[Congressional Record Volume 142, Number 85 (Tuesday, June 11, 1996)]
[Senate]
[Pages S6066-S6069]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        HEALTH INSURANCE REFORM

  Mrs. KASSEBAUM. I very much appreciate the Senator from Massachusetts 
giving me some time at this moment. I would have been happy to wait. 
But both the Senator from Massachusetts and myself have worked for many 
months on health insurance reform. I very much appreciated Senator 
Kennedy, the ranking member of the Labor and Human Resources 
Committee--his efforts to help us achieve what the Senate voted on 100 
to 0 for some very important health insurance reform measures.
  Today, I want to speak for a moment about where we stand on this 
issue. First, because I heard the chairman of the Budget Committee 
speak on the budget resolution before us, I want to speak with respect 
to the admiration I have for Senator Domenici and his honesty and 
vision regarding what is needed in our budget. Both he and Senator Exon 
from Nebraska, who is the ranking member, have worked many years on 
budget matters, and I am sure that at some point there must be a 
certain weariness that sets in as yet one more budget resolution comes 
before the

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Senate. But it takes dedication, which I greatly admire, on the part of 
the Senator from New Mexico through the years to speak to what he 
feels. I strongly support the vision that he has and that is required 
of us today.
  Speaking to health insurance reform, which both Senator Kennedy and 
myself feel is very important, negotiations are still going on. The 
agreement that was reached last night on this measure represents a 
consensus among Republican members, who have been meeting informally 
for some weeks. Both myself and Senator Kennedy have been in conference 
and negotiations ourselves to see if this issue cannot be advanced.
  As a participant in the process of informal negotiations among 
Republicans Members, I would say much was given up by Members who feel 
very strongly about particular provisions. For example, Members of the 
House of Representatives agreed to drop provisions on medical 
malpractice reform, which many Members there strongly supported and 
which was in the House-passed measure, and the multiple employer 
welfare arrangement, MEWA's, which would have most certainly led to a 
Presidential veto.
  Likewise, as I am sure, all realize more was added--particularly with 
respect to medical savings accounts--that others would like to see. I 
count myself among those who would have preferred a more focused bill. 
We added here in the Senate parity for mental illness insurance, which 
many here strongly support, and many in the House support. But to come 
to some agreement for those who question whether we can do that at this 
time, or not, meant that provision was dropped as well.
  However, I have been around here long enough to know that no one gets 
everything they prefer. I listened very carefully to my colleagues in 
the House, and it is my assessment that the proposal now on the table 
is what it will take to bring our efforts to fruition. There may have 
to be--and I guess there would be--some more minor adjustments. I want 
to speak particularly to the medical saving accounts provision because 
that is what has been perhaps the hardest and biggest hurdle to get 
over, and to what I believe represents a fair and credible approach to 
this issue. Briefly, beginning in January of next year, the medical 
savings accounts will be available to the self-employed and to 
employees of businesses with 50 or fewer employees.
  A study regarding the effect in the small group market on adverse 
collections, health cost, use of preventive care, and consumer cost 
would be conducted over a 2-year period.
  Mr. President, I believe that starting with the small group market 
where many of the most important issues with respect to MSA's have been 
raised will provide Congress with the most accurate assessment of their 
advantages or disadvantages on how perhaps MSA plans should be drawn 
that would be the best devised plan possible for medical savings 
accounts. This is the group where concerns have been raised about the 
possibility of adverse collections and where States have developed the 
greatest expertise in providing insurance access to small businesses. 
The proposal goes on to extend MSA's to individuals and employers with 
50 or more employees on January 1 in the year 2000. Unless the Congress 
acts to delay or repeal the expansion, separate votes would be 
guaranteed on both the individual and large employer expansion.
  In addition, the proposal includes new means for consumer protection 
standards as a condition of deductibility. These provisions assure that 
the consumers will have sufficient information to judge this new 
product, and they can take into account a recent Rand study showing 
that adverse collections can be minimized by limiting the level of MSA 
deductibles.
  First, MSA plans would be required to disclose the information about 
cost-sharing requirements, deductibles, and limitations on coverage, if 
any, under the plan.
  Second, MSA plans could have a maximum deductible of $5,000 for 
individuals, or $7,500 for family coverage, indexed for medical 
inflation. That is a high deductible, but it would, we thought, be 
better than a floor being placed and that a ceiling should be placed.
  Third, once deductible limits are reached, individuals would be 
required to pay on average no more than 30 percent cost sharing for 
their health benefits.
  In addition, six adjustments to the structure of the House MSA 
provisions were made in response to recommendations by the 
administration. These modifications could tighten tax rules regarding 
any possible abuse.
