


                THE HEALTH SECURITY ACT OF 1993
                Health Care That's Always There

Every American citizen will receive a Health Security 
Card that guarantees you a comprehensive package of 
benefits that can never be taken away.

Guaranteeing comprehensive benefits that can never be 
taken away. Controlling health care costs for 
consumers, business and our nation. Improving the 
quality of American health care. Increasing choices 
for consumers. Reducing paperwork and simplifying the 
system. Making everyone responsible for health care. 
These are the principles of the Health Security Act of 
1993 and they are  not negotiable. 

In America, rights and responsibilities go 
hand-in-hand. We will ask everybody to pay something, 
even if your contribution is small. Everyone must 
assume responsibility. No one should get a free ride. 

Most important, we're going to offer new opportunities 
and new incentives for people to stay healthy -- and 
to treat small problems before they become big ones. 
Our goal should be to keep people healthy, not treat 
them after they become sick. 

     What's Wrong With the Current System

The things that are wrong with our health care system 
are threatening everything that's right with American 
health care.

*    Over the next two years, one out of four of us 
will be without health coverage at some point. Change 
jobs, lose your job, or move -- and your insurance 
company is currently allowed to drop you.

*    Today's system is rigged against families and 
small businesses. Insurance companies pick and choose 
whom they cover.  Then they drop you when you get 
sick. If you have a pre-existing condition, you 
usually can't get any insurance at all.

*    Insurance companies charge small businesses as 
much as 35% more than the big guys. 
*    Only 3 of every 10 employers with fewer than 500 
employees offer any choice of health plan. Millions of 
Americans have almost no choice today. 
*    Twenty-five cents out of every dollar on a 
hospital bill goes to bureaucracy and paperwork -- not 
patient care. 

*    Fraud and abuse are exploding, costing us at 
least $80 billion a year. That's a dime of every 
dollar we spend on health care.

*    Our nation's health costs have nearly quadrupled 
since 1980. Without reform, by the year 2000, one of 
every five dollars we spend will go to health care.

     The Health Security Plan

Every American citizen and legal resident will receive 
a Health Security Card.  Once you get your card, you 
can never lose your health coverage -- no matter what. 
If you get sick, you're covered. If you change jobs, 
you're covered. If you lose your job, you're covered. 
If you move, you're covered. If you have the courage 
to start a small business, you're covered. 
 
Your Health Security card guarantees you a 
comprehensive package of benefits that can never be 
taken away.  The package is as comprehensive as the 
ones that many Fortune 500 companies offer their 
employees. And in critical ways -- like paying for  
preventive care and prescription drugs -- the package 
gives you more than big companies provide today. 
 
You will be able to choose your doctor. Everyone will 
have a choice of health plans.  You'll be able to 
follow your doctors and nurses into a traditional 
fee-for-service plan, join a network of doctors and 
hospitals, or join an HMO.  Your boss or insurance 
company won't decide how or where or from whom you get 
your care -- you will.     

Almost everybody will be able to sign up for a health 
plan at work, like you do today. You'll get brochures 
that give you easy-to-understand information on 
several health plans -- which doctors and hospitals 
are included, an evaluation of the quality of care, a 
consumer satisfaction survey, and prices. If you're 
self-employed or unemployed, you can sign up at your 
area health alliance, which will be run by consumers 
and businesses and bargain for affordable health care 
for you. 

The federal government will set up a national health 
board -- a board of directors to set standards and 
make sure you get the comprehensive benefits and 
quality care you deserve. State governments will set 
up health alliances give consumers and small 
businesses the power to buy affordable care; and the 
businesses with 5,000 or more employees will be 
allowed to operate as "corporate alliances." 


Insurance companies will be required to use a single 
claim form to replace the thousands of different forms 
they have today. So when you get sick, you won't be 
buried in forms -- and neither will your nurse, your 
doctor or your hospital.

*    Security for you and your family.
*    A comprehensive package of benefits.
*    Health care costs that are under control.
*    Improved quality of care.
*    Increased choices for consumers.
*    Less paperwork and a simpler system.

     That's what the Health Security Act is all about.

Principle #1:
Security: Giving you health care that's always there. 

Over the next two years, one of every four of us will 
lose health coverage for some time. The Clinton plan 
guarantees that you will never lose your insurance -- 
no matter what. Here's how the plan guarantees 
security:

*    Makes it illegal for insurance companies to deny 
you coverage because of "pre-existing conditions." The 
Health Security Act also makes it illegal for insurers 
to raise your premiums or drop you because you get 
sick. All health plans will be required to accept 
anyone who applies -- healthy or sick, young or old.

