[Pages S3817-S3826]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

HEALTH INSURANCE REFORM ACT

The PRESIDING OFFICER. Under the previous order, the Senate will now
resume consideration of H.R. 3103, the health insurance reform bill,
which the clerk will report.
The bill clerk read as follows:

A bill (H.R. 3103) to amend the Internal Revenue Code of
1986 to improve portability and continuation of health
insurance coverage in the group and individual markets, to
combat waste, fraud, and abuse in health insurance and health
care delivery, to promote the use of medical savings
accounts, to improve access to long-term-care services and
coverage, to simplify the administration of health insurance,
and for other purposes.

The Senate resumed consideration of the bill.
Mr. THOMPSON. Mr. President, to clarify, the term limits debate will
resume again immediately after the health care vote, is that correct.
The PRESIDING OFFICER. The Senator it correct.
Mr. THOMPSON. We will have a vote on term limits at approximately
3:45.
The PRESIDING OFFICER. The Senator is correct.
Mr. SPECTER. Mr. President, I am pleased to support the Health
Insurance Reform Act of 1995 and want to commend my colleagues, Senator
Kassebaum and Senator Kennedy, for their excellent work on this
important subject. As a cosponsor of this bill, I believe that
enactment of legislation improving health insurance coverage is long
overdue. We owe it to the American people to pass this bill.
The Health Insurance Reform Act represents the type of incremental
health care reform which I have long supported. It targets the problems
with our current health care system while leaving in place a system
that works well for most Americans.
Mr. President, in June 1993, I had my own health problem when a
magnetic resonance imaging machine discovered an intercranial lesion in
my head. I was the beneficiary of the greatest health care delivery
system in the world--the American health care system. That experience
made me ever more aware, knowledgeable of, and sensitive to the subject
than I had been in the past.
There are some who believed health care reform was dead and declared
as much in the fall of 1994 when Congress failed to enact comprehensive
health care reform legislation. I am hopeful that they will be proven
wrong by the enactment of this bill. President Clinton was in error
when he proposed health care by Government mandate and massive
bureaucracy. But anyone who read the repudiation of the Clinton bill as
an excuse to do nothing is equally in error. We still have a great need
to correct the problems in our health care system for the 15.2 percent
or 39.7 million Americans, for whom the system does not work. In my own
State of Pennsylvania, there is even a greater need, because the number
of uninsured under the age of 65 has grown from 10.8 percent to 13.4
percent of the population while we in Congress have done little but
debate the correct approach to take concerning health reform. It is
high time that Congress takes a real step forward in health care
reform, without big government and without turning the best health care
system in the world on its head.
To be sure, health care reform remains a very complex issue for
Congress to address. But it is not so complex that we cannot act on a
bipartisan basis. This is something we should have done years ago.
Sixty-five Democrats and Republicans have agreed to cosponsor a bill
containing policy matters we all agree on, such as the need to limit
exclusions for preexisting conditions and make health insurance more
portable for workers changing jobs. Of course, more can and should be
done. But this is what we can agree on now. We will be helping a great
many people who desperately need these critical changes in law by
acting now.
By way of background, I would note that the legislation before the
Senate today, S. 1028, contains provisions very similar to those
contained in title I of my own health care reform bill, the Health
Assurance Act of 1995,--S. 18--which I introduced on January 4, 1995. I
have heard for years from constituents, friends, and family on how
important it is that we pass basic insurance market reforms to protect
those who are not in perfect health but have some preexisting medical
condition. We all are aware of people who are afraid to leave their
jobs because they have a heart condition or another medical condition
and therefore would be unable to obtain insurance for this problem
outside of their present employer. Under the Kassebaum-Kennedy bill, a
person can be assured that no preexisting condition exclusion can ever
last more than 12 months for conditions discovered in the 6 months
prior to coverage. Equally important, the bill enables those workers
that were covered under a group health insurance plan to reduce this
12-month preexisting condition exclusion for each month they were
covered by a plan. So if an employee with a medical problem is covered
by a plan under her current job for more than 12 months, if she takes a
job elsewhere, she will be covered under the plan of the new employer.

S. 1028 also contains language similar to my legislation which
extends the COBRA health benefits options in a limited manner. S. 1028
specifically extends this option when a former employee or family
member becomes disabled during the initial coverage period, and allows
newborns and adopted children to be covered immediately under a
parent's COBRA policy. Also, S. 1028 provides individuals access to
affordable insurance through purchasing groups, which was also allowed
under S. 18. This and the other elements of S. 1028 will give the 228
million workers who now have insurance the security of knowing that
health coverage options exist if they change jobs, or become unemployed
for a limited period of time.
Mr. President, as my colleagues are aware, I have been advocating
incremental health care reform in one form or another throughout my 15
years in the Senate, and have introduced and cosponsored numerous bills
concerning health care in our country since 1983. In my first term, I
sponsored the Health Care Cost Containment Act of 1983, S. 2051, which
would have granted a limited antitrust exemption to health insurers,
permitting them to engage in certain activities aimed at curtailing
then escalating health-care

[[Page S3818]]

costs. In 1985, I introduced the Community Based Disease Prevention and
Health Promotion Projects Act of 1985, S. 1873, directed at reducing
the human tragedy of low birthweight babies and infant mortality.
During the 102d Congress, I again pressed for Senate action on this
issue. On July 29, 1992, I offered an amendment to legislation pending
on the Senate floor that would have increased the deductibility for
health care insurance purchased by self-employed persons from 25 to 100
percent, and would have made health coverage more affordable for small
businesses through insurance market reforms. This amendment included
provisions from legislation introduced by Senator Chafee, which I
cosponsored, and which was previously proposed by Senators Bentsen and
Durenberger. My amendment was defeated on a procedural motion by a vote
of 35 to 60 along party lines, and the Senate did not consider
comprehensive health care legislation during the balance of the 102d
Congress. The substance of that amendment, however, was adopted later
by the Senate on September 23, 1992 as an amendment to H.R. 11, the
broader tax legislation introduced by Senators Bentsen and Durenberger
and which I cosponsored. This latter amendment, which included
substantially the same self-employed deductibility and small group
reforms that I had proposed on July 29, passed the Senate by voice
vote. Unfortunately, these provisions were later dropped from H.R. 11
in the House-Senate conference.
On August 12, 1992, I introduced legislation entitled the ``Health
Care Affordability and Quality Improvement Act of 1992,'' S. 3176, that
would have enhanced informed individual choice regarding health care
services by providing certain information to health care recipients,
lowered the cost of health care through use of the most appropriate
provider, and improved the quality of health care.
On January 21, 1993, the first day of the 103d Congress, I introduced
comprehensive health care legislation entitled the ``Comprehensive
Health Care Act of 1993,'' S. 18. This legislation was comprised of
reform initiatives that would have improved both access to and
the affordability of insurance coverage, and would have implemented
systemic changes to lower the escalating cost of care in this country.

