|199. FN199. Randall, supra note 99, at
200. FN200. In a society such as ours,
which bases the availability of services and goods on the ability
to pay, a poor person will have limited access to even an
essential service such as health care. Thus, despite having the
world's most technologically advanced health care, the United
States (like South Africa) does not assure its citizenry
universal health care or universal health insurance coverage. See
George Lundberg, National Health Care Reform: An Aura of
Inevitability is Upon Us, 265 JAMA 2566 (1991). The inability to
afford quality health care restricts access both directly-some
people cannot afford the services-and indirectly-some people
cannot afford the supplemental activities which facilitate
accessing the services.
Without sufficient insurance or money for services, access is
limited. The magnitude of the problem is shocking. For the ethnic
American or poor person who has neither health insurance nor
sufficient wages to purchase health insurance or afford adequate
health care, economic barriers are significant. A person may not
be able to afford even a 'small' co-payment.
201. FN201. Economic proposals for
improving access are based on the premise that the primary
barrier to health care is socioeconomic. These proposals discount
race and racism as a barrier to health care. The focus on racial
barriers is not intended to imply that all ethnic Americans are
affected the same. Ethnic Americans are not a homogeneous group.
See Jose E. Becerra et al., Infant Mortality Among Hispanics: A
Portrait of Heterogeneity, 265 JAMA 217 (1991); B. Josea Kramer,
Health and Aging of Urban American Indians, 157 West. J. Med. 281
(1992). Consequently, when considering racial barriers, along
with class and economic barriers, it is important to remember
that the barriers will affect individuals within racial groups
differently. However, race is a separate and independent barrier
that affects not only a person's socioeconomic status, but
institutional behavior and provider behavior as well. Randall,
supra note 79, at 144-46. The racial barriers to health care are
exhibited in barriers to health care facilities, to health care
providers and to discriminatory medical treatment. Id. at 146-60.
When institutional policies and practices have a discriminatory
effect on the access of ethnic Americans to health care and a
discriminatory effect on the quality of medical treatment, then
racism is the problem. Id. at 160-62. Any attempt to reform the
health care system must provide mechanisms to remove racial
barriers to health care. Proposals which focus on socioeconomic
barriers will certainly improve access, but as universal coverage
does does not remove racial barriers, it is inadequate by itself.
202. FN202. See Lundberg, supra note 200,
at 2566-67. We live in a class-based society. The structure,
organization and kinds of health care services delivered
traditionally have focused on the needs of the upper-middle
class. Class barriers manifest themselves when the health care
system organizes and conducts itself based on certain assumptions
about the middle class. For instance, the system assumes that
individuals can take off work to obtain care; individuals can
obtain transportation necessary to seek care; individuals have
access to a telephone to call for appointments for health care or
for authorization to seek health care; individuals haveaccess to
child care; individuals have 'money' to eat 'right,' sleep eight
hours, and clothe themselves adequately; individuals have
knowledge about where to seek health care services. Furthermore,
clinics that serve the poor tend to have long lines and waiting
periods indicating that lower-class individuals' time is less
valuable than that of middle-income individuals. Lower-class
individuals are likely to find all those assumptions to be
barriers to health care services.
In one study, 30% reported inadequate child care as a barrier,
25% reported the lack of a telephone as a barrier, and 31%
reported not knowing where to go as a barrier. Aved et al., supra
note 179, at 495. Transportation problems include the lack of a
car, lack of transportation fare, and the long distance required
to travel to obtain care. Id. Thus, the quality of health care
depends on where the health care provider is located relative to
the patient's residence. Ginzberg & Ostow, supra note 158, at
2559. When health care providers are not located in the
community, patients normally do not use follow-up care. Davidson,
supra note 182, at 154. As one author has noted:
Health care is only one of many concerns of (families and
individuals) . . . . Providing their families (and themselves)
with food, shelter, transportation, day care, and other essential
matters requires the investment of substantial financial
resources and occupies a good deal of time. If inefficient and
understaffed clinics require inordinate amounts of time to
provide simple services, individuals understandably may choose to
forego certain (health care) services . . . to meet other daily
needs . . . .
Gary L. Freed et al., 71 Milbank Q. 32, 79 (1993).
