                         THE NEED FOR REFORM
 
      The United States is a world leader in developing new medical 
 technologies and probing the mysteries of disease through basic and 
 clinical research.  People from all over the world come to the United 
 States for specialized training and treatment.
 
      ...As we undertake this journey of change, we clearly must 
      preserve what's right with our health care system -- the close 
      patient-doctor relationship, the best doctors and nurses, the 
      best academic research, the best advanced technology in the 
      world.
                     --President Clinton, September 20th, 1993
 
      But the health care system, as a whole, is in deep crisis.  
 Health care spending now consumes 14% of GDP, up from 9.1% in 1980.  
 If nothing is done, by the year 2000, nearly 19% of America's GDP will 
 go towards health care alone.
 
      Some say that is acceptable, because that's what it costs to keep 
 our population healthy.  But this means accepting that rising health 
 care costs should consume over 100% of the projected increase in 
 wages, produce 60% of the projected growth in the federal budget, and 
 eat away two-thirds of our projected economic growth for the rest of 
 the decade.
 
      But in fact, we would be spending that money without getting the 
 security, simplicity, and value that would help bring health and 
 expanded opportunity to all Americans.
 
      Because we cannot control health care costs and become further 
      and further behind in our efforts to do so, we find our economy, 
      and particularly the federal budget, under increasing pressure.  
      Just as it would be irresponsible, therefore, to change what is 
      working in the health care system, it is equally irresponsible 
      for us not to fix what we know is no longer working.
 
                     --Hillary Rodham Clinton, June 13, 1993
 
 
 
      ...The ethical imperative is perhaps the most important thing.  
      We have to decide that the costs, not just the financial costs, 
      but the human costs, the social costs of all of us continuing to 
      conduct ourselves within the framework in which we are now 
      operating is far higher than risk of responsible change.
 
                     --President Clinton, September 20th, 1993
 
 
      In short, today's American health care system falls short of 
 providing high quality care and choices for all Americans.
 
      Some things, like universal access, are not negotiable.  And 
      that's exactly the way it should be.
 
                          --C. Everett Koop, 20 September 1993
 
 
 
 A LACK OF SECURITY
 
 
      *  Every month, 2 million Americans lose their insurance.  One 
         out of four -- 63 million -- Americans will lose their health 
         insurance coverage for some period during the next two years.
 
      *  37 million Americans have no insurance and another 22 
         million have inadequate coverage.
 
      *  Losing or changing a job often means losing insurance.  
         Becoming ill or living with a chronic medical condition can 
         mean losing insurance coverage or not being able to obtain it.
 
      *  Long-term care coverage is inadequate.  Many elderly and 
         disabled Americans enter nursing homes and other institutions 
         when they would prefer to remain at home.  Families exhaust 
         their savings trying to provide for disabled relatives.
 
      *  Many Americans in inner cities and rural areas do not have 
         access to quality care, due to poor distribution of doctors, 
         nurses, hospitals, clinics and support services.  
 
      *  Public health services are not well integrated and 
         coordinated with the personal care delivery system.  Many 
         serious health problems -- such as lead poisoning and drug-
         resistant tuberculosis -- are handled inefficiently or not at 
         all, and thus potentially threaten the health of the entire 
         population.
 
 
 
 
 RISING COSTS
 
      *  Rising health costs mean lower wages, higher prices for 
         goods and services, and higher taxes.  The average worker today 
         would be earning at least $1,000 more a year if health 
         insurance costs had not risen faster than wages over the 
         previous 15 years.
 
      *  If the cost of health care continues at the current pace, 
         wages will be held down by an additional $650 by the year 2000.  
         (OMB)
 
      *  More and more Americans have had to give up insurance 
         altogether because the premiums have become prohibitively 
         expensive.
 
      *  Many small firms either cannot afford insurance at all in 
         the current system, or have had to cut benefits or profits in 
         order to provide insurance to their employees.
 
      *  Only one other industrialized country (Canada) spends more 
         than 10% of their GDP on health care.  Japan, France and 
         Germany spend 9% of GDP or less, and their costs have not risen 
         nearly as rapidly as ours.
 
 QUALITY THREATENED
 
      *  No one is accountable for the performance of the health 
         care system -- not hospitals, physicians, other providers, or 
         health insurers.
 
      *  Quality care means promoting good health.  Yet, our system 
         waits until people are sick before it starts to work.  It is 
         biased towards specialty care and gives inadequate attention to 
         cost-effective primary and preventive care.
 
      *  Consumers cannot compare doctors and hospitals because 
         reliable quality information is not available to them.
 
      *  Health care providers often don't have enough information 
         on which treatments work best and are most cost-effective. 
 
      *  Health care treatment patterns vary widely without 
         detectable effects on health status.
 
      *  Some insurers now compete to insure the healthy and avoid 
         the sick by determining "insurability profiles".  They should 
         compete on quality, value, and service.
 
      *  The average doctor's office spends 80 hours a month pushing 
         paper.  Nurses often have to fill out as many as 19 forms to 
         account for one person's hospital stay.  This is time that 
         could be better spent caring for patients.
 
      *  Insurance company red tape has created a nightmare for 
         providers -- with mountains of forms and numerous levels of 
         review that wastes money and does nothing to improve the 
         quality of care.
 
      *  We have the best doctors who can provide the most advanced 
         treatments in the world.  Yet people often can't get treated 
         when they need care.
 
      *  Our medical malpractice system does little to promote 
         quality.  Fear of litigation forces providers to practice 
         defensive medicine -- ordering inappropriate tests and 
         procedures to protect against lawsuits.  Truly negligent 
         providers often are not disciplined, and many victims of real 
         malpractice are not compensated for their injuries.
 
 
 GROWING COMPLEXITY
 
      *  Purchasing insurance can be overwhelming for consumers.  
         With different levels of benefits, co-payments, deductibles and 
         a variety of limitations, trying to compare policies is 
         confusing and objective information on quality and service is 
         hard for consumers to find.  As a result, consumers are 
         vulnerable to unfair and abusive practices.
 
      *  Insurers have responded to rising health costs by imposing 
         restriction on what doctors and hospitals do.  A system that 
         was complicated to begin with has become incomprehensible, even 
         to experts.  Each health insurance plan includes different 
         exclusions and limitations.  Even the terms used in health 
         policies do not have standard definitions.  
 
      *  Small business owners -- who cannot afford big benefits 
         departments -- have to spend time and money working through the 
         insurance maze.  For firms with fewer than five workers, 40 
         percent of health care premiums go to pay administrative 
         expenses.  
 
      *  Administrative costs add to the cost of each hospital stay 
         with the number of health care administrators increasing four 
         times faster than the number of doctors.
 
      *  Health claim forms and the related paperwork are confusing 
         for consumers, and time-consuming to fill out.
 
 
 DECLINING CHOICES
 
      *  Insurance coverage for most Americans is not a matter of 
         choice at all. In most cases, they are limited to whatever 
         policy their employer offers.  Only 29% of companies with fewer 
         than 500 employees offer any choice of plans.  
 
      *  With a growing number of insurers using exclusions for pre-
         existing conditions, arbitrary cancellations and hidden benefit 
         limitations, consumers have few choices for affordable policies 
         that provide real protection.
 
 






                            HEALTH SECURITY
 
 
                         PRELIMINARY PLAN SUMMARY
 
 
      The Health Security plan guarantees comprehensive health benefits 
 for all American citizens and legal residents, regardless of health or 
 employment status.  Health coverage is seamless; it continues with no 
 lifetime limits and without interruption if Americans lose or change 
 jobs, move from one area of the country to another, become ill or 
 confront a family crisis.
 
      Every American citizen will receive a Health Security Card that 
 guarantees comprehensive benefits that can never be taken away.  
 Fundamental principles underlie health care reform: 
 
      *     The guarantee of comprehensive benefits for all Americans.  
 
      *     Effective steps to control rising health care costs for 
            consumers, business and our nation.  
 
      *     Improvements in the quality of health care.  
 
      *     Increased choice for consumers.  
 
      *     Reductions in paperwork and a simplified system. 
 
      *     Making everyone responsible for health care.
 
 
      Americans and their employers are asked to take responsibility 
 for their health coverage and, in return, they are guaranteed the 
 security that they will always be covered under a comprehensive 
 benefit.
 
      The Health Security plan creates incentives for health care 
 providers to compete on the basis of quality, service and price.  It 
 unleashes the power of the market and puts American consumers in the 
 driver's seat.  Consumers choose from whom and how they get their care.
 
      The plan empowers each state to set up one or more "health 
 alliances" that contract with health plans and bargain on behalf of 
 area consumers and employers.  Health plans must meet national 
 standards for coverage, quality, and service set by the National Health 
 Board. But each state tailors its approach to local needs and 
 conditions.
 
      The Health Security plan frees the health care system of much of 
 the paperwork and regulation, allowing doctors, nurses, hospitals and 
 other health providers to focus on providing high-quality care.  It 
 cracks down on  and abuse, reforms malpractice law and policy and 
 outlaws insurance practices that hurt small businesses and imposes the 
 first national standards for the protection of patient privacy and 
 confidentiality in medical information and records.
 
 
 CREATING SECURITY
 
 
      The Health Security plan guarantees every American and legal 
 resident health coverage that can never be taken away:
 
      *     The comprehensive benefits have no lifetime limits on 
            medical coverage and provides a full range of medically 
            necessary or appropriate services.
 
      *     No health plan may deny enrollment to any applicant 
            because of health, employment or financial status, nor may 
            it charge some patients more than others because of age, 
            medical condition or other factors related to risk. 
 
      *     All health plans must meet national quality standards and 
            provide reliable information to consumers so they can 
            choose their health plans and providers. 
 
      *     Americans have a broad choice of health plans and 
            providers.
 
      *     Elderly and disabled Americans receive outpatient 
            prescription drug benefits under Medicare for the first 
            time and expanded access to home and community-based long-
            term care services.  
 
