain insurance or increase their coverage a r e generally those who w a n t or need i t the most, usually those who represent a greater-than-average probability of risk. Though a d v e r s e selection is a problem i n any insurance scheme, i t may be particularly troublesome if individuals a r e not o n l y permitted to choose among plans or plan options but a r e also strongly encouraged to d o so by means of certain incentives, 'such a s cash rebates. If employees a r e offered a choice between a low-cost o p t i o n , which might contain more patient cost-sharing o r f e w e r benefits, and a m o r e costly, m o r e comprehensive plan with little or n o patient cost-sharing, those employees who expected f e w medical expenses i n the near f u t u r e could b e expected to pick the low-cost plan. Those employees who expected substantial medical expenses might be expected to join o r , if given t h e opportunity to c h a n g e their enrollment, might switch to t h e more comprehensive plan until their medical n e e d s were taken care of. If all the high medical r i s k s shifted t o the more comprehensive p l a n s , the c o s t s of the comprehensive plan-s would soar, a n d the benefits o f spreading risk among a l l members of a group with varying l e v e l s of health care needs would diminish. D e s i r e f o r Insurance. Will people choose t o have less health insurance coverage? Experience under the F e d e r a l Employees Health B e n e f i t s Program a n d other programs indicates that most people seem to have a preference for m o r e comprehensive, low-deductible coverage. Will rebates o r other types o f incentives change people's ideas a b o u t how much insurance c o v e r a g e they think they need? Incentive Not t o Insure Adequately. Will offering i n c e n t i v e s , such a s cash r e b a t e s , t o choose low-cost insurance options encourage certain persons to purchase less health benefits coverage than they o r their dependents might need? Information Costs. For a competitive market to w o r k , i t i s necessary t h a t buyers of health c a r e be reasonably well-informed a b o u t t h e alternatives they are considering i n order to make intelligent choices f o r themselves. Health care and health insurance a r e very complex f i e l d s , very difficult for t h e average person to understand fully. What must be d o n e to m a k e i t easier f o r the a v e r a g e health c a r e consumer to understand his purchase o f health c a r e services o r health insurance? What would be the c o s t to the system of a n y changes o r education process that might be necessary? D o health c a r e consumers want to become better informed and shop around f o r health care a n d health insurance? Cost Containment. Will there be actual cost savings under the pro-coKpetltlon a p p r o a c h e s , or would zosts merely be snlfted = o another part of the health care system? For example, would consumers end up paying a greater portion of their health bills? Would bad debts increase, forcing provrders of health care to shoulder m o r e of such costs? Pressure o n Providers of Health Care to Lower Prices. Probably the most important question is whether by changing insurance incentives, i t follows that provider pricing behavior can be influencee. Armed with low-option health plans, will patients then shop around for the hospital or doctor charging the least expensive prices? Can the pro-competition approaches generate enough o r the right kind of market pressure on providers to lower the prices of health care services? Would a n incentive for providers to lower prices lead to any decreases in the quality of care? Recent Administration Activity of In 1982, the Department of Health and Human Services awarded a number grants, contracts, and waivers of Medicare reimbursement methods for the development of Medicare and Medicaid demonstration projects in the a r e a o f competition. Contracts and/or waivers were awarded in October 1 9 8 2 to 2 1 organizations f o r the development of Medicare competitive health care systems in 24 cities a c r o s s the country. The demonstration projects were designed to encourage competition among insurers and providers by allowing Medicare plans which would ~ 3 m p e t e for recipients a choice of alternative health beneficiaries by providing more attractive