  Finally, it should not be forgotten that there are core elements of 
the health insurance bill. Those dealing with portability and 
preexisting conditions are firmly in place. Those are provisions which 
we all agreed on were very important, Mr. President. They are the ones 
Senator Kennedy cared about and that I cared about. We argued no 
amendment should be added in order to achieve those core provisions. 
But then that is not the way the House and Senate worked their will. 
Amendments were added in both Houses.
  In addition, of course, the agreement includes Senate provisions 
dealing with deductibility and long-term care insurance, which will 
make health insurance not only more portable but also more affordable 
for millions of Americans.
  These are important changes, and I am confident that further 
reflection on this proposal will produce a public law, I am absolutely 
confident, that we can come to an agreement on both sides of the aisle 
on with the administration to achieve health insurance reform which 
will benefit millions of Americans. I recognize that compromise is 
always difficult. It was a difficult process in committee and on the 
Senate floor. As an even broader range of issues were put on the table 
by the House, it became even more of a challenge to find common 
ground among disparate views. Nevertheless, I think that each of us 
recognize the need to compromise, and I believe this proposal will 
strike a fair and equitable balance which will put meaningful health 
care reform within our grasp.

  Mr. President, I have had concerns about the medical savings 
accounts. I think we need to go slow and understand them--understand 
where there may be difficulties and how to achieve them in a way that 
will benefit many Americans, particularly those who have not had any 
other access to health insurance. But, by doing it slowly and phasing 
it in and studying it carefully, I think it can and should be achieved.
  So I hope that as we continue negotiations, we can actually, over 
time, achieve some agreements on the proposals in health insurance 
reform that will allow us to succeed in efforts that we know will 
benefit many, many.
  Thank you, Mr. President. I yield the floor.
  Mr. DOMENICI. Mr. President, may I have a little dialog with Senator 
Kassebaum regarding that bill?
  Mr. KENNEDY. Please do.
  Mr. DOMENICI. I do not choose tonight to go into an indepth analysis 
of the bill as it pertains to the severely mentally ill or those who 
need mental health care in America. I do want to suggest as one of the 
prime sponsors of amendment, which will be dropped, that I believe we 
should not have a commission in this bill--a commission getting bigger 
and bigger and broader and broader and more and more issues. Frankly, I 
think we would rather have an opportunity to address this issue one 
more time in another manner. I do not think a commission is going to 
solve many of the issues that we think need to be solved, at least in 
any of the iterations we have seen on the commission. I would ask that 
it not be included. I mean, I think it is no compromise for us, and we 
just should not have it, and let us get on with this fight in another 
way.
  So I personally will ask them not to put it in. I will return to my 
office and advise the House lead conferees that I personally would like 
not to have the commission in it.
  I see my cosponsor on the floor.
  Mr. WELLSTONE. Might I indulge the Senator for a moment on a comment 
on this?
  Mr. KENNEDY. Sure.
  Mr. WELLSTONE. I have a different perspective. I also feel it is not 
much of a compromise. I just wanted to say, having been a cosponsor of 
this amendment with my colleague from New Mexico, that when the medical 
savings accounts--I am all for working out an

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agreement--came to the floor of the Senate, that amendment was 
defeated. Then we talked about compromises. I know the Senator from 
Massachusetts will talk about that. The mental health amendment, I 
think, passed with 68 votes. Then we worked very hard to pare this 
down. What we came up with was a very reasonable formulation, if you 
want to talk about a compromise, which dealt with lifetime annuals; 
just have the same cap parity with that, which would have been so 
important to families to get under.
  I urge my colleagues, as we get into negotiations, I would like for 
that to continue to be in the mix. It was a very reasonable 
formulation. The Congressional Budget Office projection was like two-
tenths of 1 percent increase. To me it is just unconscionable that this 
cannot be accepted. I mean it passed by 68 votes. I do not believe that 
this should now be knocked out of the mix.
  I have urged my colleagues on the Democratic side to please hang in 
there on this. The White House supports this. The Democrats support 
this. I know many Republicans do. I do not know anyone who has worked 
harder on this than Senator Domenici.
  I urge my colleague from Kansas, whom I believe in, and certainly my 
colleague from Massachusetts, please, as we go forward with these 
negotiations, do not just simply cancel us out. By the way, the ``us'' 
is not Senator Domenici and myself. The ``us'' are citizens all across 
this country who thought finally that they were going to see a time 
come when the U.S. Congress would put an end to some of this 
discrimination and do something very good and very positive and very 
helpful for families all across the country.