      *     Self-employed workers are able to deduct the full cost of 
            their health coverage from their federal income taxes.
 
      *     Workers older than 55 who retire before they are eligible 
            for Medicare receive comprehensive coverage for the 
            guaranteed benefit but continue to pay only the employee 
            share of the premium.  
 
      *     New investments and loans help improve the availability and 
            quality of health care in rural communities and inner-city 
            neighborhoods.  
 
      *     School-based and community clinics expand access to care in 
            areas with inadequate health services.
 
      *     Financial incentives and expansion of the National Health 
            Services Corps attract health professionals to areas with 
            shortages of doctors and nurses.  
 
 
 CONTROLLING COSTS
 
      The Health Security plan cuts the projected growth in health care 
 costs by increasing competition in health care, reducing administrative 
 costs and imposing budget discipline.  Health plans compete to provide 
 affordable, quality care:
 
      *     Uniform, comprehensive health benefits and reliable 
            information about the price and performance of health plans 
            encourage informed choices. 
 
            Consumers may choose to pay less for lower-cost 
            health plans or more for higher-cost plans, creating 
            incentives for cost-conscious decisions.
 
      *     Payments to health plans are fixed, providing incentives to 
            spend resources wisely.  Payments are adjusted based on the 
            risk characteristics of each health plan's participants.
 
 
      If savings attained through competition and reductions in 
 administrative burden fail to contain costs, limits on the rate of 
 growth of insurance premiums provide an emergency brake --  or backstop 
 -- to ensure that premiums remain in line with inflation.
 
      Health reform also reduces the projected rate of growth in 
 federal and state spending for Medicare, Medicaid, and other government 
 programs.  Resources conserved from those steps are applied to other 
 aspects of the health care system, particularly the expansion of 
 Medicare benefits to include prescription drugs and for new long-term 
 care services.
 
      The Health Security plan cracks down on providers and 
 institutions that overcharge or engage in health care fraud.  It sets 
 tough new standards and imposes stiffer penalties that include:  
 
      *     New criminal penalties for health care  and for the payment 
      *     of bribes or gratuities to influence the delivery of health 
      *     services and coverage.
 
      *     New civil financial penalties against providers who submit 
      *     false claims.
 
      *     Tighter restrictions to eliminate referral "kickbacks" in 
      *     the private sector and new standards that prohibit 
      *     physicians from sending their patients to get services at 
      *     institutions in which they have financial interests.
 
      *     Strong accountability standards that make provider  and 
      *     other misconduct automatic grounds for exclusion from all 
      *     health plans.
 
 
 EXPANDING CHOICE
 
      The Health Security plan guarantees consumers a choice of health 
 plans and enhances the patient-doctor relationship.
 
      *     Alliances offer an array of competing health plans from 
            which individuals and families choose their health 
            coverage, expanding the range of choice for many Americans.
 
      *     Alliances must offer a traditional fee-for-service 
            option in which every patient can see any physician he or 
            she chooses.
 
      *     Consumers -- rather than their employers -- choose their 
            health plan from among a menu of plans offered by 
            alliances.
 
      *     Doctors and other health care providers also have a choice 
            of health plans and delivery systems in which they may 
            choose to practice medicine.
 
      *     Separate programs increase federal support for long-
            term care and improve the quality and reliability of 
            private long-term care insurance.
 
 
 ENHANCING QUALITY
 
      The Health Security plan improves the quality of health care.  It 
 creates standards and guidelines for health professionals, reorienting 
 quality assurance programs to measuring outcomes rather than 
 regulation, increases the national commitment to medical research and 
 promotes primary and preventive care.
 
      *     Health plans are held accountable for delivering 
            appropriate, quality care.
 
      *     Regular surveys of consumer satisfaction are used to 
            measure health plans.
 
      *     Regular publication of useful and easily understood 
            information about quality and cost allows consumers to make 
            informed choices among health plans.
 
      *     A special funding mechanism strengthens the role of 
            academic health centers in research, training and 
            specialized care.
 
      *     Increased investment in research advances medical 
            knowledge.
 
      *     Changes in Medicare rate schedules and the allocation of 
            federal funds supporting graduate medical education provide 
            new incentives for physicians to choose primary care as the 
            focus of their training.
 
      *     Expanded funds for education and new federal action helps 
            remove artificial barriers to practice that hinder nurses 
            and other professionals.
 
      *     Investments in public health and medical research improve 
            health protection for all Americans.
 
 
 REDUCING BUREAUCRACY
 
      The Health Security plan reduces the burden of paperwork and 
 administration, streamlines regulatory, billing and reporting 
 requirements and helps reduce confusion. 
 
      *     A comprehensive benefits package that covers every American 
            and legal resident reduces confusion for health care 
            providers and consumers.
 
      *     Administrative costs caused by multiple insurance policies 
            with different benefits and risk selection disappear.
 
      *     Standard forms for insurance claims and billing procedures 
            simplify paperwork and reduce administrative costs.
 
      *     Administrative costs for small companies decline as those 
            firms purchase care through regional health alliances that 
            benefit from economies of scale.
 
      *     The plan simplifies federal regulatory requirements for 
            Medicare, Medicaid and programs that govern clinical 
            laboratories. 
 
      *     The plan requires that health care services covered by 
            workers' compensation and automobile insurance be delivered 
            through an individual's health plan reducing duplication 
            and waste.
 
      *     Malpractice reform reduces incentives for the practice of 
            "defensive medicine," including unnecessary tests and 
            procedures.
 
 
                           THE HEALTH SECURITY PLAN
 
 
 COVERAGE
 
      All American citizens and legal residents are guaranteed a 
 nationally defined, comprehensive package of benefits and enroll in a 
 health plan.  Coverage continues without interruption regardless of a 
 change of employer, employment status, marital status or medical 
 condition.
 
      Coverage goes into effect -- state by state -- beginning in 1995 
 and is fully implemented by 1997.
 
      The vast majority of Americans continue to receive their health 
 coverage at work, as they do today.  All workers have a choice of 
 health plans, each of which must be certified as meeting quality 
 standards.  Unlike today, however, all employers contribute to the 
 purchase of health coverage for their employees, both full and part-
 time.
 
      Employed individuals receive information about enrollment and 
 health plans either at work or directly from the alliance.  Small 
 business owners and their families, employees of small business, the 
 self-employed and the unemployed sign up for the health plan of their 
 choice through the regional alliance office in their area.
 
      Firms or Taft-Hartley Plans with more than 5000 employees may 
 fulfill their obligation to provide coverage for their employees by 
 establishing a corporate alliance or joining the regional alliances.  
 Corporate alliances must meet federal standards for benefits, choice 
 and quality.
 
      Medicare beneficiaries continue to receive all current benefits 
 and, in 1996, receive a new benefit covering outpatient prescription 
 drugs.  New long-term care programs also expand access to home and 
 community-based care.
 
      Those people who receive health care through the Department of 
 Defense, the Department of Veterans Affairs and the Indian Health 
 Service may continue to do so.
 
      Medicaid beneficiaries receive coverage through the regional 
 health alliance, choosing among the health plans it offers.   
 
 
 BENEFITS
 
      The health benefits guaranteed to all Americans contain no 
 lifetime limits on coverage, and provide a comprehensive package of 
 medical services delivered in hospitals, clinics, professional offices 
 and other sites.  One uniform, comprehensive benefit package replaces 
 hundreds of different insurance products in the market today.   
 
      When medically necessary or appropriate, covered services include 
 hospital care, emergency services, preventive care, mental health and 
 substance-abuse services, family planning, pregnancy-related care, 
 hospice care, home health and extended-care services following an acute 
 illness, ambulance services, outpatient laboratory and diagnostic 
 services, prescription drugs and biologicals, outpatient 
 rehabilitation, durable medical equipment, vision and hearing care, 
 periodic medical checkups and preventive dental services for children.
 
      The plan includes coverage for a full range of preventive 
 screening and care often not covered in traditional health insurance 
 policies.  Covered preventive care includes well-baby checkups and 
 immunizations for children, periodic physical examinations, routine 
 laboratory work and screening tests, with no charge to the patient.
 
      Additional benefits, including preventive dental care for adults 
 and a more comprehensive mental health and substance-abuse benefit, are 
 phased into the nationally guaranteed benefits by the year 2001.  
 
      Individuals or employers who wish to purchase benefits beyond the 
 nationally guaranteed package may do so. 
 
      All individuals in a health plan pay the same premium for the 
 nationally guaranteed comprehensive benefits regardless of health 
 status, age, place of residence or employment status.  Health plans are 
 prohibited from discriminating based on existing medical conditions and 
 other individual characteristics. 
 
      Medicare beneficiaries continue to receive all current benefits 
 and, in 1996, receive a new benefit covering outpatient prescription 
 drugs.  Financial support for long-term care also expands.  
 
 
 COST-SHARING
 
      Health plans adopt one of three standard cost-sharing 
 arrangements: 
 
      *     Low cost-sharing: This follows the existing model for 
            integrated health plans, such as health maintenance 
            organizations.  Consumers pay $10 co-payments for 
            outpatient and professional services and do not make 
            additional co-payments for inpatient services, preventive 
            services, or home health care following an acute illness. 
 
            To obtain care from providers outside the network, plans 
            may offer a point-of-service option that allows patients to 
            visit any doctor, including those who may not belong to the 
            patient's plan.
 
      *     Higher cost-sharing: Following the existing model for fee-
            for-service plans, consumers may choose to see any 
            provider.  Individuals pay $200 annual deductibles before 
            coverage begins; families pay a $400 deductible.  Consumers 
            pay 20 percent co-insurance after meeting the deductible.  
            No individual pays more than $1500, and no family pays more 
            than $3000.  Consumers are not charged for preventive 
            services included in the benefits package.
 
      *     Combination: Following the existing model for preferred 
            provider organizations, consumers pay low cost-sharing ($10 
            co-payments) when seeing physicians and other professionals 
            in the provider network and higher cost sharing (20 percent 
            co-insurance) when they consult providers who are not 
            participants in the network.  Preventive services are 
            provided without charge.
 