benefits a t reduced costs. Included in the projects a r e a broker model, where the broker will perform centralized enrollment and marketing activities for a l l the Medicare beneficiaries in a county, and preferred provider organizations, which are panels o f providers which provide services according to negotiated fee schedules, usually a t a discount. Grants were awarded in August, 1 9 8 2 , f o r the development of Medicaid competitive health care systems in Florida, Minnesota, Missouri, New J e r s e y , and New York. T h e projects a r e designed t o measure potential savings i n enrollees rather than health costs b y paying a f e e i n advance f o r Medicaid the traditional fee-for-service payments. S o m e o f the concepts to be tested include: consumer choice models, where beneficiaries will be offered various choices of prepaid health care options; competitive bidding to determine the most cost effective providers from which beneficiaries can then select; vouchers for the purchase of health insurance; and c a s e management, where primary care physicians will be given responsibility for the management of a patient's care. LEGISLATION T h e major include: prc-competition S. 1 3 9 (Hatch) 96th Congress) proposals introduced in the 97th (Identical to S. 1 5 9 0 introduced by Sen. Schweiker Congress in the Comprehensive Health Care Reform Act. Federal Tax Benefits. Prohibits the exclusion of employer health plan contributions from employee taxable income and the deduction o f employer health plan contributions as business expenses unless the employer meets the requirements of this legislation. Copayment Option. Requires employers to offer their empioyees, if such plans are available, a t least o n e group health benefit plan for inpatient hospital services having a n a n n u a l copayment for hospital services of a t least 25%, which would be paid by employees. Specifies that the copayment would not apply when the employee a n d his family incurred, during a calendar y e z r , out-of-pocket medical expenses which exceed 20% of the f a m i l y ' s combined earnings. Specifies that if employees a r e represented by collective bargaining or other employee representative, the offer of the copayment option plan must first be made to such representative a n d , if a c c e p t e d , would then be made t o employees. Employer Contribution and Employee Rebates. Requires employers who pay for group health benefit plans for their employees to make the same payment per enrolled employee toward each plan offered, regardless of the a c t u a l premium cost of a plan. If the employer's payment is more than the premiur eost of = h e health plan selected by the employee, specifies that t h e employee would receive the excess amount i n cash o r other benefits from the employer. P r o v i d e s that this excess amount would not be considered taxable income to the employee. Prohibits employers from lowering che the amount of their payments per employee for health plans after effective date of the b i l l , except to comply with the requirement that employers pay for a health benefic plan no more than the premium cost of the most costly health plan offered by the employer i n which a t least 1 0 % of his employees are enrolled. Multiple Choice of Health Plans. Requires employers having a t least 2 0 0 full-time employees to offer a choice to employees o f not less than three qualified health p l a n s , offered by different carriers, to the extent that such plans a r e available. Catastrophic Illness Insnrance. Prohibits the exclusion of health plan Contributions and the enployer deduction, for employers with 5 0 or more full-time employees, for contributions to health plans which dc not include catastrophic benefits, coverage o f d e p e n d e n t s , and coverage continuity a s described in this legislation. Requires health benefit plans to pay f o r medical expenses for tne covered employee and f a m i l y , without a n y cost sharing, when the employee out-of-pocket medical expenses and family have incurred i n a calendar year which exceed 20% of the family's combined earnings. Requires all carriers (including voluntary a s s o c i a t i o n s , corporations, partnerships or other non-governaental organizations which provide, pay f o r , or reimburse health services, including health plans sponsored