To Your Health
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CHARLAYNE HUNTER-GAULT: The new law is one of the few bipartisan achievements of Congress this year and will affect the insurance coverage of millions of Americans, particularly as they move from job to job. President Clinton spoke at the signing ceremony this afternoon.
PRESIDENT CLINTON: The Health Insurance Portability and Accountability Act shows what happens as Sen. Kassebaum said and Sen. Kennedy said when we work together, when we cross party lines and put the interest of the American people first. This bill is a clear boost to our values as Americans. It offers opportunity by allowing people to take their health insurance from job to job. It rewards responsibility by helping people to work who desperately want to work. It brings us together in a common community to do what’s right by all of our people, saying that we ought to make it possible for more and more people to succeed at work without losing the security of knowing that when they heed health care it’ll be there.
Health care reform is measured by how many lives it improves. With this bill, we take a long step toward the kind of health care reform our nation needs. It seals the cracks that swallow as many as 25 million Americans who can’t get insurance or who fear they’ll lose it. Now they’re going to be protected. Never has such a measure been more needed for our people. Our new economy presents Americans with opportunities like never before to work their way into better paying jobs.
And yet, our health care system has worked to paralyze many workers who fear losing their health care coverage if they take those better jobs and change their employers. At the same time, millions of Americans find themselves labeled as people with preexisting conditions from cancer to AIDS, which disqualifies them and their families for coverage, including the husband, the pregnant wife, who lose their insurance, the young woman who can’t change jobs because her new insurance doesn’t cover diabetes, the small business owner who faithfully pays group health insurance premiums for years, then finds that his coverage won’t be renewed because one of his employees has developed a heart condition.
No more. This bill changes all that. Today we declare a victory for millions of Americans and their families. No longer will you live in fear of losing your health insurance because of the state of your health. (applause) No longer need you hesitate about taking a better job because you’re afraid to lose your coverage and no longer will small businesses be denied access to insurance for their employees. The health insurance reform bill I signed today will protect the health care of millions of working Americans and give them and their families something that cannot be measured, peace of mind. The bill also addresses other problems of getting more affordable insurance to our workers. It makes it easier and less expensive for the self-employed to purchase their insurance.
As Sen. Kassebaum said, it phases in a tax deduction of 80 percent for the self-employed and helps to even the playing field with bigger businesses.
Second, it prevents fraud and abuse. It toughens penalties and helps us to go after bad apple health care providers who built the system of millions of billions of dollars for Medicare, Medicaid, and from private insurance companies.
Third, it makes the health care system more simple. It will modernize, streamline, and cut the cost of insurance paper work by devising a uniform electronic system for paying health care claims. It will provide steps to protect the privacy of people in this system as it does so.
Fourth, it allows the establishment of a limited number of medical savings accounts, to allow us to study this approach and see how it works, to determine whether this new approach can make a positive contribution to health care coverage and to affordability, and fifth, it helps with long-term care. It provides consumer protections and makes long-term care insurance more affordable. This bill, in short, does a very great deal.
CHARLAYNE HUNTER-GAULT: To explain more about what the new bill does we–new law that is–we turn to Julie Rovner, who covers health policy for “Congress Daily” and the “Lancet,” a British medical journal. Thank you for joining us. This is a far cry from the President’s sweeping health insurance bill he tried to get through. Exactly what is the significance of it?
JULIE ROVNER, Congress Daily: Well, it’s more significant than I think it’s being given credit for. Obviously, in comparison to what we were talking about two years ago, it doesn’t seem to do very much. But if we had done this five or six years ago, people would be saying, my heavens, this is the biggest health insurance change we’ve seen in several generations. And, in fact, it is, so I think it’s been getting sort of a bum rap just in comparison.
CHARLAYNE HUNTER-GAULT: So what is the major significance of it, the major features?
JULIE ROVNER: I think the major thing that this bill tries to do, this law tries to do, is to address the problem of people who don’t have insurance for non-economic reasons, not people who don’t have insurance because they can’t afford it, but people who don’t have insurance because they’ve been denied insurance, or people who are afraid to change jobs because they’re afraid they will be denied insurance when they move to a new job. So it deals with basically insurance discrimination that has grown up in the marketplace really over the last fifteen or twenty years.
CHARLAYNE HUNTER-GAULT: All right. So we’re hearing a lot about portability. Now, explain that and how it works.
JULIE ROVNER: Well, portability is not, as unfortunately a lot of people, including the President, said, being able to take your current health insurance with you to your next job. What portability refers to is being able to move to a new job and get new insurance at the new job, or if you leave a job, if you become unemployed, being able to buy insurance on your own. It may not be the same insurance, it may not have the same benefits, it may not cost the same. It may cost more, but the fact is right now people who leave and change jobs may not be able to get insurance at all if they or a member of their family have a preexisting medical condition.
CHARLAYNE HUNTER-GAULT: Those are the only people who can’t get new insurance if they change jobs–
JULIE ROVNER: Largely. Sometimes there’s no insurance available, but it’s mostly right now the insurance industry has developed what we call the cherry picking mode, where they go out and seek healthy people and they try to exclude bad risks. So people who might–who have a history of even just making a lot of claims and may not even have a chronic disease, may be turned down. This would–it would make illegal those sorts of activities on the parts of insurance companies.