 
 CHOICE OF HEALTH PLANS
 
 
      The Health Security plan allows individuals, rather than 
 employers, to choose their health plans on the basis of quality and 
 price.  Today, only half of employed individuals have a choice of 
 health plans.  For the rest, employers choose their health plans, 
 locking individuals and families into a system of care delivery and 
 determining how much they pay out of pocket. 
 
      Because the Health Security plan requires that alliances provide 
 at least one traditional fee-for-service plan, it preserves consumers' 
 ability to choose their own doctors and other health providers -- an 
 option that is not available to many today.
 
      Likewise, doctors and other health providers may choose to 
 participate in as many or as few of an alliance's health plans as they 
 want.
 
      Individuals whose employers provide more generous benefits than 
 the nationally defined comprehensive benefits may continue those 
 benefits at their current level without
 any change in coverage or cost.
 
 
 SUPPLEMENTAL INSURANCE
 
 
      Health plans may offer standardized supplemental insurance 
 policies to cover cost-sharing or health benefits above and beyond the 
 comprehensive benefits package.  Employers may contribute to purchase 
 supplemental coverage for their employees.  Health plans that adopt the 
 high-cost sharing option must offer their participants the opportunity 
 to purchase supplemental insurance policies that cover cost sharing.
 
      Supplemental insurance policies may not duplicate coverage of any 
 services provided under the nationally guaranteed comprehensive benefit 
 package.  
 
 
 LONG-TERM CARE
 
 
      Existing nursing home coverage under Medicaid continues.  
 Disabled Americans of all ages gain access to a wider variety of home 
 and community-based support services, making it possible to continue to 
 live at home.  The Health Security plan also provides the following 
 expansions and improvements in coverage for long-term care: 
 
      *     Improvements in Medicaid coverage for institutional care 
            expand eligibility for nursing home coverage.  The amount 
            of income and assets Medicaid beneficiaries may retain 
            increase to $12,000 and the $30-a-month living allowance 
            rises to $100.
 
      *     The establishment of national standards improves the 
            quality and reliability of private long-term care 
            insurance, while tax preferences encourages its purchase.
 
      *     Tax incentives also support the efforts of people with 
            disabilities to work, covering 50 percent of their costs 
            for personal assistance and other necessary support.
 
 
 MEDICARE 
 
 
      Medicare recipients experience no change in how and where they 
 obtain health care or their existing benefits.  In 1996, Medicare 
 benefits expand to include coverage for prescription drugs under the 
 Medicare Part B policy.
 
      Medicare continues as a federally run program for individuals 
 over age 65.  Once the new health care system is in place, individuals 
 have the option of enrolling in Medicare or remaining in their health 
 plan when they turn 65.    
 
      Medicare beneficiaries have a broader range of choice through the 
 expansion of managed care plans. 
 
      As the alliance system is fully implemented, states may provide 
 Medicare benefits through alliances, provided the interests of Medicare 
 beneficiaries and the Federal Treasury are safeguarded, and there is no 
 reduction in benefits.  
 
 
 MEDICAID 
 
 
      Medicaid recipients under the age of 65 who are not eligible for 
 cash assistance either through Aid to Families with Dependent Children 
 or Supplemental Security Income no longer enroll in Medicaid.  They 
 choose a health plan through their area alliance, with 80 percent of 
 the premium covered by employer contributions if they are employed, or 
 premium discounts if they are unemployed and have low incomes.  
 
      Medicaid continues to pay the cost of health insurance for 
 recipients of AFDC and SSI, who also pick a plan offered by the 
 regional alliance.  They may choose any plan priced at or below the 
 weighted-average premium without making additional payments.
 
      Like other members of the alliance, former Medicaid recipients 
 with incomes below 150 percent of poverty are eligible for discounts to 
 cover a portion of the cost of co-payments and deductibles if no plan 
 with low cost sharing is available at or below the average premium.  
 Health plans receive the same payment for Medicaid recipients as for 
 other participants, reducing any stigma associated with obtaining 
 coverage through Medicaid.
 
      To pay for services covered in the comprehensive benefits to 
 families that receive Aid to Families with Dependent Children and 
 Supplemental Security Income payments, Medicaid pays health plans a 
 fixed rate for each participant.  Payments from the alliance to health 
 plans are risk adjusted.  
 
      Medicaid coverage for other services, including nursing home 
 coverage and special services for the severely disabled and 
 supplemental services, continue as a public program.
 
 
 RETIREES
 
 
      Americans who retire before age 65 and were employed for at least 
 the amount of time used as a standard to qualify for Social Security 
 purchase health coverage through their regional alliance and pay only 
 the employee share of the premium for their health plan.  The federal 
 government pays the 80 percent employer share.
 
      Although they may choose to pay more, employers whose retirement 
 plans cover health insurance premiums for retired workers are 
 responsible for paying only the employee's share, or 20 percent of the 
 average premium.
 
 
 
                  CONTROLLING COSTS: MARKETPLACE REFORMS 
 
 
      The Health Security plan controls rising costs and improves the 
 quality of health care by enlisting the power of a competitive market 
 and empowering consumers to make choices that suit their needs.
 
      Reform reduces administrative costs and frees up resources to 
 improve quality and access for all Americans.  The Health Security 
 plan: 
 
      *     Changes incentives in the insurance market so that health 
            plans compete on the basis of quality, service and cost -- 
            not risk selection. 
 
            Reform requires health plans to accept all applicants, and 
            it forbids them from dropping anyone from coverage or 
            charging some consumers more than others on the basis of 
            age, gender, or health status or any personal 
            characteristic.  
 
      *     Empowers consumers to make more cost-conscious decisions by 
            choosing among health plans on the basis of price and 
            quality.
 
            Consumers reap the savings from enrolling in a health plan 
            that delivers the guaranteed benefits for a lower premium.  
            If they prefer a plan that costs more, they pay the 
            difference.
 
      *     Promotes the development of health plans that give 
            consumers better value for their money.
 
            In the current system, doctors and hospitals get paid extra 
            for each service they perform.  Under reform, health plans 
            become accountable for both quality and price.  The 
            incentives change from "doing more" to giving consumers 
            better value.
 
      *     Improves information about quality of care. 
 
            The program calls for regular monitoring of access, 
            consumer satisfaction and the appropriateness and 
            effectiveness of care.   Consumers receive annual 
            performance reports on health plans.
 
            The Health Security plan also expands research related to 
            the effectiveness of medical treatments and courses of 
            care, fosters the development of practice guidelines and 
            provides other information to help doctors, nurses and 
            other professionals deliver more effective care. 
 
      *     Creates standard reimbursement forms and requirements that 
            simplify the business side of health care.  
 
            With some 1,200 different payers of health costs, 
            hospitals, clinics and doctors contend with thousands of 
            forms, conflicting regulations and inspections by a variety 
            of federal, state, local and private agencies.  The plan 
            creates standard reimbursement rules and inspection 
            procedures that streamline the system, reducing 
            administrative overhead for providers.
 
      *     Lowers administrative costs for small groups and 
            individuals as firms with fewer than 5,000 employees and 
            the self employed join alliances, consolidating 
            administration and purchasing tasks. 
 
            These groups currently pay as much as much as 30-40 percent 
            of premiums to support administrative overhead, compared to 
            5-7 percent for large firms.
 
 
 
          ENFORCEABLE CAP: THE BACK-STOP FOR COST CONTAINMENT
 
  
      While ample evidence demonstrates that competition and increased 
 efficiency control costs, the Health Security plan builds in a back-up 
 measure to control health care costs: an enforceable cap.
 
      The cap is met through capping the growth in insurance premiums 
 paid by individuals and businesses to cover the guaranteed benefits.  
 The Health Security plan guarantees comprehensive benefits and limits 
 the rate of growth in premiums paid by employers and consumers for 
 these benefits.  By the end of the decade, insurance premiums are held 
 to the rate of inflation.
 
      Those limits are reasonable and achievable, given reforms that 
 enhance competition in the health insurance market, simplify the system 
 and reduce administrative costs, expand consumer choice and strengthen 
 the negotiating power of employers and consumers through health 
 alliances.
 
      The projected rage of growth in federal and state spending for 
 Medicaid is similarly limited, with coverage for Medicaid recipients 
 provided through regional alliances.  Specific reforms hold Medicare to 
 comparable, but slightly higher, limits.
 
      Health insurance premiums pay for coverage in the new system, 
 just as health insurance premiums pay for coverage today.  The Health 
 Security plan limits how fast the cost of those premiums increase.
 
      Alliance premium targets are based on the current level of health 
 care spending in each area.  They, therefore, vary substantially from 
 alliance to alliance.  The National Health Board appoints a commission 
 to explore methods to reduce these variations over time.
 
        In each regional health alliance, health plans bid each year to 
 provide the guaranteed benefits, and alliances negotiate with them over 
 premium levels.  Premiums vary from plan to plan.
 
      If the average premium across all plans is less than the 
 alliance's premium target -- that is, if premiums, on average, are 
 increasing consistent with inflation -- then no enforcement is 
 triggered.
 
      If the average premium across all plans exceeds the alliance's 
 premium target, the premium, the cap prevents premiums from rising 
 beyond the target.  In that case, plans whose proposed premium 
 increases exceed the allowed rate of growth are required to accept 
 lower premiums.   The plan must adjust its payment rates to providers 
 or accept lower profits to make up the difference. 
 
 
 CORPORATE ALLIANCES  
 
 
      Large employers that form corporate alliances are expected to 
 comply with the same limits on premium increases as regional alliances.  
 If premiums in a corporate alliance exceed the allowed rate of growth 
 during two of any three years, the Department of Labor may require the 
 corporation to purchase coverage through regional alliances.
 
