As Congress returns to work this week, new federal managed-care regulation is taking center stage, with the battle focused on whether regulating HMOs will increase insurance costs and cause employers to drop health coverage.
In an effort to shape early public opinion, a coalition of business and managed-care groups called the Health Benefits Coalition said last week it will spend more than $1 million over the next several months attacking managed-care regulation proposals (See related story, p. 38).
Coalition members, many of whom were instrumental in defeating the Clinton national healthcare reform plan in 1994, said they were willing to spend more to defeat the plans if necessary.
The groups, which include the National Federation of Independent Business, the National Association of Manufacturers, the American Association of Health Plans and the Blue Cross and Blue Shield Association, say such regulation would increase the cost of the average HMO premium by as much as 20%.
That estimate was challenged by Rep. Greg Ganske (R-Iowa), a co-sponsor of the leading managed-care regulation bill in the House (See bottom chart).
"For the majority of items in the bill, there would be a minimal cost increase," Ganske said. "(The Health Benefits Coalition) is trying to paint a (picture of a) big bogeyman, but the cost would actually be minimal."
The issue of cost is crucial to the fight over the legislation, according to two opinion polls released last week. They show that while the public would support greater federal regulatory oversight of the managed-care industry, that support would wane if such scrutiny would prompt employers to drop coverage or would increase consumer insurance costs (See top chart).
Those findings suggest that if employers and managed-care plans can persuade consumers that the issue is one of cost and insurance coverage, they can defeat any managed-care regulation bill, said Drew Altman, president of the Henry J. Kaiser Family Foundation, which sponsored one of the polls.
"If this debate is framed as consumer protection . . . it has a chance," Altman said. "But if it is framed as government regulation that could cause the loss of jobs, it is in real trouble."
Several studies have tried to estimate the cost of managed-care regulation, but all were paid funded by an interested party. The most often cited projections, done for the Health Benefits Coalition by the actuarial firm of Milliman & Robertson, gave a range of cost estimates for most of the provisions. The estimates went from no effect on premiums to a several percentage point increase for each provision with a total impact of between 7% and nearly 40%.
Ganske dismissed the Milliman study because the firm's clients are managed-care companies.
The groups opposed to the regulation bill have allies among GOP leaders. House Majority Leader Richard Armey (R-Texas) likened the plans to the Clinton healthcare reform bill in a letter to House Republicans. But GOP leaders are in a difficult situation because the major managed-care regulation bills are sponsored by Republicans.
To formulate strategy, the House Republican leadership will appoint a task force headed by Rep. J. Dennis Hastert (R-Ill.), GOP chief deputy whip who chaired a 1995 task force on Medicare reform.
Rep. William Thomas (R-Calif.), chairman of the House Ways and Means health subcommittee, told a group of healthcare lobbyists last week the Republican leadership would have its own managed-care regulation proposal. He did not give details.
Several bills regulating managed-care plans have already been introduced in Congress. Most would require plans to provide information, allow independent appeals and give patients the right to see certain specialists without a referral. President Clinton's healthcare quality commission has released a "Patient Bill of Rights," which Democratic legislators have vowed to introduce as legislation in the near future.