Innovative State Legislators Advance Medical Tourism Bills

Innovative state legislators in West Virginia and Colorado have introduced bills to their respective state legislatures that would offer incentives to state employees to take advantage of the costs savings available through overseas medical care.

In West Virginia, Delegate Ray Canterbury introduced H.B. 4359 in 2006. The bill proposed to establish “a system to reduce the cost of medical care paid by the Public Employees Insurance Agency by providing incentives to covered employees to obtain treatment in low cost foreign health care facilities accredited by the Joint Commission International (JCI)." Chicago-based JCI has accredited over 100 hospitals in 23 countries. Its parent organization, The Joint Commission, evaluates and accredits hospitals in the U.S.

Specifically, the bill offered state employees the following incentives to obtain medical care abroad:

• Waiver of all co-payments and deductible payments;
• Payment of round trip air fares for the covered employee and one companion;
• Lodging expenses in the foreign country for the companion for the length of the treatment or procedure;
• Lodging expenses in the foreign country for the covered employee and the companion for not more than seven days of convalescence after the treatment or procedure;
• Payment to the covered employees hiring agency for seven days of paid sick leave, which are not counted against the employee’s accrued sick leave; and
• Rebate up to 20% of the cost savings directly to the covered employee.

The overseas care option would be offered to employees only when the savings of overseas medical care is greater than or equal to the total cost of the incentives.

Canterbury said the bill was referred to committee, and he is introducing a similar bill this year. The concept is gaining support, with nine sponsors for the bill this year, compared with only three last year.

Regarding the broader health care crisis in America, Canterbury said, “We’ve created a system to subsidize inefficiency. Entitlements drive up the price, and 35 states limit competition. The system operates on cost-plus, rather than competitive pricing.”

In Colorado, Representative Spencer Swalm has introduced a similar bill, HB07-1143. He said he views this bill “not as a panacea, but as a piece of the puzzle.”

Swalm has met with the state personnel director, state actuary, and Great-West Healthcare – the state’s benefit plan administrator – to discuss the concept. Staff could implement an overseas medical care option without the legislation, “but authority to rebate the 20% of savings gives employees an incentive, and is likely to make it more successful,” said Swalm.

Liability is a concern that has been raised. Swalm said that GlobalChoice Healthcare, one of the leading medical travel planners, is working with an American insurance company to address this concern.

Robert Kummer, chief operating officer of GlobalChoice, confirmed that the company is speaking with insurers on this matter, and he expects to have an announcement within two months. “We’re coming up with a standardized way of resolving grievances.”

“It’s just a perception of uncertainty, rather than a real structural risk,” said Kummer, explaining that his firm only does business with JCI-accredited hospitals in countries with well-established legal systems.

The bills introduced by Canterbury and Swalm demonstrate how medical tourism could play a role in the reform of the U.S. health care system.