 
 
                       STRUCTURE OF THE NEW SYSTEM
 
 
      A new national framework organizes the market for health 
 coverage; the federal government, states and alliances divide 
 responsibilities as follows:
 
 **********************************************************************
      Federal Government: Sets the basic framework for the system
 
      *     Defines guaranteed benefits package 
      *     Determines caps on growth in insurance premiums
      *     Reforms insurance system
      *     Establishes quality standards
 
 
      States: Implement health care reform within federal framework
 
      *     Establish alliance(s)
      *     Certify health plans
      *     Monitor quality and availability of care 
      *     Implement insurance reform
 
 
      Alliances: Serve as purchasing agent for employers and 
      consumers 
 
      *     Solicit competitive bids from health plans
      *     Distribute consumer information materials
      *     Collect premiums and pay health plans
 
 **********************************************************************
 
 
 NATIONAL FRAMEWORK
 
 
      The new framework for health security includes these components:
 
      *     An independent National Health Board acts as the board of 
            directors for the health care system, setting national 
            standards and overseeing implementation of reform. 
 
      *     States establish alliances and qualify health plans.  
            Tailoring the system to local needs, states may create a 
            single-payer system by establishing only one alliance and 
            negotiating directly with providers.
 
      *     Regional and corporate alliances bring together consumers 
            and employers, acting as their advocates in negotiations 
            with competing health plans over service and price. 
 
      *     Competing health plans deliver health services covered in 
            the guaranteed comprehensive benefit.  Each alliance offers 
            a menu of plans, including a traditional fee-for-service 
            arrangement, preferred provider organizations and health 
            maintenance organizations. 
 
 
 FEDERAL RESPONSIBILITIES AND NATIONAL HEALTH BOARD 
 
 
      The National Health Board consists of seven members appointed by 
 the President with the advice and consent of the Senate.  The National 
 Health Board assumes certain responsibilities for administering the new 
 health care system, while existing federal agencies assume others.  The 
 Board:
 
      *     Sets national standards for state plans and ensures access 
            to health care for all Americans.
 
      *     Interprets and updates the comprehensive benefits and 
            recommends to the President and Congress changes in the 
            health care system.
 
      *     Establishes a new performance-based quality management 
            program and develops valid measures of health outcomes to 
            be used in annual performance reports for health plans.
 
      *     Develops and implements standards for a national health 
            information system, using a public-private network to 
            support quality improvement and collects enrollment data 
            and comparative information about cost.  
 
      *     Implements the safety net of the national health budget.     
 
 
 STATE RESPONSIBILITIES
 
 
      States ensure that all eligible individuals enroll in a regional 
 or corporate alliance and have access to a health plan that delivers 
 the guaranteed comprehensive benefit.  Each state must implement plans 
 approved by the National Health Board by January 1, 1997.  
 
      States may begin to implement the new system as early as January 
 1, 1995.   Implementation involves adopting federal standards and 
 establish health alliances.  
 
      Within the broad federal guidelines, states exercise flexibility 
 in the design and governance of regional health alliances.  States have 
 the option to implement a single-payer system.
 
      States certify health plans, much as they license health 
 providers and insurance companies today.  They determine mechanisms for 
 evaluating the quality of health plans, their financial stability and 
 capacity to deliver the guaranteed benefits, as well as compliance with 
 prohibitions against discrimination based on race, ethnicity, gender, 
 income and health status. 
 
      Only certified plans may offer health coverage through alliances.  
 In the case of areas where no health plan forms, the state must assure 
 that at least one health plan is available to cover every eligible 
 individual.  
 
 
 HEALTH ALLIANCES
 
 
      Each state creates one or more regional alliances that organize a 
 menu of health plans, negotiate premiums and enroll individuals in 
 plans.  Within broad federal parameters, states exercise flexibility in 
 the design and governance of regional alliances.
 
      The vast majority of people continue to choose their health care 
 coverage through their employers, who provide information on area 
 health plans available through the alliance.  The following groups 
 obtain health coverage through regional alliances:
 
      *     Employees in firms with fewer than 5000 employees
      *     Employees of federal, state and local governments
      *     Individuals who are self-employed
      *     Part-time workers
      *     Retirees not yet eligible for Medicare
      *     Individuals who are not employed.
 
 
      Health alliances consolidate the purchasing power of individuals, 
 small- and medium-size businesses to secure the best health coverage 
 for the lowest price.  Alliances organize and streamline the fragmented 
 insurance system, replacing health insurance brokers, agents and 
 underwriters with consumer-run organizations focused on providing 
 access, service, quality and affordable care. 
 
      Alliances drive the competitive forces that make the new system 
 work for consumers and employers.  Their mission is to:  
 
      *     Bargain with health plans on behalf of consumers, business 
            and purchasers of health care services. 
 
      *     Negotiate premiums and coverage and ensure the delivery of 
            high-quality care while controlling costs.
 
      *     Assure that all residents in the area enroll in health 
            plans that provide the guaranteed comprehensive benefits. 
 
 
      Where inadequate services exist, alliances may organize health 
 providers or use financial incentives to encourage health plans to 
 expand.
 
      Alliances operate as non-profit corporations, independent state 
 agencies or agencies of the executive branch of the state.  The board 
 of each alliance includes an even number of consumer and employer 
 representatives but may not include health providers and others who 
 profit from the industry.  Each alliance also forms an advisory board 
 composed of health care professionals and providers who practice in its 
 health plans.
 
      Alliances hold an annual open enrollment period during which they 
 offer consumers a menu of health plans, including at least one 
 traditional fee-for-service plan.
 
      Alliances negotiate rates for premiums with each health plan and 
 collect premium contributions.  Alliances pay health plans a fixed 
 premium for each individual or family that enrolls, adjusting the total 
 payments to plans to reflect the health status of that plan's 
 participants.
 
 
 CORPORATE ALLIANCES
 
 
      Firms employing more than 5000 workers, Taft-Hartley plans and 
 rural cooperatives are eligible to organize corporate alliances, 
 although they may also choose to purchase coverage through regional 
 alliances.  Corporate alliances resemble the operation of large 
 employers' benefit departments, arranging premiums and the delivery of 
 services. 
 
      Corporate alliances provide health benefits to their employees 
 either through a self-funded employee benefit plan or through contracts 
 with health plans.  They operate under the same rules as regional 
 alliances except that the population served is limited to company 
 employees and their dependents.  Each corporate alliance contracts with 
 at least one fee-for-service plan and offers at least two other health 
 plans. 
  
      The U.S. Department of Labor monitors the operation of corporate 
 alliances, fulfilling the same role that it assumes under the Employee 
 Retirement Income Security Act of 1974 (ERISA). 
 
      Organizations eligible to form corporate alliances may exercise a 
 one-time option to have individual establishments with fewer than 100 
 employees join regional alliances at community rates.  Large 
 corporations also periodically have the option to join regional 
 alliances at a risk-adjusted rate, which gradually declines to the 
 community rate.
 
      A new chapter in ERISA establishes fiduciary and enforcement 
 requirements for employers and other sponsoring health benefit plans in 
 corporate alliances.
 
 
 HEALTH PLANS
 
 
      Competing health plans provide medical services guaranteed in the 
 comprehensive benefits, delivering them through fee-for-service 
 networks, preferred provider organizations and health maintenance 
 organizations.  Health plans may not:
 
      *     Deny enrollment to any person based on individual 
            characteristics, health status or anticipated need for 
            health care.
   
      *     Terminate, restrict or limit coverage for the comprehensive 
            benefit package for any reason.  
 
      *     Cancel coverage for any eligible individual until that 
            individual is enrolled in another health plan.
 
 
 COMMUNITY RATING
 
 
      Health plans offer coverage at the same rates for all 
 participants, regardless of age, health or other personal 
 characteristics.  Alliances adjust payments to health plans to account 
 for the level of risk among individuals enrolled in each plan.
 
 
 
                         IMPROVING HEALTH SERVICES
 
 
      The Health Security plan seeks to remove financial and non-
 financial barriers that limit care for Americans who live in urban 
 centers, rural communities and those who suffer from certain illnesses.  
 Because a disproportionate number of residents of rural communities and 
 urban centers lack health coverage today, universal coverage will bring 
 major new health resources into those communities.  
 
      The plan improves access specifically for Americans who live in 
 rural areas through initiatives to:
 
      *     Develop communications links between rural health 
            professionals and academic health centers.
 
      *     Create incentives to expand community-based networks of 
            health providers and plans, such as long-term contracts for 
            health plans in rural areas and federal loan guarantees for 
            capital improvements.
 
      *     Attract health professionals to rural areas through the 
            expansion of the National Health Service Corps, tax 
            incentives to encourage practice in rural areas, and 
            changes that increase compensation for primary care 
            physicians who serve Medicare beneficiaries.
 
      *     Expand the rural public health system, including support 
            for transportation, outreach, case management, translation, 
            health education, nutrition, social support, child care and 
            home visiting services.
 
 
      The Health Security plan makes federal grants and loans available 
 in underserved urban communities for capital investment.  The 
 government further supports the efforts of traditional health care 
 providers, such as community-based clinics, to adapt to the new system 
 through designation as essential community providers.
 
      Essential community providers receive special protection: For 
 five years, health plans are required to reimburse these providers for 
 services.  At the end of that period, health plans must either 
 demonstrate their capacity to provide access for all participants -- 
 including residents of undeserved areas -- or continue contracting with 
 essential providers.
 
      Federal block grants that support community health centers, 
 family planning clinics, health care for homeless families and maternal 
 and child health programs continue.  New initiatives include funding 
 for school-based clinics.
 
 
 
                                TRANSITION
 
 
 STATE IMPLEMENTATION
 
 
      States begin implementation of the new system as early as January 
 1, 1995  Most states come into the system in 1996; the rest are 
 required to begin implementation by 1997.
 
      At the time of state implementation, federal discounts for small, 
 low-wage employers and low-income individuals and families become 
 available.  States that expedite implementation receive financial 
 incentives including special start-up funds, and early access to 
 federal funding for discounts.  
 
      Organizations eligible to establish corporate alliances must 
 begin providing the guaranteed benefit package by January 1, 1997. 
 