On March 23, 1993, I introduced the Comprehensive Access and
Affordability Health Care Act of 1993, S. 631, which was a composite of
health care legislation introduced by Senators Cohen, Kassebaum, Bond,
and McCain, as well as my bill, S. 18. I introduced this legislation in
an attempt to move ahead on the consideration of health care
legislation and provide a critical mass as a starting point. On April
28, 1993, I proposed this bill as an amendment to the legislation then
pending on the Senate floor, the Department of Environment Act, S. 171,
in an attempt to urge the Senate to act on health care reform. My
amendment was tabled by a vote of 65 to 33, largely along party lines.
As I mentioned earlier, on January 4, 1995, I introduced S. 18, the
Health Assurance Act of 1995, which improved upon many provisions
included in my health care legislation from the 103d Congress and
provided a framework for targeted reform that could be built upon if
needed. In addition to addressing the portability issue, S. 18 has
three other important objectives: First, to provide affordable health
insurance for the 40 million Americans now not covered; second, to
reduce health care costs for all Americans; and third, to improve
coverage for underinsured individuals and families. All of these
objectives are accomplished through initiatives that our health care
system could readily adopt without creating an enormous new
bureaucracy.
In total, I have come to the Senate floor on 14 occasions over the
past 4 years to urge the Senate to address health care reform. As early
as June 26, 1984, I stated that the issue of health care is one of the
most important matters facing the Nation today. That statement
continues to ring true today, nearly 12 years later. According to the
Health Care Financing Administration, national health expenditures
totaled an estimated $949.4 billion in 1994, representing 13.7 percent
of GDP. The Congressional Budget Office [CBO] projected that national
health expenditures will total an estimated $1 trillion for 1995, or
14.1 percent of GDP. According to CBO, spending for health care grew
about 6 percent in 1994, and was expected to grow about 7 percent in
1995.
I believe we have learned a great deal about our health care system
and what the American people are willing to accept from the Federal
Government as a result of debate over President Clinton's proposal in
the fall of 1994. The message we heard loudest was that Congress was
acting too hastily, and that Americans did not want a massive overhaul
of the health care system. Instead, our constituents want Congress to
proceed more slowly and to target what isn't working in the health care
system while leaving in place what is working.
As I have said both publicly and privately, I was willing to
cooperate with President Clinton in solving the problems facing the
country. However, there were many important areas where I differed with
the President's approach and I did so because I believed they were
proposals that would have been deleterious to my fellow Pennsylvanians,
to the American people, and to our health care system. Most
importantly, I did not support creating a large new government
bureaucracy because I believe that savings should go to health care
services and not bureaucracies.
On this latter issue, I became concerned about the creation of such a
bureaucracy, and asked my staff to review the President's 1,342-page
Health Security Act when it was transmitted to Congress on October 27,
1993. My staff found an increase of 105 new agencies, boards, and
commissions and 47 existing departments, programs, and agencies with
new or expanded jobs. This chart received national attention after
being used by Senator Bob Dole in his response to the President's State
of the Union address on January 24, 1994. The response to the chart was
tremendous, with more than 12,000 people from across the country
contacting my office for a copy. Numerous groups and associations, such
as United We Stand America, the American Small Business Association,
the National Federation of Republican Women, and the Christian
Coalition, reprinted the chart in their publications amounting to
hundreds of thousands more in distribution.
In addressing our health care problems, let me be clear: In creating
solutions it is imperative that we do so without adversely affecting
the many positive aspects of our health care system which works for 85
percent of all Americans. The pending legislation, the Health Insurance
Reform Act, achieves this objective and should be viewed as the first
step of an incremental approach to health care reform. It is my hope
that we can accomplish some additional health care reforms that are
equally necessary but would also not disrupt our system, such as
increasing the deduction for the health care of the self-employed.
Further, we should continue to pursue other initiatives to help reduce
health care costs and increase the quality of health care that the
majority of this body can agree upon.
The Health Insurance Reform Act of 1995 deserves our strong support
and I urge my colleagues to enact this much-needed legislation.
Mr. KERRY. Mr. President, I want to thank Senators Kassebaum and
Kennedy for their leadership in putting together this bill which the
General Accounting Office [GAO] estimates will help over 21 million
people.
I also want to talk today about a woman from Florence, MA, who wrote
me about her daughter. She supports this bill, she said, because her
daughter has diabetes and the family had a terrible time finding health
insurance that would cover her. In her letter she told me, ``I think
it's immoral for health insurance companies to cut off coverage even
while the people they cover are paying their premiums. No health
insurance company should have the power to do this to their clients.''
Millions of Americans have medical histories or preexisting
conditions that make it difficult to get comprehensive insurance
coverage. As many as 81 million Americans have preexisting medical
conditions that could affect their insurability. Many people are locked
in their jobs because they fear they will be unable to obtain
comprehensive insurance in new jobs. And many people

[[Page S3819]]

who work in small businesses often have trouble getting insurance
especially if one employee has medical problems.
I am hopeful that this important bill will pass Congress and will be
enacted into law this year. It is time that we help the American people
get the health insurance they rightfully deserve.
This bill takes very important steps forward. But we must do more, so
that ultimately we have coverage for all Americans. Currently, 40
million Americans live without health insurance, and 23 million of the
40 million are workers, according to a study by the Tulane University
School of Public Health. Furthermore, an average of more than 1 million
children a year have been losing private health insurance since 1987.
In Massachusetts alone, there are more than 130,000 children--one-tenth
of all the children in my State--who are without any health insurance,
private or public, for the entire year. And many more children lack
health insurance for part of the year. A recent study in the Journal of
the American Medical Association reported that almost one-quarter of
U.S. 3-year-olds in 1991 lacked health insurance for at least a month
during their first three years, and almost 60 percent of those lacked
insurance for 6 or more months.
Mr. President, this Congress has an unacceptable record when it comes
to addressing the real needs of American workers and families.
Political divisions and Presidential politics have become an everyday
feature of Senate floor action, making it impossible for us to do much
of the people's business. This bill still holds the promise of being a
notable exception.
I applaud the vision, commitment, and political savvy of the
distinguished chairman of the Labor and Human Resources Committee,
Senator Kassebaum, whom I greatly admire, and the distinguished ranking
member of that committee who is the senior Senator from my State. They
have crafted a bill which will provide real help to meet the needs of
real Americans, and have brought it to the Senate in a form that can
become law. I urge all my colleagues to vote for this bill and the
conferees to speedily send it to the President's desk for his
signature. I will proudly vote for passage this afternoon.
Mr. HEFLIN. Mr. President, for the past 5 years, the issue of health
care reform has been at the top of our national agenda. The need for an
overhaul in our health care delivery system was a centerpiece of
President Clinton's campaign, and our inability to enact comprehensive
reform legislation 2 years ago was a profound disappointment.
The debate on the size and scope of the Federal budget and on various
items within the so-called Contract With America have dominated
congressional business for much of the last year and a half.
Nevertheless, there remains a firm national consensus that something
must be done to reform the health care system.
In light of all the money spent on the provision of health care in
this Nation, it is surprising that we have not already found a way to
deliver a sufficient level of care to the millions of citizens who do
not have health insurance. The Department of Health and Human Services
estimates that between 32 and 37 million Americans have no health
insurance, and an additional 50 to 60 million are underinsured. As
translated by the Office of Management and Budget, a total of 13
percent of all Americans are completely uninsured, with as many as 28
percent without insurance for 1 month or more. The Labor Department
reports that each year, one million people lose their health insurance.
As currently structured, the private health insurance market provides
an insufficient level of coverage for individuals and families with
major health problems and makes it difficult for employers to obtain
adequate coverage for their employees. This is especially true of small
businesses.
The bill before us--S. 1028, The Health Insurance Reform Act--will
reduce many of the existing barriers to obtaining insurance coverage by
making it easier for people who change jobs or lose their jobs to
maintain adequate coverage. It will also provide increased purchasing
power to small businesses and individuals. I am proud to support this
legislation, which is aimed at covering millions of those who do not
have insurance or who have an inadequate level by addressing the issues
of portability and preexisting conditions.
S. 1028 builds upon innovative and successful State reforms and
enhances the private market by requiring health plans to compete based
on quality, price, and service instead of refusing to offer coverage to
those who are in poor health and need it the most. Passage of this
measure is being called a relatively modest first step toward the kind
of comprehensive reform legislation we tried to pass in 1994. I agree
that it is only a first step, but feel instead that it is a rather
major first step in that it goes a long way toward reaching the goal of
universal health care.
The General Accounting Office estimates that enactment of S. 1028
would help at least 25 million Americans each year. This would be a
major step in the right direction. It would also provide much-needed
momentum for future reform efforts. Equally important, it would not
increase Federal spending, impose new or expensive requirements on
individuals, employers, or States, or create new Federal layers of
bureaucracy.
This measure enjoys wide bipartisan support in Congress and from a
host of organizations, including the National Association of
Manufacturers, the U.S. Chamber of Commerce, the National Governors
Association, the American Medical Association, the American Hospital
Association, Independent Insurance Agents of America, and the
Consortium for Citizens with Disabilities.
Specifically, the bill does the following: Limits exclusions for
preexisting conditions; guarantees insurance availability; guarantees
renewability; ensures portability; and allows small employers and
individuals to increase their purchasing power by negotiating for more
competitive rates with health plans and providers.
S. 1028 was passed unanimously by the Labor and Human Resources
Committee under the leadership of Senators Kassebaum and Kennedy.
During this year's State-of-the-Union address, President Clinton
challenged Congress to pass it quickly, and described it as the very
least that can be done to help some of those 37 million with inadequate
care or no care at all. It is a sound, targeted, market-based reform
measure that will make it easier for millions of Americans to change
jobs without the fear of losing their health coverage. It is a
consensus-building approach that can lead to comprehensive reform down
the road.
While it is true that this measure does not make all the necessary
changes we need in the health care system, it does make a series of
valuable reforms that will make a discernible difference in the lives
of millions of our citizens. It does this without interfering with
those parts of the system which work and without taking away the
ability of States to implement their own reforms. I congratulate the
bill's managers for their work and the majority leader for scheduling
this debate, and urge its swift passage.
Mr. WARNER. Mr. President, it is a pleasure to rise as a cosponsor of
H.R. 3103, the Health Insurance Reform Act of 1996. Over the last few
years, the Senate has been on a long road on health care reform, and it
is a matter of great satisfaction that we have finally reached this
important milestone.
H.R. 3103, the so-called Kassebaum-Kennedy bill, represents the core
of market-based health insurance reforms on which there has always been
wide agreement. The provisions of H.R. 3103 were, in essence, the heart
of the Republican Health Care Reform bill developed in 1994 as an
alternative to the big-government top-down Clinton health plan.
The 1994 elections, which brought the first Republican majority to
Congress in 40 years, provided a clear indication of the overwhelming
rejection of President Clinton's plan by the American people. More than
any other factor, it was the mandate of the 1994 election which shaped
the policy that has guided this debate.
I cannot praise highly enough the remarkable leadership brought to
this legislation by the chairman of the