*    Guarantees coverage if you lose your job. The 
proposal guarantees that you will keep your health 
coverage even if you lose your job, with the employer 
portion picked up by Federal revenues and savings. 
Under the current system, if you lose your job, you 
lose your health insurance.

*    Guarantees coverage if you switch jobs, move or 
start a small business.  You will always be protected 
-- no matter what. Today, if you switch jobs, move or 
start a small business, you can find yourself without 
health insurance -- and risk bankruptcy. 

*    Provides coverage for early retirees. The health 
security plan guarantees coverage for early retirees, 
so they don't have to worry about being without 
coverage after they retire and before they are covered 
by Medicare. Today many early retirees are losing 
their health benefits. 
 
Principle #2:
Comprehensive benefits: Keeping you healthy.

All Americans will receive a Health Security card that 
guarantees you a benefits package that is as 
comprehensive as those offered by most Fortune 500 
companies...and then some. 

Emphasizes preventive care. The comprehensive benefits 
package goes beyond virtually all current insurance 
plans by covering a wide range of preventive services, 
including mammograms, Pap smears, and immunizations, 
at no charge to you. It puts a new emphasis on helping 
you stay healthy, rather than waiting until they get 
sick. Prevention saves money and improves people's 
health.

Includes prescription drugs.  Many insurance companies 
and Medicare have failed to cover prescription drugs. 
But drug costs are breaking family budgets, forcing 
many older Americans to choose between food and 
medicine. Health insurance should cover prescription 
drugs. The Health Security plan does. 

All Americans will be guaranteed coverage of :
*    Preventive Care ( i.e., screenings, physicals, 
     mmunizations, mammograms, prenatal Care; at no cost)
*    Doctor Visits
*    Prescription Drugs
*    Hospital Services
*    Emergency/Ambulance Services
*    Laboratory and Diagnostic Services
*    Mental Health and Substance Abuse Treatment
*    Expanded Home Health Care
*    Hospice Care/Outpatient Rehabilitation 
*    Vision and Hearing Care
*    Children's Preventive Dental Care

Principle #3: 
Savings: Controlling health care costs.

Here's how the Health Security Act will control health 
care costs:
 
Limits how much insurance companies can raise your 
premium. Insurance companies will no longer be able to 
raise your premiums as they please.  Today, insurance 
companies hike your premiums -- sometimes at several 
times the rate of inflation -- if you get sick, if 
someone in your family gets sick, and for any other 
reason. 
 
Introduces competition to the health care marketplace. 

The Health Security plan will release the chokehold 
that in today's system, insurance companies have on 
all of us -- consumers, nurses, doctors, and 
businesses. Reform will encourage competition -- 
forcing costs down as health plans compete by offering 
high-quality care at an affordable price. 

Cracks down on fraud. The health security proposal 
makes health-care fraud a crime and imposes stiff 
penalties on those who cheat the system. It prohibits 
doctors from referring patients to outside facilities, 
like labs, which they own a piece of. It stops the 
kickbacks that some laboratories give doctors in an 
effort to get their business. 

Asks the drug companies to hold down prescription drug 
prices. The Health Security plan asks drug companies 
to take responsibility for keeping prices down, 
without setting prices. In today's system, 
overcharging runs rampant --certain prescription drugs 
cost Americans three times more than people pay in 
other industrialized countries. 

Reduces paperwork. All health plans will adopt a 
single, standard claims form by Jan. 1, 1995. Along 
with other measures to streamline the system and free 
nurses and doctors from excess bureaucracy, this will 
reduce paperwork, cut red tape, and save money.  

Squeezes the waste out of Medicare and Medicaid. By 
slowing the growth of these government programs, the 
proposal uses funds that have been wasted on excessive 
charges and funnels them into comprehensive benefits. 
Under reform, Medicare will be expanded to cover 
prescription drugs, and there will be a new long-term 
care program to help cover home- and community-based 
care. Today, Medicare and Medicaid spending keeps 
going up and up. But the elderly and poor aren't 
getting any extra benefits. Health security will 
change that.

Principle #4:
Quality: Making the world's best care better. 

Emphasizes preventive care. The Health Security plan 
puts a new emphasis on preventing illness before it 
becomes a medical crisis. Prevention will improve the 
quality of care by helping people stay healthy rather 
than treating them after they get sick. The benefits 
package fully pays for a wide range of preventive 
services; the vast majority of today's insurance plans 
don't cover a penny.
Gives consumers the power to judge the quality of 
care. Consumers will receive quality "report cards" 
that provide information on the performance of health 
care plans and patient satisfaction. These report 
cards will hold health plans accountable for meeting 
high standards. The National Quality Program will help 
states share information on health plan performance.