 
 INSURANCE REFORM
 
 
      To reduce the potential for disruption during transition, interim 
 insurance reform imposes new rules including:
  
      *     Prohibitions against dropping consumers from coverage. 
 
      *     Prohibitions against profiteering. 
 
      *     Prohibitions against reducing coverage.
 
      *     Creation of a national risk pool to assure access to 
            coverage during the transition. 
 
      *     Assurance of portability of coverage
 
 
 
             FINANCING HEALTH COVERAGE IN THE PRIVATE MARKET
 
 
      The Health Security plan caps employer contributions for 
 insurance premiums as a percent of payroll.  The cost of providing 
 health coverage declines for most firms that currently provide 
 insurance. 
 
      *     The plan eliminates the $25 billion that employers 
            pay each year to cover the cost for uninsured patients. 
 
      *     In the current system, many employers pay the entire 
            premium for family policies, while the employer of a 
            worker's spouse makes no contribution.  Under reform, both 
            employers share the cost for families in which two spouses 
            work.
 
      *     In the current system, health insurance premiums for 
            many employers total more than 10 percent of payroll. Under 
            reform, premiums paid by employers purchasing through 
            regional alliances are capped at 7.9 percent of payroll.  
 
            Businesses that employ fewer than 50 workers receive 
            additional discounts on their insurance premiums, reducing 
            their contributions to between 3.5 percent and 7.9 percent 
            of payroll.
 
      *     Under reform, employers in regional alliances pay 
            community rates that do not vary according to the age, 
            gender or health status of their workers.  
 
            Employer obligations for insurance premiums are calculated 
            based on the average premium among health plans in their 
            area.  As competition among health plans -- backed up by 
            national caps on premium increases -- brings the rate of 
            growth in health costs under control, the projected rate of 
            growth in health costs declines throughout the business 
            sector.
 
 
 EMPLOYER PAYMENTS
 
 
      *     Employers pay 80 percent of the average premium in the 
            alliance toward the cost of the policy chosen by the 
            employee, which depends on the employee's family status.
 
            For employees with a spouse, the employer contribution is 
            reduced to reflect the contributions on behalf of dual wage 
            earners in the alliance region.
 
      *     For part-time workers, employers pay a pro-rata share of 
            the 80 percent employer contribution based on the number of 
            hours worked.
 
 
 CONSUMER PAYMENTS
 
 
      Working Individuals and Families: Individuals and families in 
 which at least one person works pay a maximum of 20 percent of the 
 premium to enroll in the average-cost health plan in their area.
 
      *     Those who choose a lower-cost plan pay less than the 20 
            percent average.
 
      *     Those who choose a more expensive plan pay more, as they do 
            today.
 
      *     Employers who currently pay 100 percent of the premium for 
            their employees may continue to do so.
 
 
      Working individuals and families may have their share of the 
 premium deducted from their paychecks or write a check to the local 
 health alliance.
 
      Consumers pay premiums based on the type of policy they need to 
 purchase:
 
      *     Two parent family with children.
 
      *     Couple.
 
      *     Single parent family.
 
      *     Single individual.
 
      Individuals and families with incomes below 150 percent of the 
 federal poverty level  -- $21,525 for a family of four -- are eligible 
 for discounts on the employee's share of the premium.
 
      Part-Time Workers:  Part-time workers are responsible for the 20 
 percent employee share of the premium, and workers with incomes below 
 150 percent of the poverty level receive discounts.  
 
      The number of hours an employee works determines how much of the 
 employer share of the premium is paid by the employer and how much by 
 the worker.  For example, an employer would pay 40 percent of the 
 premium for someone who works half-time.  The worker is responsible for 
 the remaining 40 percent of the premium, with discounts provided on a 
 sliding-scale basis.
 
      A part-time worker with more than one job receives contributions 
 from more than one employer toward the employer's share of the premium.
 
      Unemployed Individuals:  Unemployed individuals and families are 
 responsible for the 20 percent employee share of the premium and 
 receive a discount if their incomes are below 150 percent of the 
 poverty level.  They also are responsible for what would be the 
 employer's share of the premium but receive discounts on a sliding-
 scale basis to help cover the cost.
 
      Self-employed Individuals: The self-employed worker pays the 20 
 percent employee share of the premium and receives a discount if his or 
 her income is below 150 percent of the poverty level.  Self-employed 
 workers also are responsible for the 80 percent employer share and 
 receive the same discounts as small employers.  They may deduct from 
 their taxes 100 percent of their health care premiums.   
 
 
 TAX DEDUCTIBILITY
 
 
      Employer contributions toward the premium and toward cost sharing 
 related to the nationally guaranteed comprehensive benefit -- as well 
 as for additional benefits phased in by the year 2001 -- are fully tax 
 deductible and not counted as taxable income for employees.
 
      Tax preferences continue for benefits in excess of the nationally 
 guaranteed benefit package offered as of January 1, 1993, for ten years 
 after enactment of health reform. 
 
 






                     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 of guaranteed, comprehensive benefits. 
 *    Health care costs that are under control.
 *    Improved quality of care.
 *    Increased choices for consumers.
 *    Less paperwork and a simpler system.
 *    Responsibility from everyone.
      
                That's what the Health Security Act is all about.
 
 Principle #1:
 Security: Guaranteed, comprehensive benefits. 
 
 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. 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. 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. 

 *    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 
      you 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, immunizations, 
      mammograms, prenatal care)
 *    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 #2: 
 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 #3:
 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 #4:
 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 #5:
 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. 
   
 Principle #6: 
 Responsibility: Making everyone responsible for health care.
 
 *    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. 
   
 *    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.  It offers you full coverage of a wide range of 
      preventive services, but asks you to take responsibility for 
      keeping yourself healthy. 
   
 *    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.
   
   *  Everyone contributes, and no one gets a free ride. In America, 
      rights and responsibilities go hand-in-hand. Everyone will get a 
      Health Security card that guarantees you a comprehensive package 
      of benefits that can never be taken away. But we will ask 
      everybody to pay something, even if your contribution is small.  
      Small businesses and low-wage workers will get substantial 
      discounts on the cost of insurance, but everyone must take 
      responsibility.
   
                    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) Medicare savings -- The savings from reducing the growth of 
 Medicare are based on specific, scorable policy proposals. Every penny 
 of these savings will be channeled back into benefits -- prescription 
 drugs and long-term care -- for the people which these programs serve. 
 
 2)  Medicaid savings -- The rate of growth of Medicaid can be reduced 
 primarily by folding the acute care portion of Medicaid into the 
 overall health care system.  Since everyone will be insured, there 
 will be savings in "uncompensated care" -- the money that goes to 
 doctors and hospitals to compensate for caring for the uninsured.
 
 3) Savings from federal employee health care costs -- As all federal 
 workers are integrated into the overall health care system, there 
 will be less expense to taxpayers to provide for their health care.
 
 4) Reducing the benefits of tax-free compensation -- By reducing the 
 rate of growth for health insurance, the President's proposal lowers 
 the amount of compensation paid as tax-free health benefits, and 
 frees up money for higher wages, wages for new workers, or 
 profits -- all of which are taxable and thus bring in new federal
 revenues. 
 
 5) Sin taxes -- There will be some new "sin taxes," the composition of 
 which is not yet decided.   
  
 In addition, there will be other savings. Reducing paperwork and 
 administration, cracking down on health care fraud, and emphasizing 
 prevention will save money in the long-run.
 
                         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.
 






President's Speech as Delivered    
             

                           THE WHITE HOUSE

                    Office of the Press Secretary
_________________________________________________________________
For Immediate Release                         September 22, 1993     

     
                      ADDRESS OF THE PRESIDENT
                  TO THE JOINT SESSION OF CONGRESS
     
                            U.S. Capitol
                          Washington, D.C.
     

9:10 P.M. EDT
     
     
     THE PRESIDENT:  Mr. Speaker, Mr. President, members of Congress,
distinguished guests, my fellow Americans.  Before I begin my words
tonight I would like to ask that we all bow in a moment of silent
prayer for the memory of those who were killed and those who have
been injured in the tragic train accident in Alabama today.  (A
moment of silence is observed.)  Amen.
     
     My fellow Americans, tonight we come together to write a new
chapter in the American story.  Our forebears enshrined the American
Dream -- life, liberty, the pursuit of happiness.  Every generation
of Americans has worked to strengthen that legacy, to make our
country a place of freedom and opportunity, a place where people who
work hard can rise to their full potential, a place where their
children can have a better future.
     
     From the settling of the frontier to the landing on the moon,
ours has been a continuous story of challenges defined, obstacles
overcome, new horizons secured.  That is what makes America what it
is and Americans what we are.  Now we are in a time of profound
change and opportunity.  The end of the Cold War, the Information
Age, the global economy have brought us both opportunity and hope and
strife and uncertainty.  Our purpose in this dynamic age must be to
change -- to make change our friend and not our enemy.
     
     To achieve that goal, we must face all our challenges with
confidence, with faith, and with discipline -- whether we're reducing
the deficit, creating tomorrow's jobs and training our people to fill
them, converting from a high-tech defense to a high-tech domestic
economy, expanding trade, reinventing government, making our streets
safer, or rewarding work over idleness.  All these challenges require
us to change.
     
     If Americans are to have the courage to change in a difficult
time, we must first be secure in our most basic needs.  Tonight I
want to talk to you about the most critical thing we can do to build
that security.  This health care system of ours is badly broken and
it is time to fix it.  (Applause.)
     
     Despite the dedication of literally millions of talented health
care professionals, our health care is too uncertain and too
expensive, too bureaucratic and too wasteful.  It has too much fraud
and too much greed.  
     
     At long last, after decades of false starts, we must make this
our most urgent priority, giving every American health security;
health care that can never be taken away; health care that is always
there.  That is what we must do tonight.  (Applause).
     
     On this journey, as on all others of true consequence, there
will be rough spots in the road and honest disagreements about how we
should proceed.  After all, this is a complicated issue.  But every
successful journey is guided by fixed stars.  And if we can agree on
some basic values and principles we will reach this destination, and
we will reach it together.  
     