[[Page S3820]]

Labor and Human Resources Committee, Senator Nancy Kassebaum of Kansas.
Her careful management has been discreet, thoughtful, responsive, and
thorough. With her partner for the minority in this endeavor, ranking
member Senator Edward Kennedy, they have shepherded a unique bipartisan
measure--devoid of any real controversy--which could in itself extend
health insurance access to an estimated 25 million Americans who, as we
say, have fallen through the cracks of health insurance coverage.
This is not a universal coverage bill. Nor does it prescribe specific
benefits. It does, however, provide the level playing field which the
health insurance industry has long needed to eliminate the 50-State
patchwork of different rules and standards for coverage of preexisting
conditions, portability, and renewability. As insurance companies will
no longer have broad discretion in excluding people from coverage, all
companies will be accomodating the costs of high-risk employees.
When speaking of pre-existing condition problems, I always remember
the case of the young father employed at a lumber mill in northern
Virginia. His wife gave birth to a severely disabled child resulting in
abnormally high costs for his employer's health insurance company. At
the end of the year, that insurance company approached the mill owner
with an impossible choice: If you retain coverage for the disabled
child, your premiums will go up by 150 percent. If you exclude coverage
for the disabled child, your premium will only go up by 12 percent. The
mill owner absolutely could not afford the higher premium and was
forced to drop the young family with the disabled child.
So, here you had a case in which an employee wished to stay with his
company but had to seek coverage elsewhere. Ironically, current
insurance coverage in this country may also cause the reverse:
Individuals who wish to move on to another employer but cannot because
a preexisting condition can preclude future coverage. They are
essentially locked in their jobs for fear of losing their health
insurance.
These examples of discriminatory treatment are precisely what we are
trying to remedy with the Kassebaum-Kennedy bill. The legislation is
good medicine for American health care.
For preexisting conditions, American workers would be required to
comply with a maximum 1 year waiting period for coverage by their
insurance plan. Were there no waiting period, individuals would be
tempted to only purchase health insurance when they or their family
members were ill--a practice which would understandably substantially
undermine the fiscal strength of the insurance industry.

Once the preexisting condition waiting period has been met, and as
long as health insurance premiums are paid up, there should not be a
lapse in coverage if you remain with covered employers.
If you should be required to seek individual rather than group
coverage, the legislation includes important safeguards for the
individual market from the costs of preexisting conditions. One must
first have been in group coverage for a minimum of 18 months and then
fully used and paid for an additional 18 months of COBRA coverage.
Upon meeting these conditions, the individual health insurance market
will be required to offer full benefits without a preexisting condition
clause.
I commend the managers of the bill for their efforts to keep the
legislation as uncluttered as possible with unrelated or controversial
amendments. With the exception of the Dole-Roth Finance Committee
amendment, which I was pleased to cosponsor, the bill has the best
chance of reaching the President's desk if it remains clean.
I regret that the Medical Savings Account [MSA] provision of the
Finance amendment was not retained, but I understand that it might have
prompted a Presidential veto. I did support and have cosponsored in the
past Senator Domenici's successful mental health parity amendment. I
sincerely hope that it too will be retained.
Above all, this legislation must pass. We can not allow this
opportunity to pass us by. These are the vital health insurance reforms
we first learned of in the historic health care debate of the 103d
Congress, and it is our job in the 104th to see the job through.
Mr. President, in closing, I must state that this bill is extremely
significant to me on a personal level.
My father was a physician who cared deeply about his patients,
regardless of their ability to pay. He died when I was only a young
man, but I have always revered his legacy of caring for others. If,
with this bill, we can extend health insurance coverage to 25 million
Americans who now are being denied benefits, my father would be the
first to urge its swift passage.
Mr. BIDEN. Mr. President, when comprehensive health care reform went
down to defeat in 1994, many of us in the Senate were frustrated
because we had let yet another opportunity for reforming the health
care system slip away.
At that time, there was wide agreement on some elements of health
care reform. I, for one, wanted to go forward with those items--even if
they fell short of addressing all of the problems in the health care
system. Unfortunately, political considerations on both sides of the
aisle and at both ends of Pennsylvania Avenue prevented us from passing
even those things we all agreed on.
Today, it appears that cooler heads will prevail. Today, it appears
that the Senate will pass--and I will proudly vote for--the Kassebaum-
Kennedy health insurance reform bill.
Who would have believed less than 2 years ago that we would be on the
verge of passing a bipartisan health care bill. And, who would have
believed that the bill would provide real reform by addressing the most
pressing problem faced by middle-class Americans--the possibility that
they will lose their health insurance just because they change jobs or
get sick.
Four years ago, a national survey showed that nearly one-third of all
Americans had at some time in their lives been the victim of ``job
lock.'' Fearing the loss of health insurance, they stayed in a job they
did not want and did not like. Two years ago, I asked Delawareans that
same question--and in responding to my questionnaire, 21 percent of
Delawareans said they had experienced job lock. Addressing this problem
is long overdue. But, it may finally happen.
With the bipartisan Kassebaum-Kennedy bill, no longer will insurance
companies be able to deny coverage for most pre-existing conditions. No
longer will Americans be locked in jobs they do not want because
changing jobs means losing health insurance. And, no longer will
insurance companies be able to cancel a person's policy just because
they get sick.
Last year, a General Accounting Office study showed that nearly 25
million Americans could benefit from legislation similar to what we are
considering today. It will provide security and peace-of-mind to
millions of middle-class Americans and their families.
Mr. President, the Kassebaum-Kennedy bill also provides some
important help to small businesses--those who have been most devastated
by the rapidly rising costs of health care. First, the bill would
increase the self-employed health insurance tax deduction to 80
percent. I am a cosponsor of legislation to increase the deduction to a
full 100 percent. This bill falls short of that goal, but it continues
to move us in the right direction.
Second, the bill would make it easier for small businesses to join
together to purchase health insurance. By pooling their employees,
small businesses can spread the health risks among a large number of
people and get cheaper insurance rates as a result.
And, third, the bill guarantees that all small businesses will have
health insurance available to them. It prohibits insurance companies
from cherry picking the businesses with the healthiest employees and
refusing to sell to all other businesses. It says, if an insurance
company sells to small businesses, it must sell to all small
businesses. This sounds simple--even unnecessary. But, in the real
world, it is crucial. When just one employee in a small business has a
problem pregnancy, or has a disabled child, or suffers from some other
medical condition, it often means that no one that works in that small
business can get health insurance.
Finally, Mr. President, I want to address the provisions in the bill
regarding health care fraud. This is something I have worked on for 4
years now. In 1992, I introduced legislation to