However, the single most significant class barrier to
lower-class individuals in seeking care is locating a provider
willing to serve them. Aved et al., supra note 179, at 497;
Bardack & Thompson, supra note 181, at 161. In one study, 64%
of all women seeking prenatal care reported this as a problem,
and 96% of women who tried to obtain care but were unable to
reported this as a problem. Aved et al., supra note 179, at
497-99. The reasons for refusing to accept patients included
administrative difficulties in obtaining payment from Medicaid
and low Medicaid reimbursement rates. Ginzberg & Ostow, supra
note 158. It also included prevailing negative attitudes of
medical providers toward serving lower class communities. Freed
et al., supra, at 79.
These attitudes reflected feelings that lower-class patients
are difficult to work with, that lower-class patients are
unclean, and that lower-class individuals don't care about their
health. Id. These attitudes were held by 'respected physicians in
some communities and are promulgated through medical societies
and informal networks.' Freed et al., supra, at 79. Furthermore,
the attitude of physicians is contributed to by the failure of
medical schools to train physicians to provide community-based
ambulatory care and to educate physicians to the particular
health needs of ethnic Americans. Bardack & Thompson, supra
note 181. In particular, physicians are not taught to deal
'sensitively and understandingly' with the special problems of
ethnic Americans. Id. In the end, class barriers such as these
will not be removed by providing universal coverage.
203. FN203. By relying on price
competition among providers, the Act segments the market into at
least two tiers. One tier would be composed of lower-income
individuals and families who, because of economics, must join the
least costly plan. The other tier would include everyone else.
Rice et al., supra note 61, at 1359.
204. FN204. Cf. HSA s 1423(d)(B) (The
price of any cost-sharing policy shall take into account any
expected increase in utilization resulting from the purchase of
the policy by the individual).
205. FN205. Rice et al., supra note 61,
at 1357. There is much uncertainty pertaining to the magnitude of
the price elasticity of demand for health insurance, measured as
the percentage of change in the amount of insurance purchased
divided by the percentage of change in premiums. Id.; see, e.g.,
M.A. Morrisey, Price Sensitivity in Health Care: Implications for
Health Care Policy (1992) (Estimates price elasticity as high as
-2.8.); M. Holmer, Tax Policy and the Demand for Health
Insurance, 3 J. Health Econ. 203 (1984) (estimates price
elasticity of -0.16).
206. FN206. In a private discussion with
Lawrence Gostin, he indicated that the economist on the health
care taskforce held this view and that it was a view that
appeared to be winning the day in the design of the health care
207. FN207. Randall, supra note 99, at
208. FN208. Id.
209. FN209. Health insurance policies
insure against the risks of loss occasioned by sickness or
disease. A common provision limits the risk of loss to medical
services, equipment or supplies which are 'medically necessary.'
Annotation, What Services, Equipment or Supplies are 'Medically
Necessary' For Purposes of Coverage under Medical Insurance, 75
A.L.R.4th 763 (1990). If the language employed is unambiguous and
clear about who will make that medically necessary decision, then
there is no occasion for construction. Sarchett v. Blue Shield of
Cal., 729 P.2d 267, (Cal. 1987) (policy unambiguously provided
for impartial review of disputes between insurer and physician as
to medical necessity of hospitalization for which benefits were
claimed, and thus insurer was not precluded from challenging
medical necessity of hospitalization recommended by treating
physician); Strassberg v. Connecticut Gen. Life Ins. Co., 182
A.D.2d 1055, 1056, 583 N.Y.S.2d 48, 48 (3d Dep't 1992) (health
insurer, whose policy provided for coverage of professional
nursing services when 'recommended by a Physician and are
essential for the necessary care and treatment of * * * a
Sickness,' did not reserve to itself the right to make
independent determination on questions of medical necessity).
When the terms are ambiguous, however, then terms are 'strictly
construed against the insurer and in favor of the insured.'
Annotation, supra, at 770.
210. FN210. See supra notes 24-32 and
211. FN211. While the plan requires
reduction for cost sharing, such reductions are limited to
families who are enrolled in Aid for Families with Dependent
Children ('AFDC'), Supplemental Security Income ('SSI'), or have
an adjusted income below 150 percent of the poverty level. HSA s
1371(a). However, no reduction in cost- sharing shall be
available for families if there are sufficient low-cost or
combination plans available. Id. Consequently, reduction of
cost-sharing is limited to low- income individuals who are
enrolled in higher cost plans because of the non-availability of
low-cost or combination plans.
212. FN212. Id. s 1344 (in no case shall
the failure to pay amounts owed result in an individual's or
family's loss of coverage under the Act).
213. FN213. The Act allows for any family
collection shortfall to be included in the family's plan premium.
Id. s 1342(a)(1)(A).
