Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, March 6, 1995 TAG: 9503080029
SECTION: NATIONAL/INTERNATIONAL PAGE: A-3 EDITION: METRO
SOURCE: The Washington Post
DATELINE: WASHINGTON LENGTH: Medium
The reforms proposed by congressional Republicans would make it harder for insurance companies to reject applicants and refuse to renew or exclude diseases from coverage.
But the study by George Washington University's Intergovernmental Health Policy Project found the insurance-sales practices that Republican reforms address are not the important impediments to the 38 million people who do not have health insurance.
``The main reason people don't have insurance is that they or their employers don't have enough money to buy it,'' said Kala Ladenheim, one of the principal authors of the study.
The finding is consistent with Congressional Budget Office studies of insurance-reform bills proposed last year by Republicans and Democrats. The agency found then that the only market-reform bills that would make a substantial difference in increasing health coverage were those that also provided hundreds of billions of dollars in federal premium subsidies over the next decade to help people pay for it.
The central features of GOP proposals for health-insurance reform this year again focus on reform of the rules for marketing insurance to businesses with 50 or fewer workers, where the percentage of workers covered is much lower than in large businesses. But neither of the two key bills contains any federal subsidies.
The bills and other proposals:
Prohibit insurance companies from rejecting employers that look like bad risks. They must sell policies to any business that applies.
Require insurance companies to guarantee policy renewal.
Limit, without totally prohibiting, exclusion of coverage for pre-existing conditions.
Narrow, without abolishing, variations in premiums charged different buyers for the same policy.
``Since 1990, 45 states have enacted `small group marketing reforms,' laws designed to improve the availability of insurance coverage for employees of small firms,'' the study said.
The study looked at 12 states that had some or all of these rules in place long enough to allow a preliminary evaluation of results. Based on the information available to state insurance departments, the study concluded that the reforms so far had not increased or decreased coverage much. An earlier study looked at other states that also had adopted some form of community rating in which everybody is charged the same premium or rate variations are limited very closely. It concluded that, where results could be seen, they were mixed: Coverage went up in some states, didn't change or even dropped a bit in others.
The George Washington University study, prepared for the nonprofit Commonwealth Fund, concluded: ``While small group market reforms may appear to stabilize the rates'' in a particular market, ``they are unlikely to solve the problems of affordability and availability of insurance.''
Alan Mertz, the chief of staff for bill sponsor Rep. Harris Fawell, R-Ill., said, ``We think our bill will improve coverage. It is not analogous to the state programs. Some states require insurers to offer Cadillac coverage. That makes it hard for people to afford it. We're much more flexible. We allow insurers to tailor affordable plans. We've never claimed 100 percent coverage.''
by CNB