Reforms malpractice.  The President's proposal will 
limit lawyers' fees in order to discourage frivolous 
medical malpractice lawsuits. It will also encourage 
patients and doctors to use alternative forms of 
dispute resolution before they end up in court.  This 
will help eliminate the "defensive medicine" that 
drives up costs and hurts quality -- doctors ordering 
extra tests because they fear lawyers looking over 
their shoulders.

Encourages cooperation in rural and urban areas.  
Rural residents will have access to the latest 
technology and emergency services through 
telecommunications links set up between local doctors 
and advanced networks of specialists and hospitals. In 
urban areas, the plan will increase investment in 
public hospitals and community health centers.

Provides incentives for more family doctors to 
practice in rural and urban areas.  The health 
security plan will give financial breaks to doctors 
and nurses who work in underserved rural and urban 
areas. It will expand the National Health Service 
Corps. Two of three rural counties today do not have 
enough doctors and 111 rural counties have no 
physician at all.

Increases funding for prevention research. The 
National Institutes of Health (NIH) will expand 
research in areas like children's health, and health 
and wellness promotion. Preventive care keeps people 
healthier and saves money at the same time.

Promotes research on the effectiveness of treatments. 
Today, a lack of information about the most 
cost-effective methods of treatment often leads to 
expensive defensive medicine and wide variation in 
treatments and costs. The plan's investments in 
research into what treatments really work will help 
improve the quality of care.

Principle #5:
Choice: Preserving and increasing what you have today.

Preserves your right to choose your doctor. The 
proposal ensures that you can follow your doctor and 
his or her team to any plan they might join.  Today, 
more and more employers are forcing their employees 
into plans that restrict your choice of doctor. After 
reform, your boss or insurance company won't choose 
your doctor or health plan -- you will.
 
Increases your choice of health plan. You will be able 
to choose from among all the health plans offered in 
your area -- no matter where you work. Only one of 
every three companies with fewer than 500 employees 
offer any choice of health plan. After reform, every 
employee will be able to choose a health plan. 

Puts consumers in the driver's seat. The Health 
Security Act brings competition to health care -- 
unleashing the market forces that will lower costs and 
improve quality. Giving small businesses and consumers 
the power to band together in alliances will level the 
playing field and give them the same bargaining 
strength as big businesses. 

Increases options for long-term care.  The President's 
proposal will make it possible for more Americans to 
continue to live in their homes and communities while 
receiving care. Today too many families are split 
apart when insurance or federal programs only pay for 
hospital coverage. The plan will help put an end to 
this situation and give families the options they 
deserve.

Principle #6:
Simplicity: Reducing paperwork and cutting red tape. 

Gives everyone a Health Security Card. The card -- 
with full protection for privacy and confidentiality 
-- will allow for electronic billing and the creation 
of health care information networks. This will reduce 
paperwork and simplify the system. 

Requires insurance companies to use a single claim 
form. The Health Security Act will reduce the 
insurance company red tape that forces doctors and 
patients to spend their time filling out forms and 
fighting bureaucrats. All health plans will adopt a 
single, standard claims form by Jan. 1, 1995. It will 
enable doctors and nurses to spend more time taking 
care of you -- and less time wrestling with paper.

Eliminates fine print. Everyone will get a 
comprehensive benefits package -- and what you get 
will be spelled out in easy-to understand language. If 
you get sick, insurance companies won't be able to 
point to fine print and deny you the coverage you've 
paid for. 
Streamlines billing reimbursement for doctors, nurses 
and hospitals. The comprehensive benefits package, a 
standard rules and codes for payment, and elimination 
of excessive government regulations will reduce 
confusion. Doctors, nurses, and hospitals will have 
more time to care for patients; and all of us will 
benefit. 


Removes the burden on business of negotiating 
insurance. Groups of businesses and consumers -- 
regional health alliances -- will negotiate for 
high-quality care at affordable prices. This will 
simplify today's system, where hundreds of thousands 
of businesses negotiate with more than 1500 insurance 
companies. The burden of finding insurance will be 
lifted -- and so will administrative costs -- which 
can run as high as 40% of total health costs for small 
business. 


     HOW THE SYSTEM IS FINANCED

The financing proposal was developed under the most 
rigorous and conservative forecasting standards. For 
the first time, representatives from every federal 
agency involved in fiscal accounting and financial 
projections have been brought together to work out the 
numbers. Then teams of actuaries, health economists 
and other financial analysts from outside the 
government served as auditors and consultants, 
checking and rechecking. 