  Do not shut us out.
  Mrs. KASSEBAUM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Kansas.
  Mrs. KASSEBAUM. Mr. President, if I may say so, I know that there is 
no one who cares more about this than Senator Kennedy, as well, and 
Senator Domenici and Senator Wellstone went a long way in proposing 
something which many of us hoped would work and be successful in 
compromise. At this point, it has not been. But it has been probably 
the question of how much further we can get in negotiations.
  I very much appreciate the Senator from Massachusetts giving some 
time to discuss the health insurance reform effort, and I appreciate 
all that he is doing and continues to do to try to help achieve a 
successful resolution.
  I thank the Chair.
  Mr. KENNEDY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
  Mr. KENNEDY. Mr. President, I thank the Senator from Kansas for her 
comments. I appreciate her addressing the Senate on this particular 
measure about the state of negotiations. Initially, I have to respond 
to my good friend from New Mexico as well as Senator Wellstone. It is 
not my purview about whether this matter will be in or outside the 
compromise. It appears that whatever has been recommended by the 
Republican leadership has at this time included a study in the 
proposal. I myself, as Senator Wellstone has pointed out, strongly 
believe that what would have been a reasonable compromise of perhaps 
extending mental health to Federal employees would have had included a 
comprehensive program of up to another 10 million without affecting 
businesses' bottom lines. But that was not to be considered.
  Then I supported strongly the position that has been outlined here in 
terms of the yearly inclusion and the yearly caps of the longer 
lifetime caps for the funding of mental health programs. But that has 
been dismissed. I think the bottom line is just to dismiss those 
proposals or to have a study.
  I come down on the side of the Senator from New Mexico because I 
fear, if we do a study, that may very well be utilized as a way to 
compromise further progress in addressing mental health down the road 
on some future health care proposal.
  I for one hope very much that, if we are able to get this particular 
proposal, the Kassebaum-Kennedy bill, forward, the health issue will go 
back on the agenda. Mental health being as important as it is, we may 
very well have a real opportunity to move ahead on that in another 
Congress.
  Not that I would find it persuasive personally, but maybe there would 
be others who would: not to debate this issue since we are doing this 
comprehensive study over a period of years, and therefore let us wait 
until the study results are known.
  But I hear the Senators. They have spoken well on this issue, and we 
will, to the extent we can, pass on their observations and their strong 
views to the conferees.
  Just very briefly, I thank my friend, Senator Kassebaum, for her 
explanation as to what was basically included in a proposal that has 
now gathered the support of the Republican leadership in the House and 
the Senate. As I have said many times, I admire her continued 
leadership in moving this whole debate so far forward that there still 
is, I would hope, real opportunity of enacting the core legislation. We 
have some difference on the proposal which has been outlined. But there 
still is a very strong desire, I believe, on everyone's part, as there 
should be, to try to achieve the desired outcome of legislation.
  The concept of the legislation Senator Kassebaum has outlined on 
other occasions, which goes back to the end of the 1994 congressional 
debates on health care reform, pulled together the various proposals 
that were advanced, Republican and Democrat, and included many of 
Senator Dole's proposals. It was spoken of as an issue of importance by 
Senator Dole at that time, and he has reiterated those comments in a 
number of statements in recent days.
  So this really was a very important proposal, a modest step but a 
very important one, a vital one to the 25 to 27 million Americans who 
have preexisting conditions and other millions of Americans who would 
be able to take advantage of the portability provisions.
  So I stand with the Senator from Kansas in hoping we will be able to 
work the will of the Senate and be able to achieve those objectives. 
The principal concern that I had in the proposal as outlined here this 
evening, and that has been reported previously, is that, first of all, 
we would be including not just a test, we would be immediately 
including about a third of the work force in an untried and untested 
program, which would inevitably include the entire work force in just 
three short years unless the Congress acts to prevent it.
  So the signal very clearly is, let us move forward with a national 
program that would include the MSA concept. What many of us have 
believed is that this idea is untested and untried, and sufficient 
questions have been raised about it. For example, the Urban Institute, 
which the Senator refers to, has pointed out that, at a $1,500 
deduction, evidence of adverse selection is not quite evident. But once 
you move to $2,500, adverse selection becomes a major factor and a 
major force. In this proposal, we are talking about a $5,000 deductible 
as a possibility.
  So the underlying concept that all of us have had in urging the 
Kassebaum-Kennedy proposal has been, when it comes to MSA's: Let us do 
no harm. Let us do no harm to the existing health insurance system. Let 
us do no harm.
