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NEW STUDY SHOWS 'PLAY OR PAY' WOULD NOT IMPROVE HEALTH CARE

 NEW STUDY SHOWS 'PLAY OR PAY' WOULD NOT IMPROVE HEALTH CARE
 WASHINGTON, Jan. 9 /PRNewswire/ -- A new Urban Institute study shows that the "play or pay" reform proposal under consideration in Congress would raise taxes, threaten jobs and cause millions of Americans to lose their private insurance coverage, according to members of the Healthcare Equity Action League (HEAL).
 The study, conducted for the Departments of Labor and Health and Human Services and released today by Secretaries Lynn Martin and Louis Sullivan, estimates that the "play or pay" system would cost taxpayers more than $36 billion a year and businesses an additional $30 billion annually.
 "Small business provides half of the nation's private jobs," said Carolyn Kane, legislative representative for the National Association of Independent Business, a HEAL member. "Eliminating jobs won't get more people covered.
 "Many small businesses are already operating on the edge. Saddling them with a 71 percent increase in health care costs would force many of them to lay off workers or go out of business," said Kane.
 The Urban Institute study shows that the economic impact of "play or pay" is even more far-reaching than originally thought, according to Dirk Van Dongen, president of the National Association of Wholesaler-Distributors and a member of HEAL.
 Noting that the study estimates that "play or pay" would cost the American taxpayers $36 billion a year more than the government is already paying for health care, Van Dongen said: "This will explode federal spending. And we know where increased federal spending leads -- higher taxes, more bureaucracy and less service."
 An even greater concern, according to HEAL members, is that the quality of care would diminish under "play or pay."
 "This study unmasks 'play or pay' for what it really is -- a giant step toward socialized medicine," Kane said.
 Under "play or pay," employers could provide insurance or pay a payroll tax to enroll their employees in the federal health care program. The Urban Institute study predicts that many businesses that now provide insurance would find it less expensive to pay the tax and move their workers into the public plan.
 As a result, according to the study, the public plan would include 111.9 million people, or 52 percent of the population under the age of 65.
 "'Play or pay' would throw millions of people out of good coverage and into a state-run welfare type of program," Kane said.
 "'Play or pay' will lead to a loss of choice and health care rationing. Decisions about medical care will be made by federal bureaucrats, not by patients and their physicians," Kane said.
 Instead of "play or pay," HEAL proposes reform of the existing system to help get people covered, keep people covered and contain health care costs.
 Its members have recommended a seven-step program that includes changing state insurance laws to help reduce premiums, prohibiting the denial of claims for pre-existing conditions once an individual has been covered or when an employee changes jobs, reforming medical malpractice laws, allowing employers to deduct 100 percent of their health insurance premiums and encouraging methods of reducing health care costs.
 "The main obstacle for employers who want to provide health care benefits is cost," said Mark Gorman, senior director of government affairs of the National Restaurant Association.
 "If an employer can't afford it today, a mandate from Washington won't make it affordable tomorrow either. Solving the cost problem is the only way to get at the access problem. That's what HEAL is all about," Gorman said.
 HEAL is a coalition of more than 360 large and small businesses, corporations, associations, health care providers and insurers representing 1 million employers and 35 million employees.
 -0- 1/9/92
 /CONTACT: Jane Robbins, 202-833-4822, or Larry Shainman, 202-833-4293, for Healthcare Equity Action League/ CO: Healthcare Equity Action League ST: District of Columbia IN: HEA SU:


MH -- DC043 -- 8342 01/09/92 15:28 EST
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Date:Jan 9, 1992
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