[Congressional Record Volume 142, Number 57 (Tuesday, April 30, 1996)]
[House]
[Pages H4170-H4172]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          HEALTH CARE REFORM UNDER THE KENNEDY-KASSEBAUM BILL

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from New Jersey [Mr. Pallone] is recognized for 
60 minutes as the designee of the minority leader.
  Mr. PALLONE. Mr. Speaker, this evening I would like to talk about 
health care reform, and particularly the effort that has been put into 
legislation and has been passed now in both houses that was sponsored 
in the Senate by Senators Kassebaum and Kennedy on a bipartisan basis 
and here in the House by the gentlewoman from New Jersey, Congresswoman 
Roukema, who is a Republican, as well as a number of Democrats.
  This reform was essentially put into motion, I believe earlier this 
year, when President Clinton, in his State of the Union Address, called 
upon both the House of Representatives and the Senate to pass the 
Kennedy-Kassebaum bill, as it has come to be called, in order to 
achieve incremental health care reform, particularly as it deals with 
what we call portability; that is the ability for someone to take their 
insurance with them if they change jobs or if they lose their job or 
become self-employed, and also with regard to preexisting conditions.
  As many of my colleagues, I am sure, are aware, right now if one has 
a debilitating condition or some sort of health condition that would 
probably result in a greater amount of health care, many insurance 
companies in many States will simply not provide insurance to such an 
individual, even when they are willing to pay for it.
  So President Clinton, who, as many of us know, was instrumental in 
trying to raise the attention of the American public and the Congress a 
few years ago to the need for health care reform and the need to 
provide more Americans with health insurance coverage, acknowledged in 
his State of the Union Address that although he had not been able to 
achieve a system of universal health care coverage, that did not mean 
that we should not try to move in an incremental way, in a small way, 
toward some health insurance reform.

                              {time}  2015

  He called upon the Congress to pass the Kennedy-Kassebaum bill this 
session and indicated that he would sign it once it passed both the 
House and the Senate. If I could just say very briefly the Kennedy-
Kassebaum bill essentially would make it easier for workers who lose or 
change jobs to buy health coverage, and it would limit the length of 
time that insurers could refuse to cover an applicant's preexisting 
medical problem. Hence, again, the main purpose of it is to increase 
portability for health insurance and to abolish the situation with 
those with preexisting conditions who would not be able to get health 
insurance.
  Now, the Senate last week passed the Kennedy-Kassebaum health 
insurance reform bill unanimously, 100 to 0. Unfortunately, here in the 
House of Representatives, much earlier, a few weeks earlier, perhaps a 
month earlier, we passed a bill that included and added to the Kennedy-
Kassebaum measure a number of controversial provisions that, I believe 
and I think are almost universally recognized, would doom the chances 
of this legislation becoming law.
  Among the special interest provisions in the House bill are the so-
called medical savings accounts, tax-free savings accounts from which 
participants could pay for everything but catastrophic health care 
costs. The problem with such accounts, although they may seem like a 
good idea on their surface, is that they would be a good deal only for 
the healthiest, wealthiest people in our health care system, those who 
do not have the high health care costs that they have to incur on a 
regular basis. But health insurance would increase for the average 
American because insurance companies would be left with only sicker and 
more costly enrollees in their health insurance plans.