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crack down on the small number of health care providers who engage in
fraud against their patients, insurance companies, and the American
taxpayers.
Those who perpetrate fraud are few in number, but their crimes are
large in dollars. During a hearing I held in the Judiciary Committee in
1992, it was reported that up to 10 percent of total health care
spending in this country is fraudulent. That is over $100 billion in
health care fraud this year alone.
My bill would have cracked down on these cynical manipulators of the
system by increasing the number of Federal investigators and
prosecutors going after health care fraud; doubling the penalties for
those found guilty; providing rewards for patients and health care
workers who come forward with information about fraud; and making sure
that the guilty make restitution to the victims. My legislation passed
the Senate in 1992 but was never taken up in the House.
A year later, with the leadership of Senator Cohen, health care fraud
provisions were included in the Biden crime bill. But, again, the House
would not go along, and they were dropped during the conference.
Now, they are back again. And, the fraud provisions in the Kassebaum-
Kennedy bill are very similar to the legislation I first introduced in
1992. I want to commend Senator Cohen for his diligence in this area.
But, I wish to note that while the House health care bill also contains
fraud provisions, some of those provisions would actually weaken the
anti-fraud laws. I urge the Senate to insist that they be stripped
during the conference.
Mr. President, despite all of the good about this bill--protecting
Americans from losing their health insurance, helping small businesses,
and cracking down on health care fraud--it will not solve all of
America's health care problems. And, it is not intended to.
The fact that it does not address a whole host of problems--including
comprehensive cost control and the nearly 40 million uninsured
Americans, including 100,000 in Delaware--does not mean these problems
do not exist and should not be addressed. Failing to deal with these
matters may be a weakness of the legislation. But, ironically, it is
also the bill's strength.
Precisely because the bill deals only with the most pressing health
care problems, we have a very real chance of passing a health care
reform bill for the first time in my nearly 24 years in the Senate. We
are on the verge of breaking the gridlock on health care reform.
The fact that it is an incremental--not comprehensive--bill is not a
reason to vote against it. In fact, Mr. President, I would argue that
it is a reason to vote for the bill. By passing the Kassebaum-Kennedy
legislation, we will have made a downpayment on health care reform--
addressing some important problems and helping meet real needs of the
American people. If we show that responsible Government action can
work--and work well--we will have opened the door to possible future
bipartisan agreements to solve other health care issues.
I hope that we will be back to address those issues. But, in the
meantime, I hope that we will not let another opportunity slip away. I
hope that we will pass the Kassebaum-Kennedy bill.
Mr. SMITH. Mr. President, I rise in support of S. 1028, the Health
Insurance Reform Act. This is a good bill that will help millions of
Americans obtain health care.
Today, I would like to discuss four provisions that I believe are
central to meaningful health care reform. For years, I have said that
Congress should pass targeted reforms that take care of these core
issues, and this bill does address three of them. They are: health
insurance portability, full tax deductibility for long term care
insurance, and deductibility of health insurance for the self-employed.
Let me just say for now that we missed a tremendous opportunity to
enact tax deductions for medical savings accounts, or MSA's. I will go
into that issue in more depth later, but I am very disappointed about
its removal from this bill. I can only hope it will prevail in
conference.
Health care reform is a very complicated and sensitive issue. Before
we start restructuring one of the most important sectors of our
economy, we need to study the issue thoroughly. We must make sure we
approach it in the proper manner, and listen to all concerns.
In 1994, I was host to a statewide health care conference that
featured leading policy experts from every facet of the health care
system. I invited doctors, providers, nurses, patients--everyone who
would be impacted by health care reform. From this, everyone who
participated gained a greater understanding of the complexities of our
health care system.
Since that time, I have held citizens' forums to discuss the issue in
each of the 10 counties in New Hampshire. In addition to this outreach,
I also met privately with every interested group to discuss their
specific concerns more deeply.
This is the way to approach this issue--open, public forums, where
all of the interested parties get to voice their concerns and share
their views. I think the lesson of the White House Task Force, which
produced the Clinton reform proposal, is that secret meetings and back
room deals are not the way to approach a critical issue like this.
Congress must act from a position of genuine consideration and
understanding.
The very best part about open forums is that you get a very good
sense of what people want, and don't want. In my experience, I hear
overwhelming opposition to a Clinton-style government-run health care
system. At the same time, I also hear avid support for the four reforms
that I will now discuss.
The first concern is that health insurance should be ``portable.'' I
feel very strongly about this issue, as I know the rest of my
colleagues do. It is of particular concern to individuals who have
preexisting conditions. These are people who are terrified of leaving
their jobs, being fired or laid off, changing their jobs, or starting
their own businesses--because of the risk of becoming uninsured.
The freedom to change jobs, or even to become self-employed, is one
of the cornerstones of our free market economy. When we picture the
America dream, we think of a family, a home, children, a college
education. But, I think a big part of the American dream is finding a
job that you enjoy, one that fits your interests and skills, and
working your way up the ladder of success.
This is not always easy. Some people get lucky early in life. They
find a good employer and work their way up the company ladder. This was
the predominant trend years ago. But for most of us today, the ladder
does not go straight up. An individual works at a job for a while and
finds that it does not suit him. He may not get along with his boss.
Or, maybe he wants to move. Perhaps he wants a larger salary. There are
countless reasons why people change jobs these days, and it is a very
healthy process. In fact, it has been reported that individuals today
hold an average of seven jobs over the course of a lifetime.
I have held a number of different jobs throughout my career: teacher,
real estate broker, public servant. As I think back, I don't know
whether I would have been as comfortable making some of the career
decisions I did if I had to risk losing health coverage for myself and
my family.
The greatest fear that most Americans have in changing jobs is the
fear of losing their health coverage. There is a term for it now: ``Job
Lock.'' It is the one concern that I hear about over and over again at
my citizen forums and constituent meetings.
And, it is a concern that applies to the people in our society who
are the most vulnerable--people who have chronic health problems,
disabilities, injuries, or illnesses. For many of these Americans,
finding and holding a job that fits their abilities and interests is
not an easy task. For many of these people, there are additional issues
related to daily living, caring for children, maintaining a home,
transportation, paying the bills, that are particularly challenging for
them. The last thing they need, on top of all that, is to be denied
health insurance. Most of them have been paying into insurance plans
for their whole lives. Now, because they have left their employer, they
risk losing everything. It is unfair.

