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HMO

The system of managed care began in the United States in the early 1900s, in an effort "to provide coordinated health care in a cost-effective way"(Amer. Assoc. of Retired Persons). Until recently," managed care has emerged from the shadows to become the dominant form of health insurance and delivery," succeeding the older fee-for-service program (Zelman and Berenson 2). Today, about 160 million Americans are enrolled in some kind of managed care plan. Managed care "has made health care more affordable andmore accessible for Americans. But sometimes cost cutting can lead to lower standards" (Clinton 1). Because managed care plans provide medical care to their members at a fixed rate, there is a substantial limit to the medical care each member can receive. Under this system of prepayment, managed care organizations (MCOs) can profit off every dollar of revenue that is not directly spent on patient care. This produces the problem of incentives, or temptations for MCOs not to pr!
ovide sufficient medical care to their members, all too often resulting in tragedy (Fox, et al. 56). This problem explicitly impacts the estimated 125 million Americans who receive health insurance through MCOs that are provided by their employers. A federal law known as the Employment Retirement Income Security Act of 1974 (ERISA) governs these self-insured plans. Under the Employment Retirement Income Security Act, ERISA-regulated MCOs are not legally held accountable for their actions. Until Congress passes The Patients' Bill of Rights, MCOs will continually and wrongfully deny patients from quality care. Health costs have continually risen over the last decade. The average-income American family now spends an estimated $5,000 per year on health care alone, an amount that more than doubled from 1988-1996 (Maciejewski). In an effort to relieve working Americans from this burden, Congress devised a federal tax law that would…

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