  Mr. Speaker, so basically what the medical savings accounts do is 
provide a tax break, if you will, for the healthiest and wealthiest 
among us. That means that by dividing the insurance pool so that the 
healthiest and wealthiest Americans are taken out of the insurance 
pool, which relies on having all types of people in it, would be 
divided. The sicker and the poorer people would remain, which would 
result in the insurance companies having to raise their premiums.
  Most important, though, in terms of what I believe the Republican 
leadership here in the House was trying to accomplish by adding these 
provisions, the medical savings accounts, to the Kennedy-Kassebaum 
bill, was essentially that they were trying to pay off, if you will, or 
provide a financial windfall for the Golden Rule Insurance Company, 
whose top executive has given Republican political committees over $1 
million in contributions in the last 4 years. Now, Democrats in the 
House offered a straightforward health insurance reform bill as a 
substitute for this more controversial bill with these added 
provisions.
  The Democratic substitute would have prohibited many of the current 
unfair insurance practices which fail to protect individuals and 
families with significant health problems and make it difficult for 
small businesses to obtain quality coverage for their employees. The 
Democratic substitute would have made it easier for people who change 
or lose their jobs to maintain adequate health insurance coverage, just 
like the original Kennedy-Kassebaum bill. It also included a provision 
whereby the self-employed could deduct 80 percent of their health 
insurance costs.
  Now, of course, when a bill passes the House and a different bill 
passes the Senate, they have to go to conference, and in the conference 
they come up with an agreement on what bill would finally come back to 
both House of Congress and be considered before it goes to the 
President. What we have to hope is that when this conference occurs 
that the conference committee will drop the controversial House 
provisions and send a bipartisan bill to the House or Senate floor for 
final approval that can pass.
  Mr. Speaker, I wanted to go into, in the time that I have tonight, a 
little more detail about some of the differences between this House and 
the bill and why I believe very strongly that we must bring something 
very similar to the Senate bill, in other words the original Kennedy-
Kassebaum bill, to the floor if we are ever going to see health 
insurance reform this year.
  Let me comment a little bit on the politics, if you will, of the 
Republican leadership in the House basically would

[[Page H4171]]

profit because of the insurer, the Golden Rule Insurance Company that 
has ties with the Republican Party. Again, I do this not because I want 
to say terrible things about the Republican leadership but because I 
hope that by exposing what really is happening here, and that is to 
provide this big windfall to this particular insurance company, we will 
then allow that provision on the medical savings accounts to be dropped 
and will not come to the floor again and will essentially disappear. 
But let me talk to you a little bit about this Golden Rule Insurance 
Company that basically will profit from the medical savings account 
provision.

  Now, this is a health insurance company, as I said, with close 
political and financial ties to Republican leaders, OK? The company, 
the Golden Rule Insurance Company, sells a special type of health 
insurance that would have to be purchased by people with these tax-free 
accounts, the medical savings accounts. Many of the Democrats of course 
have denounced this as bad health policy. Essentially what we are 
saying is that the Republicans are doing this to reward the Golden Rule 
Insurance Company. Its former chairman, J. Patrick Rooney, basically 
his father founded the company. His family still controls it.
  If I could just make some comments about or take some quotations from 
a New York Times article Sunday, April 14 of this year that talked 
about the Golden Rule Insurance Company. I will specifically make 
reference to one of my colleagues, Representative Cynthia McKinney, a 
Democrat of Georgia, who asked on the House floor when this bill came 
up why medical savings accounts were included. She said: You just 
follow the money.
  The Golden Rule Insurance Co. has given more than $1.4 million to the 
GOP, and, coincidentally, Golden Rule just happens to be the premier 
company peddling medical savings accounts. Common Cause, the public 
affairs lobby, said that Mr. Rooney and John M. Whalen, the Golden 
Rule's president, had given more than $117,000 to GOPAC, the political 
action committee that helped Mr. Gingrich take control of the House. 
And Golden Rule, interestingly enough, has resisted efforts by several 
States to require the sale of health insurance to all applicants and to 
limit premium variations.
  Although we are trying to accomplish certain goals with health 
insurance reform here in the House on the Federal level, the bottom 
line is and in many States, including my own State of New Jersey, there 
have been efforts to try to eliminate preexisting conditions as a means 
for health insurance and also to encourage portability. But Golden Rule 
has resisted efforts by several States to require the sale of health 
insurance to all applicants. In fact, when New Hampshire was 
considering such legislation in 1993, State Senator Jean Shaheen, a 
Democrat, issued a news release saying that Golden Rule represents 
everything that is wrong with health care in America. She asserted that 
the company had resorted to lies and half-truths, telling policymakers 
their premiums would soar.
  In Kentucky, another State that was considering this legislation, 
State Representative Ernest Scorzone, a Democrat, said the Golden Rule 
had run a campaign of disinformation, misinformation, and outright 
deception.
  Mr. Speaker, what we are trying to point out is that Golden Rule, not 
only on a Federal level but also on a State level, has not been helpful 
in terms of the whole issue of health care reform, particularly as it 
pertains to the issues of portability and trying to abolish preexisting 
conditions, which are the hallmark, if you will, of the Kennedy-
Kassebaum bill.
  Now, one of the main reasons why I and others are concerned about 
these extra provisions that have been added to the House version of 
this health care reform is because we are totally convinced that these 
additions will imperil any possibility of getting health care reform or 
health insurance reform passed this year.
  I think my colleagues understand that, in order to get something 
passed through the House and the Senate and finally passed by the 
Senate, signed by the President, you have to have a consensus. You have 
to have agreement. If you have some basic provisions, like we are 
trying to make it easier for people to transfer their insurance between 
jobs, or that we do not want preexisting conditions to be a basis for 
whether or not you get coverage, it is fairly easy to get a consensus 
on those provisions in the Kennedy-Kassebaum bill. But if you start 
loading this legislation up with the medical savings accounts, with 
malpractice reforms, with myriad other things, many of which have been 
included in the House version, then you will never get the health 
reform insurance passed in time.