[[Page S3822]]

Mr. President, it isn't just the worker who benefits from portability
reform. In the same way that an employee can become unhappy with his
job, sometimes the employer has reasons to let one of his workers go.
These employers face tough decisions. It might be a small business
owner who finds that he can't balance his books without making some
reductions. It is always a tough situation to face, but these are the
economic realities of the business world.
But what if this same small business owner knows that an employee,
perhaps a close friend, has a pre-existing condition of a family member
with one? This employer has a terribly difficult decision on his hands.
He can keep his employee on, just so that the employee can maintain his
health coverage--perhaps risking bankrupting the business--or he can
lay him off and let him go without insurance. Health portability is
probusiness, because it would allow a small business to make those
tough decisions while having the peace-of-mind in knowing that the
employee and his family would not lose their health coverage.
I have said publicly for years that Congress should do something
about portability, and that we do not need socialized medicine to do
it. This bill proves that. My State already has an extensive guarantee
issue law, so the group-to-individual portability provisions would be
superseded by the New Hampshire law. But, frankly, the Kassebaum-
Kennedy portability provisions are much more modest than those enacted
in my State of New Hampshire.
Next, I would like to address the important provision in the bill
that provides for an 80 percent tax deduction for health insurance for
the self-employed.
Mr. President, in discussing the portability provisions, I briefly
touched on the issue of individuals who, for one reason or another,
choose to be a self-employed. Whether it is running a corner store, or
even a family farm, many Americans rely on self-employment for their
survival. Additionally, these are many Americans who, for a variety of
reasons, from physical disability to spending time with their children,
find working at home to be the most appropriate and fulfilling way to
earn their income.
For these self-employed Americans, health insurance can be a very
expensive proposition--so expensive that many choose to go without
coverage. There are three main reasons for this.
The first and most obvious reason is that the self-employed have to
pick up the full cost of the premiums. Most Americans get insurance
through their employer. They pay a portion of the premium, but the best
is paid by their employers. For these Americans, there is a big
incentive to take advantage of this benefit. But the self-employed are
forced to pick up the entire premium. This just goes with the
territory. The reason I am pointing it out is to highlight the fact
that tax deductibility is particularly important for these Americans.
The second reason it is so expensive is that individual insurance is
much more expensive than group insurance. When I say group insurance, I
am generally talking about employer-based insurance.
The reason that group plans are cheaper is because the risk is spread
over a broad group of people, sick people and healthy people. But, due
to the costly nature of individual insurance and the unfavorable tax
situation, healthy individuals are less inclined to buy individual
plans. Many of them simply choose to go uninsured. Consequently,
because there are fewer healthy individuals to spread the risk,
individual insurance is very expensive.
But the primary reason is the tax situation. And this is very easy to
fix. Employers get a 100-percent tax deduction for their contribution
to an employee's health premiums. Earlier their year, we did raise the
self-employed tax deduction to 30 percent. But, I believe that this is
still unfair. It ought to be 100 percent for everyone--employers, self-
employed, and the individual policy buyer whose employer does not offer
health insurance.
This bill raises the deduction for the self-employed insurance
premiums to 80 percent. This will go a long way toward eliminating the
powerful disincentives for self-employed Americans to buy insurance. It
phases the deduction in over 10 years. While I still wish it were 100
percent, and I would like to see it changed right away, this is indeed
progress.
In addition to helping the self-employed, this bill has a provision
that is of great concern to Americans who wish to purchase long-term
care insurance. Just today, I had a constituent visit my office from
the Alzheimer's Association. Among her primary concerns was this
provision to amend the tax code to make long-term care insurance and
expenses tax deductible. I know this disease very well, because my
father-in-law had Alzheimer's, and I know how expensive long-term care
can be.

Health care is important, but for many, such as those with
Alzheimer's disease, it is activities related to daily living that are
the problem. The bill specifically defines these activities to include
``eating, toileting, transferring, bathing, dressing, and continence.''
Under current law, health insurance is tax deductible. But long-term
care insurance gets taxed. This bill would provide the same
deductibility for long-term care that is currently afforded to health
care.
Mr. President, the final provision that I would like to discuss is
not in this bill, and that is the tax deductibility for Medical Savings
Accounts. It was in the Senate Finance Committee's amendment, and it
was in the House bill. Unfortunately, this vital provision was defeated
on the Senate floor by a vote of 52 to 46.
I have discussed the important provisions for self-employed
Americans, and employer-based benefits. But, there is another group of
people who are in desperate need of help, and that is individuals who
are not self-employed, but whose employers do not offer an insurance
plan. Many of them are restaurant workers, farm workers, or other
people who work for a small employer who cannot offer or chooses not to
offer an insurance package.
Under current law, these workers get no tax deduction whatsoever. Not
100 percent, not 30 percent--nothing. It is the same for Americans who
are unemployed.
Huge corporations get a 100-percent tax deduction to subsidize their
employees' insurance premiums--from the CEO on down. But someone living
paycheck to paycheck whose employer can not provide them with
insurance--or someone who is unemployed--gets taxed on the full
premium.
There are provisions in both the House and Senate bills to allow
small businesses join together and form purchasing pools in order to
buy insurance at lower rates. The House provisions were somewhat
stronger than those in the Senate bill. I am confident that the
conferees will work to produce a final version that would greatly
increase the number of small businesses that offer insurance to their
employees.
As helpful as these provisions will be in increasing access to
insurance, there will still be millions of Americans whose employers
don't offer insurance, or who are unemployed. For these Americans,
there is only one provision that would have helped them--and that is
the full tax deductibility for Medical Savings Accounts, or MSA's.
I can't understand why my colleagues would have voted against it. It
will obviously be an important issue in Conference, and I am hopeful
that it will make it into the final package.
Some have suggested that if we include MSA's in the conference report
that it will provoke opposition or even a filibuster by the Democrats.
I find it very hard to accept the proposition that Senators would
filibuster health care portability reform solely on the basis that we
give tax relief for Americans to put money in a savings account for
health expenses.
I believe that MSA's are vital to true health care portability. By
definition, MSA's are the very essence of portability. When we talk
about insurance ``portability'' as it pertains to the underlying
Kassebaum-Kennedy bill, we are using the term figuratively. The
employee isn't really bringing his insurance with him, we are just
providing him the freedom to shift from one plan to another without
being denied coverage.
So, lets take the example of an individual who works for a company
for 20 years, and becomes disabled or ill, and must leave his job and
give up his employer-based health insurance. Under

[[Page S3823]]

the bill, he would be able to buy an individual insurance policy. The
insurers would have to take him. But it says nothing about how much the
insurer could charge.
So, when he goes to the individual insurance company, the company is
going to evaluate him in terms of the health risk that he poses to the
plan. It does not matter if he was insured for 3 years or 30 years, the
insurance company would consider only his current health status in
determining the premium he would pay. Those 30 years of payments mean
nothing to the new insurance company.
The only provision that would allow him to transport at least a
portion of his coverage is the medical savings account [MSA]. MSA's
allow individuals to supplement their insurance policy by investing a
certain amount into a tax-free savings account and using that account
to pay for their predeductible medical expenses. Any money that the
patient has not spent at the end of the year would remain in his
account.