214. FN214. Id. s 1345(d)(2).
215. FN215. Id. s 6101(a).
216. FN216. Id. s 6001 (outlines the
factors to be considered limiting the growth of premiums for the
comprehensive benefit package in regional alliance health plans).
217. FN217. Rice et al., supra note 61,
at 1359 (citing M. Kolodinsky & T. Arnold, Developing a
Sliding Fee Scale for Health Care Insurance in Vermont: The
Calculation of Disposable Income (1989) (families below 200% of
the poverty line have little or no disposable income available
for sliding-scale contributions tohealth insurance premiums));
Holmer, supra note 205 (low-income individuals' price elasticity
estimates for health insurance were twice as high for families
with incomes between $15,000 and $25,000 and six times higher
(-0.39) than for those with incomes of more than $40,000).
218. FN218. HSA s 6104(a)(1), (c)(3). The
amount of the premium discount will be equal to 20% of the
weighted average premium for the health plans offered by the
regional alliance for that family type, reduced (but not below
zero) by the sum of the family obligation amount, and the amount
of any non-required employer payment towards the family share of
premiums. Id. s 6104(b). The discount will be increased if a
family is unable to enroll in an at-or-below- average-cost plan,
but only to such an amount that will allow the family to enroll
in a regional alliance health plan without the need to pay a
family share of premium in excess of an at-or-below-average-cost
As of 1994 this eligibility for discounts applies to dual
parent families with incomes below $22,200; single parent
families with incomes below $18,400; childless married couples
with incomes below $14,600; and single individuals with incomes
below $10,800. The President's Report, supra note 31, at 29.
219. FN219. HSA s 6104(a)(2).
220. FN220. The illusion of services is
significant: patient educational provisions are elective under
the health plan and accompanied by significant co-payments;
mental health services, long-term health care and hospice care
are inadequate; home health care services are severely
time-limited; prosthetic dental devices, adult dental services,
eyeglasses and hearing aids are excluded. Furthermore, virtually
all the services have significant cost-sharing provisions.
221. FN221. HSA s 1322(b)(2)(B)(i).
222. FN222. Id. s 1322(b)(2)(B)(ii).
223. FN223. Id. s 1322(b)(2)(B)(iii).
224. FN224. Id.
225. FN225. See Rice et al., supra note
61, at 1359 (suggesting that 'persons with family incomes below
200% of the federal poverty level are unlikely to be able to
afford premium surcharges' and that '80 million people-32% of the
entire population-will be able to 'choose' only among basic
226. FN226. Rice et al., supra note 61,
at 1359-60. 'Low-income persons are likely to have a difficult
time finding plans in which they can enroll because few plans may
choose to market themselves at the most affordable basic plan
rates.' Id. See M. Merlis, Medicaid Source Book, Congressional
Research Service (1993); M.D. Anderson & P.D. Fox, Lessons
Learned from Medicaid Managed Care Approaches. 6 Health Aff.
227. FN227. See Rice et al., supra note
61, at 1359-60.
228. FN228. See id. (citing a survey
where only 22% of HMOs were participating in the Medicaid program
because of low premiums paid by Medicaid, discontinuous Medicaid
eligibility of enrollees and marketing problems).
229. FN229. See Peggy McNamara, Patchwork
Access: Primary Care in Eds on the Rise, 67 Hosp. 44 (1993)
(explaining that Medicaid patients are often left with nowhere to
seek medical care but the emergency room because of physicians'
refusal to see them); Thomas S. Nesbitt, Access to Obstetric Care
in Rural Areas: Effect on Birth Outcomes, 80 Am. J. Pub. Health
814, 817 (1990); Rice et al., supra note 61, at 1360.
Under the Act physicians are not required to belong to any
particular plan. Consequently, physicians can avoid poor and
ethnic American patients by merely refusing to join plans which
have a large percentage of those patients. Even where physicians
belong to a plan they may still refuse to accept ethnic American
and poor patients. Lundberg, supra note 200, at 2.
230. FN230. HSA s 6001. For example, the
HSA outlines the computation of factors that limit the growth of
premiums for the comprehensive benefit package in regional
alliance health plans. Id.
Plans would also vary in their access to specialty care and
expensive technologies. This difference in access between
basic-premium plans and those that impose a premium surcharge
would perpetuate differences in access to health services based
on socioeconomic status rather than on medical condition and
appropriateness only, continuing fundamental inequities in access
Rice et al., supra note 61, at 1360.