by employee organizations) to enter into arrangements in each State where they do business in order to provide catastrophic insurance a n d preventive c a r e coverage to individuals in plans providing the State who a r e not eligible for (a) group health benefit qualified catastro2his and preventive coverage and (b) government programs of health care. P r o h i b i t s any carrier failing to meet these reqcirements from participating i n a n y health benefits program paid f o r with Federal funds. Establishes catastrophic benefits under the Medicare program. Preventive Care. Prohibits the exclusion of health plan contributions and the employer deduction, f o r employers with 5 0 o r more full-time employees, for contributions to health plans which d o not include certain preventive care services. S. 1 3 9 was introduced Jan. 1 5 , 1 9 8 1 ; referred to Committee o n Finance. H.R. 8 5 0 (Gephardt/Stockman) 96th Congress) (Identical to H.R. 7527 introduced in the National Health C a r e Reform Act of 1981. Actuarial Categories and Healthcare Areas. Requires the Secretary. (of Health and Human Services) to establish actuarial categories (an aged a n d disabled category, a n d other categories based o n a g e , s e x , marital s t a t u s , and dependents) in order to determine healthcare contributions and premium charges under this legisiation. Also requires the Secretary ro divide the cguntry i n t o healthcare a r e a s (urbanized and nonurbanized). Healthcare Contributions. Entitles a l l U.S. residents who a r e either citizens or lawful resident aliens to a healthcare contribution. Specifies that the contribution could take several forms: (1) for employees whose employers pay amounts towards the premiums o f qualified health plans, a n exclusion from income subject to Federal tax e q u a l t o the amounts paid by the employers; (2) for individuals to the who purchase qualified health p l a n s , a refundable tax credit equal individuals, a voucher amount paid f o r premiums; (3) f o r aged o r disabled an enabling such individuals t o purchase qualified health plans as -. alternative to t h e Medicare program; a n d (4) for certain low-income individuals, a voucher enabling such individuals to purchase qualified health plans (if the individual's State has elected not to participate in the Medicaid program). Excludes employer health plan contributions from g r o s s employee i n c o m e only i f certain conditions a r e met, including: the employer plan and has determined, before the e ~ p l o y e e ' s selection of a qualified without regard t o t h e health plan selected or the premium of such plan, the maximum a m o u n t o f contribution the employer will make toward the premium of a health plan selected by a n employee; the employer agrees to pay each employee an amount equal to any amount by which the premium of the qualified plan enrolled i n by t h e employee is less than the maximum payment amount agreed to by the employer (rebate), up to a limit of $ 5 0 0 increased o r decreased by changes in the G N P deflator; and continuity of coverage requirements. Sets a limit o n t h e maximum amount a n employer may contribute to a health plan, equal to t h e l a r g e r of (1) in 1984-1986, t h e Federal healthcare contribution for a g e d i n d i v i d u a l s , a n 8 in 1 9 8 7 or later, the weighted average cf premiums of qualified plans f o r similar actuarial categories an8 healthcare a r e a s , increased o r decreased by changes in the G N P deflator; (2) the amounts paid on behalf o f t h e employee by the employer f o r medical o r hospital costs which were excluded from gross employee income durihg 1 9 8 0 ; o r (3) the amounts paid by the employer o n behalf of the employee f o r medical o r hospital costs under 1 , i981. terms of a c o l l e c t i v e bargaining agreement agreed to before Jan. Qualification of Plans. Requires the Secretary to certify health plans as qualified i f they meet t6e following requirements: provision of specified basic health c a r e services; membership by written agreement with the enrollee; enrollment o f local residents only; periodic open enrollment.; enrollment of s p o u s e a n d dependents of a n enrolled individual; establishment of annual premiums i n each healthcare a r e a , for each . a c t u a r i a l c a t e g o r y , including a n