It is portability in its most pure form. Because it stays with the
employee if he change jobs, because it is his account. If he gets
fired, and cannot find a job, he still has the MSA. He could even use
the MSA to pay his insurance premiums while he tries to find a job. If
he moves to a plan that provides a lower level of coverage, he would
still have his MSA money to pay for the uncovered expenses. I feel that
he should get a tax deduction for this account, just like Americans get
for their individual retirement accounts, mortgages, charitable
contributions, and health insurance.
But, there is another reason that MSA's are important to real health
care reform, and that is the increased use of preventive health
services. I really believe that preventive health care is the solution
to many of our health problems.
Most insurance plans have a deductible that people need to meet
before their insurance company pays for coverage. This acts as a built-
in disincentive for individuals to use preventive health services, and
I believe it needs to be at the center of health care reform.
For example, let us say a person has an illness such as diabetes. In
order to avoid major health problems, they need to maintain an adequate
insulin balance, appropriate diet, and so forth. This can become very
costly when the patient must pay for needles, insulin, monitoring
devices, perhaps dietitian services, and other costs. If these services
are not covered, the individual must pay out of pocket. This
discourages the use of preventive health care.
The unfortunate result is major health problems for these people. For
diabetes patients, it might even mean a foot or leg amputation--major
short term and long term costs to the insurer, the individual, and his
family. Of course, add to that the years of pain and hardship that
result from this perhaps preventable situation.
Let me explain why MSA's encourage preventive health care. The three
major issues that result in individuals not getting preventive health
care are: deductibles, copayments, and uncovered or partially covered
services. In these three situations, the individual is forced to come
up with the money on their own, without help from the insurer. In some
cases, this forces the individual to choose between the expenses of
daily life--food, rent, heating bill--and paying for the preventive
health services. Not surprisingly, it is the preventive services that
are often pushed aside.
Millions of Americans believe that managed care, so-called health
maintenance organizations [HMO's], are the solution to cost control and
preventive health care. I would concede that HMO's have done some great
things in controlling health care costs in our country. But HMO's still
leave the issue of uncovered expenses. There is also the problem where
many Americans do not want to join the HMO because they might not be
able to keep going to their family doctor, if the doctor does not
belong to the HMO.
With an MSA, there are no predeductible expenses, no uncovered health
expenses, no copayment as long as the individual still has money in his
MSA. So the disincentives that discourage individuals from obtaining
preventive health care are greatly diminished.
A March 14, 1995, policy analysis done by the Cato Institute
addressed the successes of MSA's in the current system. Even without
the favorable tax treatment, the paper states that in its experience
with MSA's under the current system, Golden Rule Insurance Co.'s
employees increased their use of preventive care.

About 20 percent of the workers with MSAs reported that
they used their MSA funds to pay for a medical service they
would not have bought under the traditional health insurance
policy. That is because the MSA provided the funds at hand
that they could use to pay for such services, whereas the
traditional policy imposed deductible and coinsurance fees
that actually discouraged the use of such services. Moreover,
the traditional policy might not cover some services, and the
uncertainty alone discouraged workers from obtaining
preventive care. But workers know that MSA funds can be used
for whatever services they choose.

So we can philosophize all we want about why it happens, but I like
to look at the hard evidence. When we look at the facts, MSA's increase
the use of preventive care.
Mr. President, recently this issue has somehow become a partisan
issue. Some Democrats have put themselves in the awkward position of
saying that people should have to pay taxes on their predeductible
health care expenses, copayments, prescription drugs, and other
uncovered expenses. They can try to explain that to the voters when the
election comes around.

But, I think it is worthwhile to briefly review the record here,
because historically, this has been a very bipartisan issue, and my
colleagues on the other side should be aware of this before they fall
on their swords over this so-called controversial provision.
I have a series of letters and a television transcript here from
House and Senate Democrats in support of MSA's, including
Representatives Andrew Jacobs, Robert Torricelli, and House Minority
Leader Dick Gephardt, as well as Senators John Breaux, Sam Nunn, and
the distinguished Senate Democratic leader, Senator Daschle. I also
have a letter from the National Mineworkers.
These materials clearly show that MSA's have enjoyed broad bipartisan
support in the past, and I ask unanimous consent that they be printed
in the Record at the conclusion of my remarks.
Mr. President, this bill is not perfect. I am sure all of us have
changes we would make. I know there are a number of provisions that I
would like to see added to the bill. But I am going to vote for it,
because I believe it is a big step in the right direction. After the
failure of the Clinton socialized medicine plan, Republicans said that
we needed a change. We promised Americans that if they gave us a
chance, we would give them a real health reform bill--without Big
Brother, without the ``standard benefits package,'' without rationing
care. We promised them portability and tax relief for the self-
employed, and long-term care. We have made good on our promise to the
American people and I urge my colleagues to support this legislation.
I ask unanimous consent that letters and a television transcript to
which I earlier referred be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Congress of the United States,

Washington, DC, April 17, 1996.
Hon. William J. Clinton,
President, The White House, Washington, DC.
Dear President Clinton: As original co-sponsors of Medical
Savings Accounts (MSA) legislation in the House of
Representatives, we urge your review of and your public
support for this wonderfully innovative idea.
The recent vote on the House Republican plan should not be
used to judge the Democratic Party's position on MSAs. As you
know, MSAs have become a major plank in Congressman
Torricelli's health care platform in his Senate race.
We cannot think of a more Democratic idea than MSAs. In
fact, it was originally our idea. We want Democrats to get
the credit for it. In the Senate, Democrats John Breaux, Tom
Daschle, Sam Nunn and David Boren initiated the idea.
Dick Gephardt included MSA's in the House Democratic
Leadership bill in 1994. There were 28 House Democrats who
cosponsored our initial MSA legislation. There are currently
three Democratic U.S. Senate candidates who have supported
MSA legislation: Dick Durbin, Tim Johnson and, of course, Bob
Torricelli.
You also should know that the current contract of the
United Mine Workers provides its members with MSAs. We do not
believe the UMW qualifies as healthier and

[[Page S3824]]

wealthier than the general population--a charge leveled by
uninformed MSA opponents.
MSAs will hold down health costs and be a boon to lower
income employees, single working mothers, as well as the
lower and middle income employees all across America. With
MSAs, people are rewarded for shopping around and can, in
many cases, for the first time spend first dollar health
insurance dollars (there are no deductibles or co-payments)
on dental care, vision, mammograms, alternative medical
therapies, etc.
Mr. President, we believe MSAs will be a huge benefit to
the American public. MSAs are not a partisan issue. Democrats
supported MSAs in the 102nd and 103rd Congresses and we
support them in this Congress because they are a good idea
that increases access, controls costs and extends options.
Sincerely,
Robert G. Torricelli,
Member of Congress.
Andrew Jacobs, Jr.,
Member of Congress.
____

Congress of the United States,

Washington, DC, March 27, 1996.
Medical Savings Accounts
Dear Democratic Colleague: Many interest groups are
posturing on the health insurance reform issue. A few are to
draw an imaginary line in the sand on Medical Savings
Accounts. Medical Savings Accounts should not be a partisan
issue.
Please note:
1. Democrats were the initial sponsors of MSAs.
2. MSAs passed the House Ways & Means Committee unanimously
in May 1994--when Democrats were in control. Obviously, in
1994, we believed it was part of the solution.
3. MSAs are included as the ``sense of the committee'' in
the Kassebaum-Kennedy bill.
4. MSAs do not favor the young and healthy any more than
optional conventional health insurance in the workplace. MSA
funds can be used for diabetic maintenance testing and other
procedures not generally covered by traditional health
insurance. MSA funds can be used for orthodontia care which
is also not generally covered.
Health insurance reform is too important to allow the
posturing of a few to kill it.
Sincerely,
Andy Jacobs, Jr.
Bill Lipinski.
Glenn Poshard.
____

U.S. Senate,

Washington, DC, September 8, 1992.
Dear Colleague: The United States is faced with a crisis in
health care on two fronts: access and cost control. So far,
most of the proposals before Congress attempt to deal with
access but do not adequately address the more important
factor--cost control. We have introduced legislation that
will begin to get medical spending under control by giving
individual consumers a larger stake in spending decisions.
We have introduced a bill, the Medical Cost Containment Act
of 1992 (S. 2873), which would allow employers to provide
their employees with an annual allowance in a ``Medical Care
Savings Account'' to pay for routine health care needs. This
allowance would not be subject to income tax if used for
qualified medical expenses. Any money not spent out of a
given year's allowance could be kept by the employee in an
account for future medical needs during times of unemployment
or for long term care. In order to protect employees and
their families from catastrophic health care expenses above
the amount in the Medical Care Savings Account, an employer
would be required to purchase a high-deductible catastrophic
insurance policy.
Unlike many standard third party health care coverage
plans, Medical Care Savings Accounts would give consumers in
incentive to monitor spending carefully because to do
otherwise would be wasting their ``own'' money. That is,
money that they would otherwise be able to save in their
account for future needs.
Once a Medical Care Savings Account is established for an
employee, it is fully portable. Money in the account can be
used to continue insurance while an employee is between jobs
or on strike. Recent studies show that at least 50% of the
uninsured are uninsured for four months or less.
Today, even commonly required small dollar deductible
(typically $250 to $500) create a hardship for the
financially stressed individual or family seeking regular,
preventive care services. With Medical Care Savings Accounts,
however, that same individual or family would have this
critical money in their account to pay for the needed
services.
We feel that, while the Medical Care Savings Account
concept does not provide the total solution to the crisis in
health care access, it does begin to address the critical
aspects of increasing costs and utilization by consumers.
We hope that you will join us as cosponsors of this
legislation. If you have any questions please contact us or
have your staff contact Laird Burnett of Senator Breaux's
staff at 4-4623.
Sincerely,
John Breaux.
David Boren.
Tom Daschle.
Richard Lugar.
Dan Coats.
Sam Nunn.
____

