Health Insurance Reform
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KWAME HOLMAN: Over the past several years, members of Congress have talked and talked about health care reform, agreed on very little, and succeeded in passing no legislation. Today, however, the Senate bit off just a small portion of the health care debate and unanimously agreed to make changes.
SPOKESPERSON: The ayes are a hundred and the nays are zero. The bill is agreed to.
KWAME HOLMAN: The Health Insurance Bill, which now has been approved by both the Senate and the House, ensures that workers who either lose or leave their jobs can maintain medical coverage. It also prohibits insurers from denying coverage because of preexisting medical conditions. The two sponsors of the bill spoke shortly before the Senate vote.
SEN. EDWARD KENNEDY, (D) Massachusetts: The abusive practices addressed by this bill create endless unnecessary suffering, and it was our attempt to address that unnecessary suffering that we brought focus and language to provide millions of Americans who are today forced to pass up jobs that would improve their standing of living or offer greater opportunities because they are afraid they will lose their health insurance a new sense of hope in the work place.
SEN. NANCY KASSEBAUM, (R) Kansas: Whether it only helps 10 million people or it helps 50 million people, the important part of it is it does provide some peace of mind for those who desperately want to have some assurance that if they lose their job or change their job, if they have had insurance that had covered, umm, a preexisting condition, they won’t be excluded from that coverage.
KWAME HOLMAN: However, the Senate and House now must reconcile two major differences between their respective bills. The Senate bill requires insurance companies to offer the same coverage for mental illness as they do for physical illness, a provision not included in the House bill. The House bill permits a limited amount of tax deductible savings, so-called medical savings accounts, to pay medical expenses. The Senate rejected that provision. But House Majority Leader Dick Armey says the House won’t accept a health insurance bill if it doesn’t include a provision for medical savings accounts. President Clinton has indicated he’ll veto the bill if it does.
MARGARET WARNER: For more now on the Health Insurance Bill and its prospects, we’re joined by Julie Rovner, who’s covering the issue for “Congress Daily,” a newsletter published by the National Journal. Hi, Julie. First of all, tell me, after all of the battles over health care reform in 1994 that led to nothing, why the unanimity today?
JULIE ROVNER, Congress Daily: Oh, I think Congress has wanted to do something about health reform even in 1993 and 1994, when they couldn’t agree on what. They–certainly the American public had been sort of raised to this fever pitch that the health insurance system is sick. Something needs to be done. The idea was that they could find something that they could agree on, and I think everyone wanted to jump on that band wagon.
MARGARET WARNER: All right. Let’s look at the two things that are common, the two most important things common to both the House and the Senate bills. And the first is the so-called portability. How portable would one’s health insurance really be?
JULIE ROVNER: Well, this has been sort of misunderstood. Most people think of portability that if they change jobs, they’d be able to take the insurance they have now to a new job with them. That’s not what this would do. It would simply ensure that they would be able to get coverage if they left a job, went to another job where coverage was offered, they would be able to get coverage at that new job. They wouldn’t be allowed to be excluded because they or a member of their family had a preexisting condition, some sort of an illness.
MARGARET WARNER: And what if they lost their job but didn’t immediately go to a new job, or didn’t find a new job, or became self-employed?
JULIE ROVNER: Well, there are some provisions in both bills that would seek to address that, but they don’t go very far. Both of them would seek to ensure that the insurers would have to offer people individual coverage, but they don’t really say anything about the price. And this is one of the key problems with the bill, and one of the reasons the health insurance industry is a little bit uncertain about it. If they had to offer it to people with preexisting conditions, people who are already sick or likely to use health insurance, then that would raise costs for everyone else in the individual market, which is already a fairly small, very price-sensitive market. What may happen is that they’ll offer it to these people, but it would be at a price that these people couldn’t afford. So basically you’re either going to not help the people who need the help, or you’re going to hurt other people who are already in that market.
MARGARET WARNER: Now, how would this other provision about preexisting conditions actually work? What kind of protections would it give that, that a worker doesn’t have today?
