Evening star., 1952-01-10

examine the recent rate in
creases and benefit changes in
the Group disqualification, INC,
plan. This is the first. The
second wiu appear tomorrow.
Group disqualification, Inc, ha:
just passed through a period o1
major adjustment, involving i'm
portant decisions in the volun-
tary prepayment plan which in
sures nearly 100000 Washington
residents against high hospital
bills.
There are two main results:
Some benefits for CHI subscrib-
ers in 1852 will be changed. Sub
scribers' rates will be increased
starting March l, in order to meet
higher costs of hospital care.
Most important of the revisions
for two reasons, is a drastic re-
duction in maternity benefits
scheduled for next, October /.
Flat 50 Daily.
Until that date, maternity pa.
tients now enrolled in CHI viii
continue to have virtually all. o.
their hospital expenses paid b,
their CHI insurance. After Oc.
tober /, CHI will credit a fiat S!
la day. up to a maximum Of eight
days, against their hospital bills
This means, it was indicated BY
a check of hospital charges, thaf
the average CHI maternity patien
will have to pay more than hal
the bill submitted to her for tht
five to six days she will be in thu
hospital.
The second reason the maternity
change is important is that il
represents the first instance II
which CHI has abandoned a pol
icy of paying hospital expenses, NJ
matter how high they are. anc
substituting for it a cash allow
ance against the hospital charges
Some hospital and medical lead.
ers here view this change as a re-
trenchment from the basic prin'
ciples of the voluntary hospita
prepayment (Blue Cross move
ment. One of the major principles
is that cash allowance is no
sufficient to meet the "catastro
phic" hospital costs which can re-
suit in some illnesses.
No Increase Protection.
In addition, advocates of tht
service benefits" plans argue,
cash allowance gives no protection
against rising hospital costs. Fol
example, an allowance of SO a da!
against present bills obviously will
sink in value If hospital charge
go up 10 or 20 per cent.
Maternity cases, however. ART
the only ones which will b.
exempted from GHI's policy O.
paying virtually all the costs O
hospital care. And, in at leas
one other important instance
this principle has been extended
to a new benefit.
Joseph H. Hines, CHI presi
dent, said the maternity chang
was a distasteful action, and wa
arrived at "as a compromise onl!
after very mature study" by th'
CHI board of directors.
The only alternative to the re.
duction, he said, was to increas'
rates to a point that might be tot
high to justify the benefit ant
which, the board feared, woult
place too heavy a burden on low
income subscribers.
The alternatives, he said, wert
brought about by the necessity
for CHI to increase its income
substantially. The higher income
he said, is needed because:
l. CHI estimates that hospita
charges against it will be 20 pei
cent higher in 1852 than the same
charges in 1850. .
Reserve Below Standard.
2. The CHI reserve fund ha:
been reduced during the postwar
period of spiraling hospital cost!
to a point where it is below mini
mum reserve requirements set BY
the Blue Cross Commission fol-
member plans.
During the 1946-l950 period
officials reported, CHI had a tota
income of $17,110,000. against to.
tai expenses of $17,760.000. Oi
the expenses, about $15.8 millior
went to hospitals in direct pay
ment for services given subscrib-
fers.
The deficit during the five years
the officials said, resulted in q
withdrawal of about SCOT 900 from
the reserve fund to meet the ex.
lpenses. Officials estimated thai
at present the fund stands al
labout $3.50, 900. Under Blue Cros.