y copayment amounts n o t to exceed $2,900 (changed i n subsequent years accordiag to the percentage increase or decrease in the Gross National Product deflator), except for low-income individuals with vouchers, w h o cannot be charged f o r any out-of-pocket expenditures; reporting requirements concerning e n r o l l m e n t , changes in coverage, and financial information; preparation a n d distribution of detailed brochures describing plan coverage and other plan information; and the plan a g r e e s to permit members to r e f u s e to the provision of a health care service by a person designated by the plan provide that s e r v i c e , and permits health personnel t o r e f u s e to deliver a modality o f health c a r e service f o r professional, ethical, o r moral reasons. Other Health P l a n Provisions. Establishes the rights of qualified plans a n d health c a r e deliverers. Establishes the actions for which a qualified plan could be d i s q u a l i f i e d , such a s reduction of servic-es, increase in out-of-pocket expenditures beyond the limits of the legislation, and anti-trust violations. Requires the Secretary to prepare and distribute pamphlets describing the qualified plans i n each health c a r e area. Plan Membership Provisions. Authorizes individuals to a c t a s healthcare a g e n t s 25 or less eligible individuals. for eligible i n d i v i d u a l s , o r groups of I11 (Unemployment Prohibits F e d e r a l payments t o States under titles Compensation) o r I V (Aid to Families with Dependent Children and Child - Welfare Services) of the Social Security Act unless the S t a t e makes payments only to individuals who are members of qualified plans. Authorizes payments (Supplemental Security Income for the Aged, BlinC and under title XVI Disabled) anf! the Food Stamp Act of 1 9 7 7 o n l y if the individual is a member of a qualified plan. Repeals authorization f o r the Federal Employees Health Benefits P r o g r a m , requiring the Federal Government to make contributions in specified amounts toward the premium cost o f a health plan chosen by the employee. Plan Administrative Provisions. Authorizes the Secretary to permit Federal guarantees of policies of i n s u r a n c e or reinsurance issued to qualified plans o r self-insurance programs o f qualified plans. Establishes within the Treasury Department a Health Benefits Assurance Corporation to provide financial certification and r e v i e w of qualified plans and to establish a protective f u n e , composed of per capita contributions from a l l qualified plans, to a s s u r e the provision o f health services to members of qualified plans that are unable to m e e t their financial obligations. Authorizes the Secretary to make payments t o healthcare service doliverers that have furnished basic health care s e r v i c e s to individuals who a r e not qualified plan members and have not been a b l e to collect payment f o r such services. Arbitration and Criminal ~ e n a l f i e s . Establishes procedures for arbitration of claims. Establishes a United States Health Court and Health C o u r t o f Appeals to have jurisdicti0.n over a l l civil claims and disputes arising under this legislation. Specifies criminal penalties for violations under this legislation. Miscellaneous Provisions. Authorizes the Secretary to make Grants o r contracts to compensate entities that a r e n o t educational institctions for n o t more than 70% of the d i r e c t cost of providing graduate medical education a n d training for health c a r e professionals. Preempts all S t a t e a n d local l a w s , regulations and administration a c t i o n s which interfere with the implementation o f this legislation. Authorizes such sums a s may be necessary to carry out this legislation. Amends the I n t e r n a l Revenue C o d e to eliminate the eeauction for health insurance premiums. Requires specified maintenance of effort by States which elect t o have healthcare contributions made to their low-income population i n l i e u o f Medicaid assistance. Repeal of Existing Laws. Repeals the following provisions of t h e Social Security uniform Act: Professional Standards Review Organization (title 2 1 , part B); reporting (section 1121); capital expenditure limitations (section 1122); hospital utilization review plans and hospital by-laws with respect