The system is financed from five major sources:

1) Employer and employee contributions -- Everyone 
will pay a portion of health insurance premiums, even 
if your contribution is small, because everyone must 
assume responsibility.  Today, the overwhelming 
majority of employers cover their employees, and 
they'll continue to do so. But the businesses that 
provide insurance are paying for those who don't. No 
one should get a free ride.

2)  Medicare and Medicaid savings --  Specific savings 
can be achieved by slowing the rate of growth of these 
programs. Every penny of these savings will be 
channeled back into benefits -- prescription drugs and 
long-term care -- for the people which these programs 
serve.

3) "Uncompensated care." -- Savings can be achieved 
from money now paid to hospitals and doctors who care 
for people who can't afford care but receive it anyway 
and the uninsured. 

4) Sin taxes and other federal revenues -- There will 
be some new "sin taxes," and other revenues will be 
added as health care costs slow, less money is spent, 
and the difference is no longer tax-deductible.  
 
5) Other savings -- Reducing paperwork and 
administration -- estimated to cost $100 billion or 
more a year -- will cut bureaucracy and save money. 
Cracking down on health care fraud -- estimated to be 
at least $80 billion annually -- and imposing new 
stiff penalties will also yield savings.

     
PAYMENT SCENARIOS

     As a rule, most individuals and families in which 
at least one person works will pay a maximum of 20% of 
the average health plan premium in their area. Those 
who choose a lower cost plan -- from among those 
offered in the area -- will pay a little less than the 
20% average. Those who choose a more expensive plan 
will pay a little more, as they do today.Employers who 
currently pay 100% of health benefits may continue to 
do so.

     Two parent family with children: Two parent 
families with children -- whether one or     both 
parents work -- pay a maximum of 20% of the family 
premium offered by the    average plan in their area. 
If both parents work, they choose how to pay their 
family's share. They can have the share deducted 
monthly out of either paycheck or write a check to the 
local alliance. 

     Couple: Working married couples -- whether one or 
both spouses work -- pay a    maximum of 20 percent of 
the average plan premium. They can have the share  
deducted monthly from either paycheck or write a check 
to the local alliance.
     
     Single-parent family: Working single parents with 
children pay a maximum of 20 %
     of the average plan premium for a single parent 
policy.
     
     Individual: Working single people pay a maximum 
of 20% of the average premium for an individual policy 
in their area.

     Part-time worker with no unearned income: 
Part-time workers pay a maximum of 20%  of the average 
plan premium for their policy type in their area. 
     
EXCEPTIONS 

     Exceptions are provided for: (1) the 
self-employed and independent contractors; (2) 
part-time workers who have unearned income; (3) 
families with incomes below 150% of the poverty level; 
and (4) seasonal workers.

     Self-employed/independent contractors:  The 
self-employed and individual contractors can deduct from their
taxes 100%  of their health care costs. As with any small
business, they pay the employer share. They also pay an
individual share. If a firm earns less than $24,000 a year, 
it is eligible for subsidies.

     Part-time workers with unearned income: Part-time 
workers with unearned income pay a maximum of 20% of 
the average plan premium for their policy type -- 
individual, couple, two parent, or single parent 
family.  The number of hours someone works determines 
how much of the premium is paid by the employer and 
how much by the individual. For example, an employer 
would pay 40% of the premium for someone who works 
half-time. Payment of the remaining 40% of the premium 
depends on how much a person makes in unearned income, 
with subsidies provided on a sliding scale for those 
whose incomes are below 250% of the poverty level.

     Families with incomes below 150% of the poverty 
level: Families at this level are eligible for 
discounted premiums and pay a maximum of 20% of the 
employee's share    of the average plan premium. This 
applies to individuals making $10,455 annually; 
couples with incomes of $14,145; families of three 
earning $17,835; and families of four with incomes of 
$21,525.

     Seasonal workers: Seasonal workers pay a maximum 
of 20% of the average plan premium in the area where 
they reside.. Those whose incomes are 150% of the  
poverty level or below are eligible for discounted 
premiums. If they have unearned income and are not 
working, seasonal workers are treated the same as 
part-time workers.

     Unemployed and non-working:  Unemployed 
individuals and heads of household who make less than 
150% of the poverty level are eligible for individual 
subsidies on a sliding scale. Those with unearned 
income pay all or part of what would normally be the 
employer's share of the premium.
     
     Those whose incomes are 250% of the poverty level 
or less -- pensioners, for example -- are eligible for 
discounts on what would be the employer's share. They 
are not eligible for individual subsidies, and pay the 
normal individual share of the health premium.



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