JULIE ROVNER: It basically would say to the insurance industry that you may not do this anymore. What happened during the 1980s when health prices were skyrocketing, insurers began, as they say, rather than manage risk, they began to exclude risk. If they thought you were likely to use your health insurance, they would simply not cover you. In some cases, they simply chose not to cover entire lines of businesses, certain workers. Ironically, among those who had been red-lined out of insurance were doctors offices, who found themselves unable to get insurance. The insurers thought they knew too much; they would be likely to use too many services. This basically says you may not do that anymore. That’s a remarkable step for the Congress. This is a major effort by the federal government to regulate insurance, which is something that previously had been left to the states.
MARGARET WARNER: But as you said earlier, but with no cap on what they can charge?
JULIE ROVNER: No. That would still be, be left to the states. Now one of the reasons that even some of the Republicans say the federal government needs to step in here is because so many workers are now in what we call self-insured plans, where the company, rather than buying insurance, says we’ll simply pay all of our workers’ costs ourselves. Well, for, for complicated reasons, those plans, the self-insured plans, are exempt from state regulations, so the states can’t regulate them. The only ones who can step in and say this is the federal government. That’s basically more than half the workers that we’re talking about.
MARGARET WARNER: Okay. Now turning now to a couple of points of dispute between the two bills, the medical savings account. In the Senate bill, not in the House–excuse me–yes, in the House bill, not in the Senate bill, why are these so controversial?
JULIE ROVNER: Well, they’ve become a real philosophical point of division between Democrats and Republicans on what otherwise is a very bipartisan feeling about this bill. The Republicans are very fond of medical savings accounts. They say that it gets consumers more power, that it would encourage people to go out, using their own money to basically bargain down prices on health care. This is something they feel very strongly about. Democrats vehemently oppose medical savings accounts, most Democrats. There are some who support them. They argue basically on the individual level, the people who have them, if they’re spending their own money, they’ll be less likely to go and get needed preventive care. They’ll be more likely to say, well, this is my money, I’d rather keep it. On a systemwide basis, they’re worried that the people who are most likely to stay healthy and, therefore, be able to keep this money are the most likely to go into the medical savings account. That will leave behind in the regular insurance pool only the people who are sick, thereby driving premiums up for everyone else in the rest of the system.
MARGARET WARNER: And then the other major difference has to do with whether how mental health coverage was covered. And the Senate was very generous in that. Again, why–how is that going to work, and what’s the argument against that?
JULIE ROVNER: Well, this was a big surprise. I think no one, including the sponsors of this amendment, Sen. Domenici and Sen. Wellstone, actually expected it to pass. They said earlier in the day that they’d be happy if they got a strong vote. This basically said that you cannot, that insurers cannot put more limits on mental health coverage than they do on physical health coverage. The business community is very unhappy about this. They say it will be very expensive, could increase health insurance costs for everyone by up to 10 percent, and one of them called it a bottomless pit. This was not dealt with in the House bill. It’s–I suspect it’s unlikely to emerge from conference because it would basically shatter the coalition that we have now that–where basically you have medical groups, consumer groups, business groups, and even most insurance groups backing this bill.
MARGARET WARNER: What do you think are the prospects for conference now in this bill?
JULIE ROVNER: Well, this has become kind of a high stakes political game of chicken. The Republicans really want to keep medical savings accounts. The President really wants them to come out. We’re going to go into conference and basically see who blinks.
MARGARET WARNER: And finally, very briefly, this bill is still being criticized from both the right and the left. What is the nature of that criticism?
JULIE ROVNER: Well, this is the problem inherently with trying to do health insurance incrementally, as we say, on a piecemeal basis. Any time you go in and start tinkering with the insurance market, you’re going to cause some disruptions. In this case, what we’re basically saying or what Congress is basically saying is that they think that people ought not be excluded because they’re sick. That will have the result of making sure that more sick people become insured and, therefore, raising the cost throughout the insurance pool, and that could, indeed, have ramifications down the line that Congress may be asked to come back and fix later. That was the origin–one critic caused this a Trojan pony of health reform that will lead to more government interference. This was–we’re basically back to where we were several years ago when they wanted to do it incrementally. There were people who said, no, this will have other ramifications, we should try to do it all at once. Now that we’ve seen that we can’t do it all at once, Congress is going back to trying to do it incrementally.
MARGARET WARNER: Well, Julie, thanks very much.