232. FN232. As noted in one report:
at their worst some HMOs make the elderly fight for benefits,
especially those for costly skilled nursing or home care that
plans must provide aspart of the customary Medicare package of
coverage. Some HMOs have dragged out the process so long that
Medicare beneficiaries have died before ever receiving the
nursing care they are legally entitled to.
Byrd & Clayton, supra note 69.
233. FN233. HSA s 6001(c)(1)(A).
234. FN234. Id.
235. FN235. Id.
236. FN236. In fact, the choice feature
of the health care plan may be a sham for all but the wealthy.
Over time, the reform would decimate all but the large corporate
health care entities. Currently, ten insurers control 70% of the
HMO market. Only the larger insurers will have the resources to
develop nationwide networks necessary to serve national
corporations. Such health care networks will force out all other
competition. 'When the Big Three ran the auto industry, they
controlled prices effectively, and no one imagines that compact
health care plans from Japan will ever penetrate (or even be
allowed to enter) this market.' Himmelstein & Woolhandler,
supra note 92, at 4.
237. FN237. Id.
238. FN238. See generally Mark A. Hall
& Gerald F. Anderson, Health Insurers' Assessment of Medical
Necessity, 140 U. Pa. L. Rev. 1637 (1992).
239. FN239. HSA s 1141(a).
240. FN240. Id. ss 1141(a)(2), 1154
(allowing the National Health Board to develop regulations).
241. FN241. Id. ss 1141(a)(1), 5201(e)(3)
(providing notice and disclosure requirements for health care
plan that denies coverage based on a determination that the
treatment is not medically necessary).
242. FN242. Rosenblatt, supra note 4, at
6; see generally Randall, supra note 99, at 28- 29.
243. FN243. Institute of Medicine,
Committee on Utilization Management by Third Parties, Controlling
Costs and Changing Patient Care: The Role of Utilization
Management 1 (Bradford H. Gray & Marilyn J. Field eds., 1989)
(hereinafter, IOM Study); see also, Rosenblatt, supra note 4, at
244. FN244. For example, it has only been
in the last several years that the medical profession has begun
to recognize the significance of testing drugs and treatment
modalities on women and on people of different races. Therefore,
we actually have very little data as it relates to treatment
modalities and the impact of those treatment modalities on anyone
other than white males.
245. FN245. See supra note 79 and
246. FN246. Rosenblatt, supra note 4, at
247. FN247. HSA s 5201(b)(4)(C).
248. FN248. Randall, supra note 99, at
18; Rosenblatt, supra note 4, at 13 (citing Sally Hart and Alfred
J. Chiplin, Proposed Revisions to Health Care Reform Act
(submitted to Office of Health Legislation, HHS)); see also
Bradford H. Gray, The Profit Motive and Patient Care 309 (1991)
(reporting that when utilization review companies determine that
further hospital care is not medically necessary, in almost all
cases, the attending physician will discharge the patient).
249. FN249. In authorizing the
development of practice parameters, the Act outlines certain
requirements, none of which require that guidelines be culturally
relevant or appropriate. HSA s 5006(a)(2).
250. FN250. Managed care plans skimp on
doctors. For instance, they employ one physician for every 800
patients, even though currently, the United States has one
physician for every 400 patients. As more Americans enroll in
managed care plans, non-managed care physicians will find it
impossible to maintain a practice. Himmelstein & Woolhandler,
supra note 92, at 4.
251. FN251. Rice et al., supra note 61,
at 1361 (suggesting that the lower cost plans would be more
likely to contract with physicians who are less experienced and
252. FN252. Assuming that physicians are
rational economic actors, this is common sense. If a physician is
a prominent heart surgeon and the higher cost-sharing plans pays
more per patient for rendering the service than the lower cost-
sharing plans, economically it would be irrational for a
physician not to limit the number of patients from the basic
253. FN253. U.S. Health Reforms: Cliches,
Cost and Mrs. C., 341 Lancet 791, 791 n.5 (1993).
254. FN254. Rice et al., supra note 61,
at 1360. As one author has noted, '(Ethnic Americans and the
poor) will have limited provider networks that may be
geographically inconvenient, provide only the most basic services
required, provide the least choice of physicians and hospitals,
make it difficult to obtain specialist care and new technologies,
and have the least thorough quality assurance programs. We thus
anticipate segmentation of the market for health plans and health
services, with more costly plans providing more accessible and
often better-quality services for their enrollees-in short, a
continuation of two-tier medicine . . . .' Rice et al., supra
note 61, at 1361.