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CONGRESSIONAL HEALTH REFORM DEBATE WILL START IN LATE JANUARY

This article was originally published in The Gray Sheet

Executive Summary

CONGRESSIONAL HEALTH REFORM DEBATE WILL START IN LATE JANUARY with hearings by the House Ways and Means health subcommittee on legislation introduced Jan. 5 by Subcommittee Chairman Pete Stark (D-Calif.). The bill, HR 200, is "90%" the same as last session's HR 5502, introduced in June by Stark and House Majority Leader Richard Gephardt (D-Mo.), with provisions added to build a framework for "managed competition" in the health care system, Stark staffers say. The introduction of HR 200 does not indicate that Stark has changed his previously stated intention to support President-elect Clinton's upcoming health care reform plan, staffers said. Rather, Stark's intention is to build consensus in areas such as administrative simplification, fraud and abuse detection and enforcement, insurance reforms and the establishment of a standard benefit package. Those provisions are included in many health care reform plans and are likely to be a part of the Clinton package. Like last year's Stark/Gephardt bill, HR 200 would phase in a national health budget that would eventually hold growth in health spending to that of the nominal gross domestic product. States would set provider payment rates using approaches such as hospital diagnosis-related groups, but staff and group model health maintenance organizations would be exempted from the state-set rates. HR 200 would provide grants to states totaling $150 mil. to establish health plan purchasing cooperatives, one of the cornerstones of the managed competition approach. As in other managed competition bills, HPPCs under the Stark bill would gather large groups of individuals -- primarily the self-employed and small businesses -- to achieve economies of scale in contracting with health plans. HR 200's managed competition provisions would be less regulatory than those in many other bills, making enrollment in HPPCs voluntary and not limiting the tax deductibility of health insurance premiums to those for programs handled by the HPPCs. The bill also contains a number of insurance reforms, such as restrictions on excluding pre-existing conditions from coverage.
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