[THE FOLLOWING IS THE PERIODIC BRIEFING ON HEALTH-CARE REFORM SENT OUT BY THE WHITE HOUSE TO SUPPORTERS OF ITS PROGRAM, INCLUDING ADMINISTRATION OFFICIALS AND OTHERS. IT PROVIDES AN "INSIDE LOOK" AT HOW THE WHITE HOUSE IS PROMOTING ITS PLAN. THESE BRIEFINGS WILL ALWAYS HAVE THE SUBJECT: HEALTH CARE REFORM TODAY , SO YOU MAY EASILY SKIP THEM IF YOU DON'T WISH TO READ THEM. -- Steve Freedkin , LIST.HEALTHPLAN Administrator] The White House Health Care Reform Today January 13, 1994 * Today, William Niskanen, former member of Reagan's Council of Economic Advisers, now at the Cato Institute, and John Lott of Wharton released a letter signed by economists criticizing "price controls" in the Health Security Act. The misleading and inaccurate letter does not criticize universal coverage, employer mandates, or nearly all of the substantive aspects of the plan. Contrary to the letter's false claims, the President's plan relies on premium caps -- not price controls -- to be the back-stop mechanism which controls how fast business and individual premiums can go up each year. * Price controls call for government micro-management of every health care service, drug technology, and product. The President considered, but specifically rejected, a plan imposing price controls on health care. The President's primary strategy for cost containment is private sector competition -- creating the right economic incentives to bring costs in line and encourage health plans to compete on price and quality. * The premium caps are a reinforcement measure to build discipline and certainty into our health care system. If employers are to be told they have the responsibility to contribute to coverage, they deserve the guarantee that their premiums won't rise unchecked and that the federal government will not spend without accountability. * The Congressional Budget Office (CBO) released a report in September of last year which stated a number of necessary ingredients to increase the effectiveness of premium caps in controlling health care costs without adverse effects, such as instituting a standardized benefits package and mandating guaranteed renewal of insurance policies. The Health Security Act includes every one of CBO's suggestions for improving the effectiveness of limits on premium increases. [CBO "Controlling the Rate of Growth of Private Health Insurance Premiums" September, 1993] * There have been concerns raised about what the Health Security Act will do to public employees in New York. Public employees have traditionally enjoyed good health care coverage. Nowhere is that more true than in New York. Under the leadership of Governor Cuomo and others, New York State has recognized that its employees need protection against the high cost of health care through a comprehensive package of health care benefits. Estimates by Governor Cuomo's own advisory committee indicate that New York and New York State will come out winners when Congress enacts the President's health reform proposal which is based on universal coverage and cost containment. Having said that, the Administration respects the views of Governor Cuomo, and we will continue to work closely with him, Senator Moynihan and the entire New York Congressional delegation to make sure the final version of the Health Security Act not only protects existing benefits but also improves them while adding the vital element of security.