[From CNBC's ``Equal Time''--Aug. 2, 1994]

Mary Matalin. You think the Medical Savings Accounts are
going to make it through conference?
Dick Gephardt. Absolutely. This is an idea the Ways and
Means Committee has worked on for three or four years. It's
very popular. A lot of people like that option and I think it
will be in the final bill. I think it's a great option.
____

July 29, 1994.
Hon. Paul Simon,
U.S. Senate, Dirksen Building, Washington, DC.
Dear Senator Simon: An amendment to the Health Care Package
has been offered to add a medical care savings account
provision. The United Mine Workers have a similar provision
in our current contract that is anticipated to produce a
significant savings to our previous insurance. If the
amendment offered is consistent with the objectives of our
contractual health care provisions, the United Mine Workers
in Illinois would support it. The options of utilizing a
medical care savings account may assist in solving the Health
Care problems in this country.
Another concern of our members is the possible taxation of
benefits. Any provisions that allow for taxation of health
care benefits would be totally unacceptable. Over the years,
the United Mine Workers have negotiated a total package for
our members. Advances in wages and other fringe benefits have
suffered because of the high cost of health insurance.
Taxation of health care benefits would be a slap in the face
to the miners in Illinois who agreed to maintaining their
health care in lieu of other benefit increases.
I appreciate your efforts on behalf of our members as well
as all Americans during the health care debate. I believe
that everyone in the United States must be afforded quality
comprehensive health benefits without the fear of losing
these benefits through job loss.
Sincerely,
Dan Reitz,
COMPAC Coordinator, District 12, U.M.W.A.
Mr. KEMPTHORNE. Mr. President, I support the Health Insurance Reform
Act, for the simple reason it will help provide more accessible and
affordable health insurance to more Americans.
The Health Insurance Reform Act helps those who are now unable, for
reasons beyond their control, to buy health insurance. It prevents
insurance companies from denying coverage to individuals with
preexisting conditions, while ensuring that individuals are not able to
take unfair advantage of the system by only purchasing coverage when it
is actually needed. It prevents job-lock by guaranteeing that
individuals who are covered by an employer-sponsored policy will not
lose their coverage by changing jobs. It also allows individuals and
small businesses to join together to purchase insurance, thereby
leveraging their negotiating power to gain better rates and/or
benefits. In addition, the bill makes health care more affordable by
gradually increasing the deductibility of premium costs for the self-
employed to 80 percent--a move which will be of great benefit to the
more than 56,000 self-employed Idahoans. I am also pleased to note the
bill allows for the cost of long-term care insurance and expenses to be
deductible--another of the reforms I have supported since before I
joined the Senate. And the Health Insurance Reform Act achieves all
these goals without unnecessary Federal intrusion into the health care
system.
This bill is the result of the heated and controversial debate over
health care policy 2 years ago. You will recall Congress and the
American public rejected the proposed Government takeover of health
care, but recognized that targeted reforms were needed in health
insurance.
The crisis in health care is that too many people are being denied
health insurance. That is why, 2 years ago I introduced legislation to
address those market reforms on which I knew there was broad agreement.
While the details of my bill differ in many ways from the bill we
passed, I am pleased to note many of the concepts I embraced then--
increasing access to health insurance, portability, renewability, and
an end to preexisting conditions exclusions--are found in the Health
Insurance Reform Act. The American public said they wanted us to keep
the Government out of health care, and to target our health insurance
reforms to the market. With this bill, I can say the Congress listened.
I just had a clear example of why this legislation is needed. An
Idahoan contacted my office last week asking if the Health Insurance
Reform Act would help him. He is currently receiving disability
benefits but would rather be working. His American dream is to start
his own business. But he fears that becoming more productive will

[[Page S3825]]

cause him to lose the Federal benefits which now provide him with his
only access to adequate health care. If he knew that his disability,
his preexisting condition, would not prevent him from gaining access to
health insurance, he could start that business, to provide for himself
and his family without the Federal assistance he does not really want,
anyway.
During the previous Congress many of us had the opportunity to learn
a great deal about the way health care is provided in this Nation. We
saw aspects of the system which worked, and I would point out that the
overwhelming majority of the system works very well, providing most
Americans with the best health care in the world. We also learned about
those aspects which needed some adjustments. And that is what we are
trying to do--not rebuild health care in the United States, but make
appropriate corrections to specific aspects of the system to make it
work even better. Most importantly, we are achieving more affordable
and accessible health care through private sector reforms.
I must, however, express my disappointment with the vote to exclude
medical savings accounts MSA's from this bill. MSA's allow people to
save money, tax free, to cover medical expenses. In cases where an
employer provides health insurance, the employer contributes to the MSA
and, again, these funds are not taxable provided they are used for
medical expenses. When combined with a high-deductible, catastrophic
insurance policy, MSA's provide individuals with low-cost health care
coverage which provides the maximum level of consumer choice and eases
many of the financial concerns which face those who need health care
services. MSA's are the responsible way to increase both accessibility
and affordability in health care coverage.
States are the proving ground for many innovative ideas. Idaho is one
of many States to have enacted MSA legislation in recent years and
numerous Idahoans have expressed their support for MSA's as a health
insurance option. While I believe Idaho, among other States, should be
commended for its efforts on this issue, regrettably, the full benefits
of MSA's will not be discovered until they are recognized by the
Federal Government and given appropriate treatment under the Tax Code.
Once again, the States have shown initiative and it is time for the
Federal Government to get out of the way and give our citizens the
options for which they have asked. As a recent editorial in the Idaho
Statesman noted, The nation loses if medical savings accounts are
stripped out of the final legislation.
The bill is not perfect. Small insurers have shared their views with
me that the provisions related to small group and individual coverage
will actually increase the cost of individual policies, thus adding to
one of the current insurance problems we face--the lack of
affordability. As premium costs increase people will drop out of the
system, leaving us with more uninsured and, with a shrinking market,
even fewer options for those who continue to purchase health insurance
coverage. Obviously, this is not the result for which we are aiming and
addressing these questions should be a priority.
That said, I support the Health Insurance Reform Act because I
believe it steps in the right direction toward increasing accessibility
to health care insurance. Allowing those with preexisting conditions to
get and keep health insurance will help ensure coverage for Americans
unfairly denied access to health insurance. Providing for portability
of health care coverage will help end job-lock and will ensure that
those who have faithfully paid into the system will not suddenly be
dropped from it. And providing for more favorable tax treatment of
insurance premiums for the self-employed, and for long-term care
insurance, will make insurance more affordable for numerous other
Americans. These are significant reforms which I believe all of us
should support, and I urge my colleagues to pass this bill.
Mr. LEVIN. Mr. President, many Americans today, particularly middle-
income working families face the declining purchasing power of their
wages. They are saddled with the high cost of child care, are trying to
get a college education for their children, working to reach the
traditional American dream of home ownership and some security for
their own retirement years. But perhaps most difficult is the struggle
to keep up with the sky-rocketing costs of health care which many are
forced to face without adequate health insurance.
Americans want health insurance which covers all Americans, which is
affordable, protects the quality of their health care, and can never be
taken away. Today, the Senate, I hope, will take a first step in that
direction. This legislation does not address the costs, but takes a
very important step in protecting the availability of health insurance
for many Americans.
I support the legislation before the Senate today. I am pleased to be
a cosponsor of this health insurance reform measure, along with 55 of
my colleagues in the Senate. Although it does not solve and does not
attempt to solve all of the problems of the present system, it does
address some of the most pressing concerns that middle-income Americans
have expressed about the diminishing availability and portability of
health coverage for themselves and their families.
This bill makes important changes that will protect those who
currently lose their insurance coverage because they lose their job or
change jobs. And, it protects those who are unable to attain health
insurance because of a preexisting medical condition, or who now lose
it when they get sick.
One of the consequences of the present health insurance system is
that it creates what is often called ``job lock''; that is workers who
want to change jobs to improve their careers are forced to give up the
opportunity because it means losing their health insurance. A quarter
of all Americans say they have been forced to stay in a job they
otherwise would have left, because they were afraid of losing their
health insurance. This bill ends job lock.
Under the Kennedy-Kassebaum reform bill, exclusion of a preexisting
condition will be limited. Employer-provided health plans will not be
able to limit or deny coverage for new employees for more than a year
because of a medical condition that was diagnosed or treated during the
previous 6 months for employees changing plans. No new limit on
preexisting conditions may then ever be imposed on those who maintain
their coverage, even if they change jobs or their employer changes
insurance companies. Cancellation of policies for employees who
continue to pay their premiums will be prohibited. Employees coverage
can no longer be terminated because they become sick. No employers who
want to buy policies can be turned down because of the health of their
employees.
Mr. President, I am especially pleased with significant improvements
in coverage for pregnant women and newborn children. Under the bill,
pregnancy can no longer be considered a preexisting medical condition
as is presently the case with some health plans. In some such
situations, the mother has no prenatal coverage for pregnancy related
services.
The bill also contains a special enrollment period for change in
family composition. Under this provision, newborns whose parents wish
to enroll them in their group health plan within 30 days of birth may
not be excluded from coverage under a group or individual health plan
during the child's first 12 months of life.
Additionally, as is the case with individuals who are previously
enrolled, children cannot be subject to a preexisting condition
exclusion once the condition has been diagnosed, if the condition was
previously covered. This provision is intended to ensure that children
under the age of 1 are not subjected to new preexisting condition
exclusions when their parents change jobs or health plans simply
because of their age.
Mr. President, this legislation helps real people. It will help Mike
and Elizabeth Gregory of Gains Township, MI. When Mike Gregory was left
jobless due to his company's downsizing, his wife Elizabeth and their
two daughters lost their health coverage. This situation primarily
impacted their youngest child, Danielle, who has cerebral palsy. Only
one of the three plans at Mike's new place of employment offers
insurance that will not limit coverage for Danielle's preexisting
condition, thereby limiting their choice and therefore their selection
of benefits.

