[Congressional Record Volume 142, Number 53 (Tuesday, April 23, 1996)]
[Senate]
[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

[[Page S3821]]

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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