     So tonight I want to talk to you about the principles that I
believe must embody our efforts to reform America's health care
system -- security, simplicity, savings, choice, quality, and
responsibility.
     
     When I launched our nation on this journey to reform the health
care system I knew we needed a talented navigator, someone with a
rigorous mind, a steady compass, a caring heart.  Luckily for me and
for our nation, I didn't have to look very far.  (Applause.) 
     
     Over the last eight months, Hillary and those working with her
have talked to literally thousands of Americans to understand the
strengths and the frailties of this system of ours.  They met with
over 1,100 health care organizations.  They talked with doctors and
nurses, pharmacists and drug company representatives, hospital
administrators, insurance company executives and small and large
businesses.  They spoke with self-employed people.  They talked with
people who had insurance and people who didn't.  They talked with
union members and older Americans and advocates for our children. 
The First Lady also consulted, as all of you know, extensively with
governmental leaders in both parties in the states of our nation, and
especially here on Capitol Hill.
     
     Hillary and the Task Force received and read over 700,000
letters from ordinary citizens.  What they wrote and the bravery with
which they told their stories is really what calls us all here
tonight.  
     
     Every one of us knows someone who's worked hard and played by
the rules and still been hurt by this system that just doesn't work
for too many people.  But I'd like to tell you about just one.  
     
     Kerry Kennedy owns a small furniture store that employs seven
people in Titusville, Florida.  Like most small business owners, he's
poured his heart and soul, his sweat and blood into that business for
years.  But over the last several years, again like most small
business owners, he's seen his health care premiums skyrocket, even
in years when no claims were made.  And last year, he painfully
discovered he could no longer afford to provide coverage for all his
workers because his insurance company told him that two of his
workers had become high risks because of their advanced age.  The
problem was that those two people were his mother and father, the
people who founded the business and still worked in the store.
     
     This story speaks for millions of others.  And from them we have
learned a powerful truth.  We have to preserve and strengthen what is
right with the health care system, but we have got to fix what is
wrong with it.  (Applause.)
     
     Now, we all know what's right.  We're blessed with the best
health care professionals on Earth, the finest health care
institutions, the best medical research, the most sophisticated
technology.  My mother is a nurse.  I grew up around hospitals. 
Doctors and nurses were the first professional people I ever knew or
learned to look up to.  They are what is right with this health care
system.  But we also know that we can no longer afford to continue to
ignore what is wrong.  
     
     Millions of Americans are just a pink slip away from losing
their health insurance, and one serious illness away from losing all
their savings.  Millions more are locked into the jobs they have now
just because they or someone in their family has once been sick and
they have what is called the preexisting condition.  And on any given
day, over 37 million Americans -- most of them working people and
their little children -- have no health insurance at all.

     And in spite of all this, our medical bills are growing at over
twice the rate of inflation, and the United States spends over a
third more of its income on health care than any other nation on
Earth.  And the gap is growing, causing many of our companies in
global competition severe disadvantage.  There is no excuse for this
kind of system.  We know other people have done better.  We know
people in our own country are doing better.  We have no excuse.  My
fellow Americans, we must fix this system and it has to begin with
congressional action.  (Applause.)
     
     I believe as strongly as I can say that we can reform the
costliest and most wasteful system on the face of the Earth without
enacting new broad-based taxes.  (Applause.)  I believe it because of
the conversations I have had with thousands of health care
professionals around the country; with people who are outside this
city, but are inside experts on the way this system works and wastes
money.
     
     The proposal that I describe tonight borrows many of the
principles and ideas that have been embraced in plans introduced by
both Republicans and Democrats in this Congress.  For the first time
in this century, leaders of both political parties have joined
together around the principle of providing universal, comprehensive
health care.  It is a magic moment and we must seize it.  (Applause.)
     
     I want to say to all of you I have been deeply moved by the
spirit of this debate, by the openness of all people to new ideas and
argument and information.  The American people would be proud to know
that earlier this week when a health care university was held for
members of Congress just to try to give everybody the same amount of
information, over 320 Republicans and Democrats signed up and showed
up for two days just to learn the basic facts of the complicated
problem before us.  
     
     Both sides are willing to say we have listened to the people. 
We know the cost of going forward with this system is far greater
than the cost of change.  Both sides, I think, understand the literal
ethical imperative of doing something about the system we have now. 
Rising above these difficulties and our past differences to solve
this problem will go a long way toward defining who we are and who we
intend to be as a people in this difficult and challenging era.  I
believe we all understand that.
     
     And so tonight, let me ask all of you -- every member of the
House, every member of the Senate, each Republican and each
Democrat -- let us keep this spirit and let us keep this commitment
until this job is done.  We owe it to the American people. 
(Applause.)
     
     Now, if I might, I would like to review the six principles I
mentioned earlier and describe how we think we can best fulfill those
principles.
     
     First and most important, security.  This principle speaks to
the human misery, to the costs, to the anxiety we hear about every
day -- all of us -- when people talk about their problems with the
present system.  Security means that those who do not now have health
care coverage will have it; and for those who have it, it will never
be taken away.  We must achieve that security as soon as possible.
     
     Under our plan, every American would receive a health care
security card that will guarantee a comprehensive package of benefits
over the course of an entire lifetime, roughly comparable to the
benefit package offered by most Fortune 500 companies.  This health
care security card will offer this package of benefits in a way that
can never be taken away.  
     
     So let us agree on this:  whatever else we disagree on, before
this Congress finishes its work next year, you will pass and I will
sign legislation to guarantee this security to every citizen of this
country.  (Applause.)
     
     With this card, if you lose your job or you switch jobs, you're
covered.  If you leave your job to start a small business, you're
covered.  If you're an early retiree, you're covered.  If someone in
your family has, unfortunately, had an illness that qualifies as a
preexisting condition, you're still covered.  If you get sick or a
member of your family gets sick, even if it's a life threatening
illness, you're covered.  And if an insurance company tries to drop
you for any reason, you will still be covered, because that will be
illegal.  This card will give comprehensive coverage.  It will cover
people for hospital care, doctor visits, emergency and lab services,
diagnostic services like Pap smears and mammograms and cholesterol
tests, substance abuse and mental health treatment. (Applause.)
     
     And equally important, for both health care and economic
reasons, this program for the first time would provide a broad range
of preventive services including regular checkups and well-baby
visits.  (Applause.)
     
     Now, it's just common sense.  We know -- any family doctor will
tell you that people will stay healthier and long-term costs of the
health system will be lower if we have comprehensive preventive
services.  You know how all of our mothers told us that an ounce of
prevention was worth a pound of cure?  Our mothers were right. 
(Applause.)  And it's a lesson, like so many lessons from our
mothers, that we have waited too long to live by.  It is time to
start doing it.  (Applause.)
     
     Health care security must also apply to older Americans.  This
is something I imagine all of us in this room feel very deeply about. 
The first thing I want to say about that is that we must maintain the
Medicare program.  It works to provide that kind of security. 
(Applause.)  But this time and for the first time, I believe Medicare
should provide coverage for the cost of prescription drugs. 
(Applause.)
     
     Yes, it will cost some more in the beginning.  But, again, any
physician who deals with the elderly will tell you that there are
thousands of elderly people in every state who are not poor enough to
be on Medicaid, but just above that line and on Medicare, who
desperately need medicine, who makes decisions every week between
medicine and food.  Any doctor who deals with the elderly will tell
you that there are many elderly people who don't get medicine, who
get sicker and sicker and eventually go to the doctor and wind up
spending more money and draining more money from the health care
system than they would if they had regular treatment in the way that
only adequate medicine can provide. 
     
     I also believe that over time, we should phase in long-term care
for the disabled and the elderly on a comprehensive basis. 
(Applause.)  
     
     As we proceed with this health care reform, we cannot forget
that the most rapidly growing percentage of Americans are those over
80.  We cannot break faith with them.  We have to do better by them.
     
     The second principle is simplicity.  Our health care system must
be simpler for the patients and simpler for those who actually
deliver health care -- our doctors, our nurses, our other medical
professionals.  Today we have more than 1,500 insurers, with hundreds
and hundreds of different forms.  No other nation has a system like
this.  These forms are time consuming for health care providers,
they're expensive for health care consumers, they're exasperating for
anyone who's ever tried to sit down around a table and wade through
them and figure them out. 
     
     The medical care industry is literally drowning in paperwork. 
In recent years, the number of administrators in our hospitals has
grown by four times the rate that the number of doctors has grown.  A
hospital ought to be a house of healing, not a monument to paperwork
and bureaucracy.  (Applause.)
     
     Just a few days ago, the Vice President and I had the honor of
visiting the Children's Hospital here in Washington where they do
wonderful, often miraculous things for very sick children.  A nurse
named Debbie Freiberg told us that she was in the cancer and bone
marrow unit.  The other day a little boy asked her just to stay at
his side during his chemotherapy.  And she had to walk away from that
child because she had been instructed to go to yet another class to
learn how to fill out another form for something that didn't have a
lick to do with the health care of the children she was helping. 
That is wrong, and we can stop it, and we ought to do it. 
(Applause.)
     
     We met a very compelling doctor named Lillian Beard, a
pediatrician, who said that she didn't get into her profession to
spend hours and hours -- some doctors up to 25 hours a week just
filling out forms.  She told us she became a doctor to keep children
well and to help save those who got sick.  We can relieve people like
her of this burden.  We learned -- the Vice President and I did --
that in the Washington Children's Hospital alone, the administrators
told us they spend $2 million a year in one hospital filling out
forms that have nothing whatever to do with keeping up with the
treatment of the patients.  
     
     And the doctors there applauded when I was told and I related to
them that they spend so much time filling out paperwork, that if they
only had to fill out those paperwork requirements necessary to
monitor the health of the children, each doctor on that one hospital
staff -- 200 of them -- could see another 500 children a year.  That
is 10,000 children a year.  I think we can save money in this system
if we simplify it.  And we can make the doctors and the nurses and
the people that are giving their lives to help us all be healthier a
whole lot happier, too,  on their jobs.  (Applause.)
     