  Mr. Speaker, we only have another probably 6 months before the 
election and the new Congress. This is one thing that we can get passed 
on a bipartisan basis, and we should try to do so. Senator Kassebaum, a 
Republican from Kansas, has repeatedly warned that, if House 
Republicans are successful in getting MSA's, the medical savings 
accounts, approved in the final conference report, the result could 
devastate health insurance. She said, and I quote: ``I would hate to 
see them included by design to a certain extent to take down the 
legislation.''
  Again, we know that, if these controversial provisions are added, 
that there is a real possibility we will not have health care reform 
passed in this Congress. Let me also point out that it was not just the 
medical savings accounts that were added in the House. There were other 
provisions as well. In the New York Times, an editorial just in the 
last week on April 23, 1996, said that there were three unfortunate 
provisions, that the conference committee should strike three 
provisions in the House version, that the conference committee should 
not include if this bill is eventually to become law.
  First, they mentioned it imposes arbitrary caps on financial rewards 
for malpractice suits, thereby protecting doctors from patients who 
have been needlessly disfigured or worse. Whether or not you agree with 
malpractice reform, it should not be in this bill because it makes it 
more difficult for this bill to pass. Second, it would provide a tax 
break for medical savings accounts, and again the New York Times is 
critical of the medical savings accounts because they say that it will 
basically give tax breaks to the wealthy and healthy, divide the 
insurance pool and increase premiums for everyone else.
  The third flaw they mentioned in the House then is a provision to 
encourage small employers to band together into purchasing cooperatives 
that would be allowed to steer clear of chronically ill applicants. The 
Senate bill on the other hand encourages small employers to form 
purchasing cooperatives but under rules that would prohibit 
discrimination. What the New York Times said is the conference 
committee should essentially adopt the Senate bill, and that would 
accomplish a lot because it would make it possible to get this bill 
finally passed.
  Now, lest my colleagues think that we do not have anything to worry 
about and that in fact the conference committee, when it meets, is 
going to report out a clean bill, like the Senate version without the 
medical saving accounts and these other riders that would make it more 
difficult to pass, let me assure you that there are a number of forces 
out there that are working very hard to get the medical savings 
accounts, these tax breaks, if you will, for the healthy and the 
wealthy, included.
  First of all, in today's Wall Street Journal there was an editorial 
that strongly urged Presidential candidate Dole to move ahead and 
insist that the conference include medical savings accounts. He, the 
Republican Presidential candidate, has sworn that he will back MSA's, 
the medical savings accounts, in the health bill. In fact, it has been 
very difficult for the other body to actually appoint conferees to this 
conference committee because the Republican Presidential candidate is 
in fact trying to assure that proponents of medical savings accounts 
are included in larger numbers in the conference committee.