to Staff or physicians under t h e Medicare program (section 1861(e), paragraphs (3) and (section (6), and section 1 8 6 1 ( k ) ) ; Medicare customary charge limitations reasonable cost limitations which limit 1 8 1 4 (b) (1) ) ; and Medicare reimbursement to health facilities (section 1 8 6 1 (v) (1)(A) ) Repeals the following provisions o f the Public Health Service Act: health maintenance organizations (title X I I I , other than s e c t i o n 1308(e)); health planning (title XV); and health resources developemnt (title X V I , other than sections 1602(d) and 1622). Provides that if more t h a n 50% of persons eligible for Medicare choose to receive a healthcare voucher i n s t e a d , legislation authorizing the Medicare program would be repealed. Effective Dates. In Jan. general, provides that this legislation w o u l d be effective o n o r afte? . H,.R. 8 5 0 was introduced Jan. 1 6 , 1 9 8 1 ; referred to Committees o n Ways and Means, Energy and Commerce, the Judiciary, a n d Post Office and Civil Service. S. 4 3 3 (Durenberger, Boren, Heinz) 96th Congress. ) (Identical to S. 1968 introduced i n the Health Incentives Reform Act of 1981. Employer Contributions to Health Benefit Plans. Amen&s the Internal Revenue C o d e to provide that any employer contributions to a n employee health 3 r d e n t a l benefit plan which exceed the l ~ m l t a t i o n s established by this iegislation would be inclnded i n the employee's g r o s s income. Specifies that the limitations .in 1 9 8 2 a r e the following a m o u n t s , increassd or decreased in subsequent years by percentage changes i n t h e medical care component of the Consumer Price Index: $ 5 0 for employee o n l y coverage, $100 for employee and s p o u s e , $125 for employee and family, and amounts to be determined by the Secretary (of Health a n d Human Services) f o r self-insured employers. Amends the Internal Revenue Code to provide that if an employer fails to comply with any requirements of the legislation, any contribution the employer makes toward a n employee health plan would be non-qualified and included i n the employee's gross income. Multiple C h o i c e of Plan Options. Requires that a n y employer having more than 1 0 0 employees covered under a health benefit plan a t any time during a calendar y e a r must provide that such plan includes at least three opcions, each offered by a separate carrier, which meet requirements pertaining to continuity of coverage, coverage f o r employee's f a m i l y , minimum benefits, ar~d catastrophic expense protection. Equal Contribution Requirements. Provides that if a n employer offers more than one health benefit plan o p t i o n , the anount of the employer's contribution could not depend o n which option a n employee chooses. Requires that, if the contribution amount selected by such employer exceeds the cost of the option chosen by the employee, the employer must contribute the difference to the employee i n the form of cash (if the employee so wishes) or other compensation o r benefit (the rebate). Provides that, i n order for an employer's Continuity of Coverage. contribution to be qualified, the contribution must be to a plan or plan optior that provides: (1) continued group coverage for 3 0 days in t h e event o f d e a t h , separation from employment .or divorce, with the e m ~ l o y e rcontinuing h i s contribution during that period; (2) continued group coverage for a n additional 1 8 0 days if the employee pays the premium rate; and (3) for the r i g h t of t h e employee to convert during the 30-day or 180-day period to a n individual health benefit plan or option which contains specified minimum benefits a n d catastrophic expense protection, without regard to prior medical condition o r proof of insurability. Coverage for Employee's Family. Provides t h a t , i n order for an employer's contribution to be qualified, the contribution must be to a plan or plan option that covers a n employee's spouse and qualified children a n d allows such children to convert to a n individual plan o r option without regard t o prior medical condition o r proof o f insurability. Minimum Benefits. Provides that, in order fo-r an employer's contribution to be qualified, t h e contribution must be to a plan o r plan option which a t least provides coverage for the s a m e types of (Medicare), services covered by title X V I I I of the Social Security Act without regard to Medicare's requirements for deductibles, copayments, a n d provision o f covered services by particular persons or facilities. Catastrophic Expense Protection. Provides that, in order for an employer's contribution to be qualified, the contribution must be to a plan or plan option that provides for payment of 1 0 0 % of the cost of minimum benefits provided t o a covered individual during a catastrophic benefit period. Defines a catastrophic benefit period a s beginning when a n individual and his family incurs out-of-pocket expenses for minimum benefits in excess o f $3,500 a n d ending a t the end of that calendar year. Effective Date. Jan. 1 , 1984. Special R u l e f o r Employment Taxes. Specifies that employer contributions to health plans that exceed the limitations a n d to health plans that do not meet the qualifications specified i n this legislation would be included i n the g r o s s income of the employee a n d would be treated a s paid in cash to the employee, not a s paid under a health plan of the employer. Provides that the r e b a t e , if paid in cash, would not be subject to Social Security, Railroad Retirement, a n d Federal Unemployment taxes, but would be subject t o personal C o ~ r d i n a ~ e dAdministration. Requires the Secretary of the income tax. Treasury to coordinate with the Secretary of Health and Human Services in determining whether health plans or options meet the requiremencs of this legislation related to minimum benefits and catastrophic expense protection. S 4 3 3 was introduced Feb. 5 , 1 9 8 1 ; referred to Committee on Finance. HEARINGS U.S. Congress. House. Committee o n Ways a n d Means. Proposals to restructure the financing of private health insurance. Hearings, 9 6 t h Congress, 2d session. Feb. 2 5 , 1980. Washington, U.S. Govt. Print. Off., 1980. 273 p. "Serial no. 96-79" ----- P r o p o s a l s to stimulate Competition in the financing and delivery o f health care. H e a r i n g s , 97th Congress, 1 s t session. Sept. 30, Oct. 1 , a n d Oct. 2 , 1981. Washington, U.S. Govt. Print. Off., 1981. 749 p. "Serial no. 97-24" U.S. Congress. Senate. Committee on Finance. Proposals to stimulate health care competition. Hearings, 96th Congress, 2d session. Mar. 18-19, 1980. Washington, U.S. Govt. Print. Off., 1980. 4 6 2 p. REPORTS AND CONGRESSIONAL DOCUMENTS U-S. Congress. C O n g r e S ~ i O n a l B u d g e t Office. Containing medical care costs through market forces. Washington, U.S. Govt. Print. Off., May 1982. 6 7 p. U.S. Congress. House. Committee o n Ways a n d Means. Description of proposals t o stimulate competition in the financing and delivery o f health care. Washington, U.S. Govt. Print. Off., Sept. 2 4 , 1981. 1 2 p. At head of title: Committee print. ----- Summary o f testimony received on proposals t o stimulate competition i n the financing and delivery of health care. Washington, U.S. Govt. Print. Off., Nov. 1 2 , 1981. 1 0 0 p. At head of title: Committee print. U.S. Congress. J o i n t Committee on Taxation. Description of proposals t o restructure t h e incentives f o r coverage under employer health plans. Washington, U.S. Govt. Print. Off., Feb. 2 2 , 1980. 23 p. At head of title: J o i n t committee print. ----- Description o f S. 1968 a n d other proposals t o restructure the incentives for coverage under employer health plans. Washington, U.S. Govt. Print. Off., Mar. 1 5 , 1980. 1 9 p. At head of title: J o i n t committee print. CHRONOLOGY OF EVENTS 07/15/82 -- Committee on Ways and Means tentatively approved a voluntary Medicare voucher system (Sec. 1 1 2 of H.R. 6 8 7 8 ) which was later deleted by House-Senate conferees during the conference on H.R. 4 9 6 1 , the Tax Equity and Fiscal Responsibility Act of 1982. 10/02/81 -- Representatives Gradison a n d Gephardt introduced H.R. 4666 (the Voluntary Medicare Option Act). 09/30-10/02/81 -- Hearings held by House Ways and Means Committee on pro-competition proposals. 02/05/81 -- Senator Durenberger introduced S. 4 3 3 (identical to S. 1968 introduced i n 9 6 t h Congress). 01/16/81 -- Representatives Gephardt a n d Stockman introduced H.R. 8 5 0 (identical to H.R. 7 5 2 7 i n 9 6 t h Congress). 01/15/81 -- Senator Hatch introduced S. 1 3 9 (identical to S. 1 5 9 0 i n 9 6 t h Congrsss). 