     Under our proposal there would be one standard insurance form --
not hundreds of them.  We will simplify also -- and we must -- the
government's rules and regulations, because they are a big part of
this problem.  (Applause.)  This is one of those cases where the
physician should heal thyself.  We have to reinvent the way we relate
to the health care system, along with reinventing government.  A
doctor should not have to check with a bureaucrat in an office
thousands of miles away before ordering a simple blood test.  That's
not right, and we can change it.  (Applause.)  And doctors, nurses
and consumers shouldn't have to worry about the fine print.  If we
have this one simple form, there won't be any fine print.  People
will know what it means.
     
     The third principle is savings.  Reform must produce savings in
this health care system.  It has to.  We're spending over 14 percent
of our income on health care -- Canada's at 10; nobody else is over
nine.  We're competing with all these people for the future.  And the
other major countries, they cover everybody and they cover them with
services as generous as the best company policies here in this
country.  
     
     Rampant medical inflation is eating away at our wages, our
savings, our investment capital, our ability to create new jobs in
the private sector and this public Treasury.  You know the budget we
just adopted had steep cuts in defense, a five-year freeze on the
discretionary spending, so critical to reeducating America and
investing in jobs and helping us to convert from a defense to a
domestic economy.  But we passed a budget which has Medicaid
increases of between 16 and 11 percent a year over the next five
years, and Medicare increases of between 11 and 9 percent in an
environment where we assume inflation will be at 4 percent or less. 
     
     We cannot continue to do this.  Our competitiveness, our whole
economy, the integrity of the way the government works and,
ultimately, our living standards depend upon our ability to achieve
savings without harming the quality of health care.  
     
     Unless we do this, our workers will lose $655 in income each
year by the end of the decade.  Small businesses will continue to
face skyrocketing premiums.  And a full third of small businesses now
covering their employees say they will be forced to drop their
insurance.  Large corporations will bear vivid disadvantages in
global competition.  And health care costs will devour more and more
and more of our budget.  Pretty soon all of you or the people who
succeed you will be showing up here, and writing out checks for
health care and interest on the debt and worrying about whether we've
got enough defense, and that will be it, unless we have the courage
to achieve the saving that are plainly there before us.  Every state
and local government will continue to cut back on everything from
education to law enforcement to pay more and more for the same health
care.  
     
     These rising costs are a special nightmare for our small
businesses -- the engine of our entrepreneurship and our job creation
in America today.  Health care premiums for small businesses are 35
percent higher than those of large corporations today.  And they will
keep rising at double-digit rates unless we act.  
     
     So how will we achieve these savings?  Rather than looking at
price control, or looking away as the price spiral continues; rather
than using the heavy hand of government to try to control what's
happening, or continuing to ignore what's happening, we believe there
is a third way to achieve these savings.  First, to give groups of
consumers and small businesses the same market bargaining power that
large corporations and large groups of public employees now have.  We
want to let market forces enable plans to compete.  We want to force
these plans to compete on the basis of price and quality, not simply
to allow them to continue making money by turning people away who are
sick or old or performing mountains of unnecessary procedures.  But
we also believe we should back this system up with limits on how much
plans can raise their premiums year in and year out, forcing people,
again, to continue to pay more for the same health care, without
regard to inflation or the rising population needs.
     
     We want to create what has been missing in this system for too
long, and what every successful nation who has dealt with this
problem has already had to do:  to have a combination of private
market forces and a sound public policy that will support that
competition, but limit the rate at which prices can exceed the rate
of inflation and population growth, if the competition doesn't work,
especially in the early going.
     
     The second thing I want to say is that unless everybody is
covered -- and this is a very important thing -- unless everybody is
covered, we will never be able to fully put the breaks on health care
inflation.  Why is that?  Because when people don't have any health
insurance, they still get health care, but they get it when it's too
late, when it's too expensive, often from the most expensive place of
all, the emergency room.  Usually by the time they show up, their
illnesses are more severe and their mortality rates are much higher
in our hospitals than those who have insurance.  So they cost us
more.
     
     And what else happens?  Since they get the care but they don't
pay, who does pay?  All the rest of us.  We pay in higher hospital
bills and higher insurance premiums.  This cost shifting is a major
problem.  
     
     The third thing we can do to save money is simply by simplifying
the system  -- what we've already discussed.  Freeing the health care
providers from these costly and unnecessary paperwork and
administrative decisions will save tens of billions of dollars.  We
spend twice as much as any other major country does on paperwork.  We
spend at least a dime on the dollar more than any other major
country.  That is a stunning statistic.  It is something that every
Republican and every Democrat ought to be able to say, we agree that
we're going to squeeze this out.  We cannot tolerate this.  This has
nothing to do with keeping people well or helping them when they're
sick.  We should invest the money in something else.
     
     We also have to crack down on fraud and abuse in the system. 
That drains billions of dollars a year.  It is a very large figure,
according to every health care expert I've ever spoken with.  So I
believe we can achieve large savings.  And that large savings can be
used to cover the unemployed uninsured, and will be used for people
who realize those savings in the private sector to increase their
ability to invest and grow, to hire new workers or to give their
workers pay raises, many of them for the first time in years.  
     
     Now, nobody has to take my word for this.  You can ask Dr. Koop. 
He's up here with us tonight, and I thank him for being here. 
(Applause.)  Since he left his distinguished tenure as our Surgeon
General, he has spent an enormous amount of time studying our health
care system, how it operates, what's right and wrong with it.  He
says we could spend $200 billion every year, more than 20 percent of
the total budget, without sacrificing the high quality of American
medicine.  
     
     Ask the public employees in California, who have held their own
premiums down by adopting the same strategy that I want every
American to be able to adopt -- bargaining within the limits of a
strict budget.  Ask Xerox, which saved an estimated $1,000 per worker
on their health insurance premium.  Ask the staff of the Mayo Clinic,
who we all agree provides some of the finest health care in the
world.  They are holding their cost increases to less than half the
national average.  Ask the people of Hawaii, the only state that
covers virtually all of their citizens and has still been able to
keep costs below the national average.
     
     People may disagree over the best way to fix this system.  We
may all disagree about how quickly we can do what -- the thing that
we have to do.  But we cannot disagree that we can find tens of
billions of dollars in savings in what is clearly the most costly and
the most bureaucratic system in the entire world.  And we have to do
something about that, and we have to do it now.  (Applause.)
     
     The fo  urth principle is choice.  Americans believe they ought
to be able to choose their own health care plan and keep their own
doctors.  And I think all of us agree.  Under any plan we pass, they
ought to have that right.  But today, under our broken health care
system, in spite of the rhetoric of choice, the fact is that that
power is slipping away for more and more Americans.
     
     Of course, it is usually the employer, not the employee, who
makes the initial choice of what health care plan the employee will
be in.  And if your employer offers only one plan, as nearly three-
quarters of small or medium-sized firms do today, you're stuck with
that plan, and the doctors that it covers.  
     
     We propose to give every American a choice among high-quality
plans.  You can stay with your current doctor, join a network of
doctors and hospitals, or join a health maintenance organization.  If
you don't like your plan, every year you'll have the chance to choose
a new one.  The choice will be left to the American citizen, the
worker -- not the boss, and certainly not some government bureaucrat.
     
     We also believe that doctors should have a choice as to what
plans they practice in.  Otherwise, citizens may have their own
choices limited.  We want to end the discrimination that is now
growing against doctors, and to permit them to practice in several
different plans.  Choice is important for doctors, and it is
absolutely critical for our consumers.  We've got to have it in
whatever plan we pass.  (Applause.)
     
     The fifth principle is quality.  If we reformed everything else
in health care, but failed to preserve and enhance the high quality
of our medical care, we will have taken a step backward, not forward. 
Quality is something that we simply can't leave to chance.  When you
board an airplane, you feel better knowing that the plane had to meet
standards designed to protect your safety.  And we can't ask any less
of our health care system.
     
     Our proposal will create report cards on health plans, so that
consumers can choose the highest quality health care providers and
reward them with their business.  At the same time, our plan will
track quality indicators, so that doctors can make better and smarter
choices of the kind of care they provide.  We have evidence that more
efficient delivery of health care doesn't decrease quality.  In fact,
it may enhance it.
     
     Let me just give you one example of one commonly performed
procedure, the coronary bypass operation.  Pennsylvania discovered
that patients who were charged $21,000 for this surgery received as
good or better care as patients who were charged $84,000 for the same
procedure in the same state.  High prices simply don't always equal
good quality.  Our plan will guarantee that high quality information
is available is available in even the most remote areas of this
country so that we can have high-quality service, linking rural
doctors, for example, with hospitals with high-tech urban medical
centers.  And our plan will ensure the quality of continuing progress
on a whole range of issues by speeding the search on effective
prevention and treatment measures for cancer, for AIDS, for
Alzheimer's, for heart disease, and for other chronic diseases.  We
have to safeguard the finest medical research establishment in the
entire world.  And we will do that with this plan.  Indeed, we will
even make it better.  (Applause.)
     
     The sixth and final principle is responsibility.  We need to
restore a sense that we're all in this together and that we all have
a responsibility to be a part of the solution.  Responsibility has to
start with those who profit from the current system.  Responsibility
means insurance companies should no longer be allowed to cast people
aside when they get sick.  It should apply to laboratories that
submit fraudulent bills, to lawyers who abuse malpractice claims, to
doctors who order unnecessary procedures.  It means drug companies
should no longer charge three times more per prescription drugs made
in America here in the United States than they charge for the same
drugs overseas.  (Applause.)
     
     In short, responsibility should apply to anybody to abuses this
system and drives up the cost for honest, hard-working citizens and
undermines confidence in the honest, gifted health care providers we
have.
     
     Responsibility also means changing some behaviors in this
country that drive up our costs like crazy.  And without changing it
we'll never have the system we ought to have.  We will never.  
     