[[Page S3826]]

Barbara Barton of Grand Rapids suffers from MS. She was forced to
leave her job in order to reduce the stress that worsened her symptoms,
which included temporary blindness and difficulty walking. Ms. Barton
was forced to wait 6 months to get health coverage, since MS is
classified as a pre-existing condition. Under this bill, she would have
been eligible to move to an individual health insurance plan
immediately.
Fear of losing health coverage for Mr. Al Miller's preexisting
condition prevents his wife from seeking a higher-paying job. The
Millers are from Charlotte, MI. Mr. Miller has MS.
Mr. Michael Peel of Flint recently changed jobs and is covered under
COBRA has a 2-year-old son with a number of physical ailments. He and
his wife are expecting their second child and fear they will not be
able to get coverage under Mr. Peel's new job that does not exclude his
preexisting condition.
Steven West of Nashville, MI, spoke to me about problems he and his
wife Lori have experienced in attaining health insurance coverage for
their son, Jacob. Jacob has multiple birth defects. Steven has been
able to negotiate coverage at his current job, but fears that he is
trapped there by Jacob's needs. Steven has an opportunity to move to a
better job, but has been unable to do so because the health coverage
would not take care of Jacob.
Mr. President, these are just a few real people in my home State of
Michigan who stand to benefit from this legislation, there are
thousands like them. I want to commend my colleagues Senator Kassebaum
and Senator Kennedy for forging a bipartisan approach to addressing
this critical issue. While I would prefer for the Senate to be passing
more far-reaching health reform today, perhaps covering all American
children, for example, I believe this bill is an important step forward
and I urge its enactment.
Mr. MACK. Mr. President, I would like to thank my colleagues for
postponing final passage of the Health Insurance Reform Act until my
return. The legislation which we will pass today is the straightforward
health insurance reform which my constituents have been telling me they
want for many years.
The American people rejected the big-government, big-bureaucracy
social experiment which the Clinton administration developed--in
secrecy, I might add--in 1994. People don't want a one-size-fits-all,
government-controlled health insurance system. Americans won't tolerate
having a Government board deciding for them which procedures are
medically necessary and appropriate. And we know from leading
economists that price controls produce shortages, black markets, and
reduced quality. Therefore, most Americans and those of us who serve
them in Congress rejected the Clinton health care plan.
Two years later, under Republican leadership, we are addressing the
aspects of health insurance reform which most people outside the
beltway want us to address. We will provide portability of health
insurance, which will help put an end to job lock. Insurers will no
longer be able to deny coverage due to preexisting conditions. As a
cancer survivor, I know personally how important this provision of
health insurance reform is to patients.
The legislation ensures guaranteed renewability of policies, with the
exceptions of fraud and nonpayment of premiums. It will help the self-
employed by increasing the deductibility of health insurance premiums.
It facilitates the establishment of voluntary coalitions of small
businesses and individuals to negotiate and purchase health insurance.
Finally, the legislation provides tax incentives for the purchase of
long-term care insurance, and tax-free treatment of accelerated life
insurance benefits for those with chronic or terminal illnesses.
I am especially grateful to Senators Kassebaum and Kennedy for
agreeing to include genetic information in this important legislation.
I cochaired a hearing with Senator Feinstein last September to
examine the issue of genetic information and health insurance. We
listened to patients, researchers, biomedical ethics experts, consumer
advocates, and others who made the case that Congress must address this
complex issue now.
Why now? Because the scientific data and technology for genetic
testing are here; but the social, ethical, and legal ramifications have
only begun to resonate beyond the scientific community. Put another
way: The science of human genetics research is on the Concorde. Yet the
legal, social, and ethical debate about how to handle the information
in our society has been stuck at Kitty Hawk trying to get off the
ground.
This legislation takes an important first step by clarifying that
employer-based plans cannot deny coverage, or charge higher premiums,
to individual employees based upon their health status, including
health status based upon genetic information. While this may not have
significant implications today, it certainly will by the end of the
decade when international scientists complete the mapping of the entire
human genome.
There is still more which needs to be accomplished in this area, such
as ensuring the privacy of medical records and prohibiting employment
discrimination based upon an applicant's genetic information. Senator
Hatfield, Senator Feinstein, and I look forward to working with our
colleagues to enact our legislation to address these concerns.
Today is an historic moment in our Nation's history. We will ensure
that all Americans have access to health insurance coverage while
maintaining the freedom to choose providers and benefits. We will
preserve our system with the highest quality of care and continue to
foster research, innovation, and competition. We will provide employers
with the positive incentives to provide health insurance coverage for
their employees, and provide tax equity for the self-employed to
acquire insurance for themselves and their families.
All of this will be accomplished under the system which has served as
the bedrock of every great stride our Nation has made--not through
higher taxes, more Government, and more bureaucracy, but rather through
free markets and free choice.
Mr. THOMPSON. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. INHOFE. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. INHOFE. Mr. President, I ask unanimous consent I be allowed to
speak briefly as if in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.

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