06/09/80 --- Representative Jones (Oklahoma) introduced H.R. 06/09/80 03/18-19/90 02/04/80 --- 11/01/79 -- 02/25/80 7528. Representatives Gephardt a n d Stockman introduced H.R. -- Hearings held by Senate F i n a n c e Committee. Hearings helC by House W a y s a n d Heans Committee. Representative Martin introduced H.R. 6405. Senator Durenberger introduced S. 1968. 09/25/79 --- 09/06/79 -- Senator Kennedy introduced S. 1 7 2 0 (sane bill, H.R. introduced by Representative Waxman). 07/26 7 9 -- Senator Schweiker introduced S. 1590. 10/30/79 7527. Representative Ullman introduced H.R. 5740. Carter Administration bill (H.R. 5 4 0 0 / ~ . 1812) introduced by Representative Range1 and ,Senator Ribicof f. 5191, ADDITIONAL REFERENCE SOURCES Arras, John D. Health care vouchers a n d the rhetoric o f equity. The Hastings Center report, v. 1 1 , no. 4 , August 1981: 29-39. P r i c e competition i n Association of American Medical Colleges. the health care market place. "Issues for teaching hospitals." Washington, March 1981. 1 8 p. Bliss, Donald T. Energing deregulation in health legislation. Ripon f o r u m , v. 1 6 , Mar./Apr. 1980: 5-10. Blue C r o s s a n d Blue Shield Associations. A third party payers perspective -- Medicare vouchers Sept. 2 8 , 1981. 14 p. ----- Competition and consumer choice. Washington, March 1981. 3 1 p. Chamber of Commerce of the United States. Employee benefits, 1979. Washington, Chamber of Commerce, 1980. 36 p. Enthoven, Alain C. Health plzn: the only practical solution to the soaring cost of medical care. Reading, Mass., Addison-Wesley Pub. Co., 1980. 1 9 6 p. G e l m a n , Judith 2 . Competition and health pianning. U.S. Govt. Print. Off., 1982. 1 8 9 p. Washington, Health Insurance Association of America. Competition in the health care system a n evaluation of the pro-competition bills. Washington, Health Insurance Institute, March 1981. 14 p. -- Drawing the lines for the d e b a t e on competition. Iglehart, J o h n K. New England journal of medicine, v. 3 0 5 , no. 5 , July 3 0 , 1981: 291-296. Milbank Memorial Fund quarterly. Health and society. Special i s s u e o n competition and regulation in health c a r e markets. v. 5 9 , no. 2 , Spring 1981: 1-297. Mr. Gephardt's bill. American medical news, Apr. 2 4 , 1981: 4. !;ational health insurance: what n o w , what l a t e r , what never? P a U l Y , Mark V., ed. Washington, American Enterprise Institute for Public Policy Research, 1980. 3 8 1 p. -- S. 1 3 9 T h e Comprehensive Health Care Reform Act. In remarks Congressional record [daily ed.] v. 1 2 7 , o f Orrin G. Hatch. Jan. 1 5 , 1981: S179-S182. -- Health Incentives Reform Act of 1981. In remarks o f S. 4 3 3 David Durenberger. Congressional record [ d a i l y ed.] v. 1 2 7 , Feb. 5 , 1991: ,51096-S1098. U.S. ----U.S. Congressional Budget Office. Tax subsidies f o r medical care: current policies and possible alternatives. Washington, U.S. Govt. Print. Off., Jan. 1980. 6 2 p. Containing medical care costs through market forces. 6 7 p; W a s h i n g t o n , U.S. Govt. Print. Off., May 1982. Dept. of Health and Human Services. National Center f o r Health Services Research. An annotated bibliography of research o n competition in the financing a n d delivery of health services. October 1982. 1 0 4 p. - - - - - A 3 y n c h e s i s 35 r e s e a r c h o n c o x p e t l c i o n ~n = h e f i n a n c ~ n g a n d d e l i v e r y of health services. October 1982. 86 p. ----- R e s e a r c h on c o n p e t l t i o n i n t h e f i n a n c i n g a n d d e l i v e r y a summary o f p o l i c y i s s u e s . October of health services: 1982. 2 3 p. ----- R e s e a r c h on c o m p e t i t i o n i n t h e f i n a n c i n g a n d d e l i v e r y o f health services: future research needs. October 1982. 85 p. U.S. General Accounting Office. A primer on c o m p e t i t i v e strategies for containing health care costs. Washington 47 p. ( D o c u m e n t No. H R D - 8 2 - 9 2 , S e p t . 2 4 , 1932). U.S. Library of Congress. Congressional Research Service. Health care expenditures and prices [by] Richard Price a n d Z a n e t P e r n i c e Lundy. [Washington] 1977. (Issue b r i e f 77066) Regularly updated. ----- Health insurance: The m e d i c a r e v o u c h e r p r o p o s a l s [ b y ] Glenn Markus. [Washin.gton] 1 9 8 1 . ( I s s u e b r i e f 81179) Regularly updated