  So clearly, clearly there is an effort not only in the media or 
certain media but also amongst the Republican Presidential candidate 
and his supporters to try to get these medical savings accounts, these 
tax breaks, as I said, for the healthy and the wealthy included in the 
Kennedy-Kassebaum bill which would ultimately make it impossible to 
pass any health care reform.
  Mr. Speaker, I just wanted to point out, if I could, in some of the 
time that

[[Page H4172]]

I have remaining, that for those who say, well, this is only a small 
reform, this does not address the larger issue of affordability for 
health insurance or the fact that so many millions of Americans now 
have no health insurance, well, that is true. And I would be the first 
to recognize the fact that we continue to have a problem with fewer and 
fewer people able to afford health insurance, and as a consequence more 
and more people do not have any health insurance. In fact, the 
Democratic Party, my colleagues on the Democratic side in the House, 
formed a health care task force, which I happen to be one of the 
cochairmen of last year. We put forward a set of Democratic principles 
on health care reform. Our two major principles are that we want to 
achieve more affordable health insurance and we want to expand the 
number of people in this country that have health insurance.
  I would maintain that the Kennedy-Kassebaum bill in its pure form or 
in the form that passed the Senate does help in an incremental way to 
provide more Americans with health insurance, maybe 20, 25 million 
Americans who will be positively impacted by it. So, while we see the 
numbers of people who are uninsured continue to go up, we know that 
this bill, although modest, would help in the effort to try to cover 
more Americans and provide more Americans with health insurance.
  Mr. Speaker, we also know that, if it is passed in its clean form and 
the way the Senate passed it without the medical savings accounts, that 
it certainly would not make health insurance less affordable. If in 
fact you include the medical savings accounts, in fact, that is what 
would happen. Health insurance would become less affordable for the 
average American.

                              {time}  2030

  Just in case, again just to give you an idea about the magnitude of 
the problem that we face in trying to achieve more coverage for 
Americans, just in my own home State of New Jersey within the last 2 
weeks a new report came out, 124-page Healthy New Jersey 2000 report, 
that actually was released last month, and if I could just summarize 
some of the information that shows that the percentage of uninsured New 
Jersey workers, and I am talking about working Americans, working new 
Jerseyans, actually doubled in the last 4 years. This latest report 
statistically shows that 14.6 percent of New Jersey's full-time 
employed workers had no health insurance coverage in 1993, twice the 
percentage that was uninsured in 1989. About 15.5 percent of the 
overall population under the age of 65 was without insurance in 1993, 
working or not, up from 11.7 percent in 1989. That is about 1.1 million 
New Jerseyans. Now, you take that across the country. You will probably 
find about 40 million Americans now who do not have health insurance 
coverage, and the number continues to grow.
  The statistics are even more significant when you look at minorities. 
The rate of insurance coverage is worse for blacks, among whom one in 
five is without coverage, insurance, and for Hispanics, among whom one 
in three is uninsured. And these figures take into account the fact 
that Medicaid covers the poorest families and the disabled, so we are 
primarily talking about working Americans because if you are below a 
certain income, you are eligible for Medicaid. But many people are not, 
and of course those are primarily working people.
  I only mentioned that because again I feel very strongly that even 
though in the Kennedy-Kassebaum bill we are talking about a modest 
effort to try to increase the availability of health insurance to 
Americans, I think even that modest effort needs to be moved forward, 
and it is very wrong for the Republican leadership here in the House of 
Representatives to stop that reform from moving forward just because 
they want to include these medical savings accounts for special 
interests that support them. And even if they honestly believe that 
that is the way to go, they should drop the effort because it is going 
to make it virtually impossible for us to get this health insurance 
reform passed in this session of Congress.
  In conclusion, Mr. Speaker and my colleagues, if I could just say as 
this health insurance reform, as the Kennedy-Kassebaum bill, goes to 
conference, the Republicans need to drop these controversial provisions 
and stop dragging their feet so we can get a bill passed this year, 
this Congress. I urge the House Republican leadership to follow the 
Senate lead and strike the special-interest tax-free accounts for the 
healthy and the wealthy.
  The Republican leadership needs to quit stalling and pass bipartisan 
health insurance now so it can go to the President's desk and he can 
sign it, and we can all declare victory for the average American and 
help those people who find it more and more difficult to buy health 
insurance.

                          ____________________