CHARLAYNE HUNTER-GAULT: Mm-hmm. So the greatest beneficiaries, then, would be people who have preexisting conditions and change jobs?
JULIE ROVNER: Yes. Those would clearly be the people who would be most helped, although those are not the only people who would be helped.
CHARLAYNE HUNTER-GAULT: And the President pretty much laid out a series of things that will qualify as preexisting conditions. Do you have anything to add to that, or any examples?
JULIE ROVNER: Well, yeah. Now, we–
CHARLAYNE HUNTER-GAULT: To make it–help make it clear.
JULIE ROVNER: We normally think of preexisting conditions as chronic ailments, diabetes, asthma, cancer. Those are classic, sort of preexisting conditions. But, interestingly, this bill goes a bit further, and it actually makes illegal insurance discrimination on the basis of claims history, as I mentioned, simply the fact that you filed a lot of claims perhaps for many different things, all of which might be self-limiting. It also makes it illegal for investigation to discriminate against people because they have a genetic predisposition to getting a disease. We have now these new, fancy new genetic tests that can tell you that might develop something later in life, and some people are afraid of that information.
They’re afraid to get these tests. They’re afraid if the information got out, that they would then be denied insurance on the basis that they might become sick. This would make that illegal, and it makes illegal denying people insurance on the basis of having a mental illness, which has really not been illegal before.
CHARLAYNE HUNTER-GAULT: A mental illness.
JULIE ROVNER: That’s right.
CHARLAYNE HUNTER-GAULT: But I thought that mental illness wasn’t covered, that that was one of the big problems?
JULIE ROVNER: The mental illness parity provision, now there was a provision that passed the Senate that would require insurers to offer the same coverage basically for mental illness that they do for physical illness. Right now, most insurers and employers offer lesser benefits for mental illness. That was dropped, and Sen. Kassebaum has promised to have hearings on a separate bill that’s been introduced, but she said this afternoon that she didn’t think they would likely get through that this year. But there is, indeed, a provision in this that makes illegal discriminating against giving someone insurance on the basis that they have a mental illness, so there’s something for people with mental illness but not what they wanted or nor what passed the Senate.
CHARLAYNE HUNTER-GAULT: All right. Now, tell us about small business and the self-employed.
JULIE ROVNER: Well, basically one of the key provisions of this bill is it has what we call guaranteed issue for a small business, which doesn’t mean a lot to most people. Right now, a lot of small businesses haven’t been able to get insurance, again, for non-economic reasons, not because they can’t afford it, but because insurers simply will not give them policies. In some cases it’s because they may be dangerous occupations. Tree surgeons have had trouble notoriously getting, getting health insurance.
In some cases, doctors offices have had trouble getting health insurance because insurers think they know too much, and they’re likely to use too much care. This would basically make it illegal. They would–insurers would be required to offer policies and importantly to renew those policies. They couldn’t then drop a business if perhaps one person became ill. That was something the President referred to. So they would be not only guaranteed issue to these small businesses but guaranteed renewability. You basically couldn’t be dropped unless you failed to pay the premiums, or unless you were guilty of fraud.
CHARLAYNE HUNTER-GAULT: Okay. The bill also, as the President mentioned, features provisions about long-term care. Can you briefly tell us about that.
JULIE ROVNER: Yes. This sort of makes a down payment, and I think a lot of people, Democrats and Republican, like to refer to this whole law as a down payment. And the long-term care problem is obviously one that’s been kicking around for a good deal of time with the demographics, as people live longer and are more likely to need long-term care, it is a big problem. This bill basically seeks to make long-term care insurance more affordable by making it tax deductible in the same way that regular medical insurance is tax deductible.
Basically, if your employer offers you long-term care insurance, they wouldn’t have to pay taxes on it. If you buy your own, you would be able to deduct that. It also makes certain long-term care expense is deductible, which they haven’t been. If a doctor says, well, you may need some, you know, homemaker assistance, that’s not technically a medical condition, but if a doctor says this is the difference between you staying in your home or going to a nursing home, that would then become deductible.
CHARLAYNE HUNTER-GAULT: And briefly, medical savings accounts, that’s experimental, right?
JULIE ROVNER: This is what hung the bill up and threatened to have this bill that passed the Congress, as you pointed out, with only two nay votes, almost not happened. They decided to do a four-year demonstration projection. They’ll be allowed to write 750,000 medical savings account policies which will cover about 2 million people, and these basically combine a tax free savings account with a high deductible catastrophic insurance policy. And–
CHARLAYNE HUNTER-GAULT: All right. And just briefly, there are 40 million people now who are not insured that this doesn’t cover. This only covers insured people. Anything on the table for them?
JULIE ROVNER: Well, it’s not necessarily true that it won’t cover any of the 40 million people. In fact, if small businesses who hadn’t been able to get insurance can get insurance, then they might be able to cover some uninsured people. There may be some uninsured people who are the people who are uninsured again because they have a preexisting condition, not because they can’t afford it, would be able to now get insurance. So, so some of those people could, indeed, move off the roles but basically what this bill doesn’t deal with is how much insurance costs. That was too thorny an issue. It’s something that’s traditionally been regulated by the states and something that they decided to leave for another day.
CHARLAYNE HUNTER-GAULT: And all of this goes into effect next year at various times.
JULIE ROVNER: At various times.
CHARLAYNE HUNTER-GAULT: All right. Thank you very much.