NCPA - National Center for Policy Analysis

Cost Estimate For Patients' Rights Bill

June 23, 1999

The Patients' Bill of Rights Act of 1999 "would significantly change the relationships between employers, health plans, health insurers, providers, and patients," says the Congressional Budget Office. The CBO has issued a new cost estimate for the bill, as modified by its sponsors, Sen. Edward M. Kennedy (D-Mass.) and Sen. Tom Daschle (D-S.D.).

The bill mandates changes in the structure and operation of group health plans and health insurance issuers and would provide members of health plans and insured individuals with new rights to health care services.

  • Modifications to the bill reduced the estimated rise in premiums for employer-sponsored health plans by 1.6 percentage points.
  • When all of the bill's provisions are fully phased in, CBO estimates that premiums would rise by an average of 4.8 percent in the absence of any compensating changes by employers.
  • The direct cost of private-sector mandates in title I of the bill would be about $3 billion in 2000 and would reach about $13 billion in 2004.
  • The costs in 2004 would represent about 3.4 percent of total private-sector health insurance expenditures, although their distribution among health insurance plans would be uneven.

Employers could respond to premium increases in a variety of ways to reduce their impact, says the CBO. They could drop health insurance entirely, reduce the generosity of the benefit package, increase cost-sharing by beneficiaries, or increase the employees's share of the premium.

In addition to requiring both internal and external reviews for appeals of decisions by health plans and insurers, the bill would amend the Employee Retirement Income Security Act (ERISA) to allow individuals to sue health plans and insurers for personal injury or wrongful death under state tort laws.

Source: Congressional Budget Office Cost Estimate, "S. 6 -- Patients' Bill of Rights Act of 1999, as modified by the sponsors," June 16, 1999.


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