     Let me just mention a few and start with the most important --
the outrageous cost of violence in this country stem in large measure
from the fact that this is the only country in the world where
teenagers can rout the streets at random with semi-automatic weapons
and be better armed than the police.  (Applause.)
     
     But let's not kid ourselves, it's not that simple.  We also have
higher rates of AIDS, of smoking and excessive drinking, of teen
pregnancy, of low birth weight babies.  And we have the third worst
immunization rate of any nation in the western hemisphere.  We have
to change our ways if we ever really want to be healthy as a people
and have an affordable health care system.  And no one can deny that. 
(Applause.)
     
     But let me say this -- and I hope every American will listen,
because this is not an easy thing to hear -- responsibility in our
health care system isn't just about them, it's about you, it's about
me, it's about each of us.  Too many of us have not taken
responsibility for our own health care and for our own relations to
the health care system.  Many of us who have had fully paid health
care plans have used the system whether we needed it or not without
thinking what the costs were.  Many people who use this system don't
pay a      
whether we needed it or not without thinking what the costs were. 
Many people who use this system don't pay a penny for their care even
though they can afford to.  I think those who don't have any health
insurance should be responsible for paying a portion of their new
coverage.  There can't be any something for nothing, and we have to
demonstrate that to people.  This is not a free system.  (Applause.) 
Even small contributions, as small as the $10-copayment when you
visit a doctor, illustrates that this is something of value.  There
is a cost to it.  It is not free.  
     
     And I want to tell you that I believe that all of us should have
insurance.  Why should the rest of us pick up the tab when a guy who
doesn't think he needs insurance or says he can't afford it gets in
an accident, winds up in an emergency room, gets good care, and
everybody else pays?  Why should the small businesspeople who are
struggling to keep afloat and take care of their employees have to
pay to maintain this wonderful health care infrastructure for those
who refuse to do anything?  
     
     If we're going to produce a better health care system for every
one of us, every one of us is going to have to do our part.  There
cannot be any such thing as a free ride.  We have to pay for it.  We
have to pay for it.
     
     Tonight I want to say plainly how I think we should do that. 
Most of the money we will -- will come under my way of thinking, as
it does today, from premiums paid by employers and individuals. 
That's the way it happens today.  But under this health care security
plan, every employer and every individual will be asked to contribute
something to health care. 
     
     This concept was first conveyed to the Congress about 20 years
ago by President Nixon.  And today, a lot of people agree with the
concept of shared responsibility between employers and employees, and
that the best thing to do is to ask every employer and every employee
to share that.  The Chamber of Commerce has said that, and they're
not in the business of hurting small business.  The American Medical
Association has said that.  
     
     Some call it an employer mandate, but I think it's the fairest
way to achieve responsibility in the health care system.  And it's
the easiest for ordinary Americans to understand, because it builds
on what we already have and what already works for so many Americans. 
It is the reform that is not only easiest to understand, but easiest
to implement in a way that is fair to small business, because we can
give a discount to help struggling small businesses meet the cost of
covering their employees.  We should require the least bureaucracy or
disruption, and create the cooperation we need to make the system
cost-conscious, even as we expand coverage.  And we should do it in a
way that does not cripple small businesses and low-wage workers.
     
     Every employer should provide coverage, just as three-quarters
do now.  Those that pay are picking up the tab for those who don't
today.  I don't think that's right.  To finance the rest of reform,
we can achieve new savings, as I have outlined, in both the federal
government and the private sector, through better decision-making and
increased competition.  And we will impose new taxes on tobacco. 
(Applause.)
     
     I don't think that should be the only source of revenues.  I
believe we should also ask for a modest contribution from big
employers who opt out of the system to make up for what those who are
in the system pay for medical research, for health education center,
for all the subsidies to small business, for all the things that
everyone else is contributing to.  But between those two things, we
believe we can pay for this package of benefits and universal
coverage and a subsidy program that will help small business.
     
     These sources can cover the cost of the proposal that I have
described tonight.  We subjected the numbers in our proposal to the
scrutiny of not only all the major agencies in government -- I know a
lot of people don't trust them, but it would be interesting for the
American people to know that this was the first time that the
financial experts on health care in all of the different government
agencies have ever been required to sit in the room together and
agree on numbers.  It had never happened before.  
     
     But, obviously, that's not enough.  So then we gave these
numbers to actuaries from major accounting firms and major Fortune
500 companies who have no stake in this other than to see that our
efforts succeed.  So I believe our numbers are good and achievable.  
     
     Now, what does this mean to an individual American citizen? 
Some will be asked to pay more.  If you're an employer and you aren't
insuring your workers at all, you'll have to pay more.  But if you're
a small business with fewer than 50 employees, you'll get a subsidy. 
If you're a firm that provides only very limited coverage, you may
have to pay more.  But some firms will pay the same or less for more
coverage. 
     
     If you're a young, single person in your 20s and you're already
insured, your rates may go up somewhat because you're going to go
into a big pool with middle-aged people and older people, and we want
to enable people to keep their insurance even when someone in their
family gets sick.  But I think that's fair because when the young get
older, they will benefit from it, first, and secondly, even those who
pay a little more today will benefit four, five, six, seven years
from now by our bringing health care costs closer to inflation. 
     Over the long run, we can all win.  But some will have to pay
more in the short run.  Nevertheless, the vast majority of the
Americans watching this tonight will pay the same or less for health
care coverage that will be the same or better than the coverage they
have tonight.  That is the central reality.  (Applause.)
     
     If you currently get your health insurance through your job,
under our plan you still will.  And for the first time, everybody
will get to choose from among at least three plans to belong to.  If
you're a small business owner who wants to provide health insurance
to you family and your employees, but you can't afford it because the
system is stacked against you, this plan will give you a discount
that will finally make insurance affordable.  If you're already
providing insurance, your rates may well drop because we'll help you
as a small business person join thousands of others to get the same
benefits big corporations get at the same price they get those
benefits.  If you're self-employed, you'll pay less; and you will get
to deduct from your taxes 100 percent of your health care premiums. 
(Applause.)
     
     If you're a large employer, your health care costs won't go up
as fast, so that you will have more money to put into higher wages
and new jobs and to put into the work of being competitive in this
tough global economy.
     
     Now, these, my fellow Americans, are the principles on which I
think we should base our efforts:  security, simplicity, savings,
choice, quality and responsibility.  These are the guiding stars that
we should follow on our journey toward health care reform.
     
     Over the coming months, you'll be bombarded with information
from all kinds of sources.  There will be some who will stoutly
disagree with what I have proposed -- and with all other plans in the
Congress, for that matter.  And some of the arguments will be
genuinely sincere and enlightening.  Others may simply be scare
tactics by those who are motivated by the self-interest they have in
the waste the system now generates, because that waste is providing
jobs, incomes and money for some people.  
     
     I ask you only to think of this when you hear all of these
arguments:  Ask yourself whether the cost of staying on this same
course isn't greater than the cost of change.  And ask yourself when
you hear the arguments whether the arguments are in your interest or
someone else's.  This is something we have got to try to do together.
     
     I want also to say to the representatives in Congress, you have
a special duty to look beyond these arguments.  I ask you instead to
look into the eyes of the sick child who needs care; to think of the
face of the woman who's been told not only that her condition is
malignant, but not covered by her  insurance.  To look at the bottom
lines of the businesses driven to bankruptcy by health care costs. 
To look at the "for sale" signs in front of the homes of families who
have lost everything because of their health care costs. 
     
     I ask you to remember the kind of people I met over the last
year and a half -- the elderly couple in New Hampshire that broke
down and cried because of their shame at having an empty refrigerator
to pay for their drugs; a woman who lost a $50,000-job that she used
to support her six children because her youngest child was so ill
that she couldn't keep health insurance, and the only way to get care
for the child was to get public assistance; a young couple that had a
sick child and could only get insurance from one of the parents'
employers that was a nonprofit corporation with 20 employees, and so
they had to face the question of whether to let this poor person with
a sick child go or raise the premiums of every employee in the firm
by $200.  And on and on and on.  
     
     I know we have differences of opinion, but we are here tonight
in a spirit that is animated by the problems of those people, and by
the sheer knowledge that if we can look into our heart, we will not
be able to say that the greatest nation in the history of the world
is powerless to confront this crisis.  (Applause.)
     
     Our history and our heritage  tell us that we can meet this
challenge.  Everything about America's past tells us we will do it. 
So I say to you, let us write that new chapter in the American story. 
Let us guarantee every American comprehensive health benefits that
can never be taken away.  (Applause.)

     In spite of all the work we've done together and all the
progress we've made, there's still a lot of people who say it would
be an outright miracle if we passed health care reform.  But my
fellow Americans, in a time of change, you have to have miracles. 
And miracles do happen.  I mean, just a few days ago we saw a simple
handshake shatter decades of deadlock in the Middle East.  We've seen
the walls crumble in Berlin and South Africa.  We see the ongoing
brave struggle of the people of Russia to seize freedom and
democracy.  
     
     And now, it is our turn to strike a blow for freedom in this
country.  The freedom of Americans to live without fear that their
own nation's health care system won't be there for them when they
need it.  It's hard to believe that there was once a time in this
century when that kind of fear gripped old age.  When retirement was
nearly synonymous with poverty, and older Americans died in the
street.  That's unthinkable today, because over a half a century ago
Americans had the courage to change -- to create a Social Security
system that ensures that no Americans will be forgotten in their
later years.

     Forty years from now, our grandchildren will also find it
unthinkable that there was a time in this country when hardworking
families lost their homes, their savings, their businesses, lost
everything simply because their children got sick or because they had
to change jobs.  Our grandchildren will find such things unthinkable
tomorrow if we have the courage to change today.  
     
     This is our chance.  This is our journey.  And when our work is
done, we will know that we have answered the call of history and met
the challenge of our time.  
     
     Thank you very much.  And God bless America. (Applause.)     

                          END10:02 P.M. EDT
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