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Industry Reports Healthcare Costs Will Skyrocket

Questions about the cost and quality of HMO insurance came up today on two fronts in the battle over patients’ rights. They involve President Bush's latest decision on Medicaid and a new healthcare industry report predicting soaring premiums. John Roberts reports.

A dire forecast on the cost of managed care was issued today--with Congress prepared to wrestle with the final version of a patients’ bill of rights when they return from the summer recess. According to the report, things are bad and certain to get worse. The only variable: How much worse?

The survey, conducted by an industry publication, predicts a dramatic rise in HMO premiums next year--an average of 15% across the country. In some regions, the forecast is even more dire:


  • Colorado--increases of 20%.
  • New Jersey--increases of 25%.
  • Miami--increases of as much as 45%.

The industry blamed prescription drug costs, higher payments to doctors, and litigation for the increases. Then it warned consumers that if Congress passes the Senate version of the Patients' Bill of Rights--with its generous provisions to sue for damages--already sky-high premiums could go into orbit.

Karen Ignani of the American Association of Health Plans says, "If you're a working family worried about paying the high cost of healthcare, you're going to be left holding the bag because you're going to finance the profligate ways of trial lawyers."

The report adds fire to lobbying efforts to approve the House version of the bill with its lower damage awards and expected smaller impact on premiums. But one of the sponsors of the Senate measure today argued the difference in cost would be negligible.

Senator John Edwards (Democrat, North Carolina) says, "This is just a public relations campaign and an effort for the managed care companies, big HMOs, to avoid responsibility, and they want to have an excuse for charging Americans more."

President Bush, who sides with HMOs in support of the House bill, will tomorrow seek to ease another burden on managed care. He will propose changes in a Clinton-era rule that would provide national safeguards for the millions of Medicaid patients in HMOs.

The president would turn responsibility for those safeguards over to individual states--a move patients' rights advocates say will create a diluted patchwork of protections.

Joan Alker of Familes USA says, "We believe that it is very important for these basic federal protections to be enacted so that no matter where you live any family or disabled person who is on Medicaid will have some very basic consumer protections."

The White House said today the president is simply trying to find the most efficient safeguards to hold down upward pressure on premiums. But with health costs, managed care, and government mandates all on a collision course there may be little anyone can do to keep the lid on.
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