  Now as to the issue on malpractice. It is an issue we have debated 
and discussed on many different occasions and will again. It was not 
something that was so special, so unique to this occasion that an 
independent bill could not come over here on that measure. It was 
before the Congress earlier in the session and it was set aside for, I 
think, very, very sound reasons, which we will be glad to debate at 
another time.
  The issue of MEWA's was not really a new idea. That has been around 
for a number of years. The problem with the MEWA's in the early 1980's 
is that they were so involved in fraud that by 1982 it was the judgment 
of both the Federal and the State governments that State enforcement 
against fraud and abuse should be put into effect. That was under a 
Republican Congress, and that was put into effect.
  Now, without really any review, without any kind of hearings, without 
any kind of examination, we want to take the State enforcement away. 
That is a very important policy issue to debate, but that is certainly 
something

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that we could do tomorrow or do the next day. There ought to be 
hearings. We ought to find out about the role of the State and the 
Federal Government in terms of the enforcement.

  The fact is, enforcement by the States on MEWA's has worked well. It 
has reduced significantly the instances of fraud and abuse. I would be 
quite interested in listening to those on the floor of the Senate try 
to persuade the Senate why that is a good idea, to go back to a time 
when States were not providing oversight and regulations to protect 
working families.
  So we saw those two elements dropped. I think, as I say, I would have 
hoped they could have been dropped and we could have debated them at 
another time. They were dropped. But I find it very difficult to be 
convinced that these were major elements of a major proposal that were 
given up in order to try to reach common ground with the Senate--when 
the Senator from Kansas understands very well that what she has 
fashioned and what has been supported here was really a unique, 
special, targeted effort to deal with the preexisting conditions and 
portability, which is really a new way of trying to come to grips with 
the health care needs of many of our citizens.
  At the same time, as was pointed out, another area where I think 
there is broad agreement in terms of considering in parallel mental 
illness as well as other physical illness was completely set aside. 
That would have been new ground that was being broken. But that, for 
the financial cost, was really too much. I regret it. I am personally 
convinced, as we have seen with many insurance companies, that those 
companies that have effective mental health as well as physical health 
programs actually see a reduction in the outlays for the physical 
conditions because of the programs that they have there that are 
available in mental health. Actually, it is going to save money over a 
period of time.
  We have not been able to make that case in a convincing way, although 
I am, frankly, convinced. I know Senator Wellstone is convinced as 
well. But we have the basis of a very strong indication from a number 
of the insurance companies. But we are too late in the session to have 
been able really to consider that. I regret it.
  So I thought it made a good deal of sense that we have some kind of 
test of the MSA's, and we had advanced three different proposals. The 
White House had advanced proposals. Those were effectively dismissed. 
Then there were proposals that were discussed last week by Republican 
leadership and then further refined over the course of the weekend.
  So there is where we are. One of the features I mentioned to the 
Senator from Kansas is that the evaluation for all these programs is 
going to be as a result of the chairman of the Finance Committee and 
the chairman of the Ways and Means Committee naming the committee that 
is going to do the evaluation. I think that was sort of a nonstarter, 
but there may be Members who would differ with that. If we are going to 
get the kind of clear evaluation which is needed, and which has been 
outlined, in fairness, by the Senator from Kansas, the types of things 
that should be considered are a review by an independent body to give 
reports. That would be very, very important.
  Another item in the proposal is, with the acceptance of the 
deductibility for small business only going up to 80 percent, here you 
have 100 percent in MSA's, so you have a skewed condition just to get 
started with any kind of comparison. We phase in the 80 percent up to 
the year 2000. They would go into an MSA immediately in terms of 100 
percent. So you are obviously skewing this in terms of what is included 
in the other parts of the legislation.
  These are the kinds of things which I think people who would have a 
chance to review these issues and get into matters could address. But 
the most basic and fundamental part of it is putting in place an 
untested and untried program in which many of those groups that have 
looked at it, in all fairness, have felt it would be particularly 
threatening. To whom? To our seniors, to working families, to children 
for prevention, and consumers generally.
  Those who are supporting it primarily have been those--I know there 
are individual Members, and I respect their views--but, frankly, the 
outside interests that have been talked about have been the particular 
companies who have been involved in these programs that have been 
involved in some of the greatest abuses of the health care system.
  So I think when you have the Joint Tax Committee talking about the 
cost, if we get to 1 million people, it will cost $3 billion over a 10-
year period. Here we are talking, at the outside, 40 million people. It 
raises some questions about what the cost would be. When you have the 
Urban Institute talking about what would happen in terms of adverse 
selection and moving from $1,500 to $2,500 in deductibility--this goes 
all the way to $5,000--I think you can say there is certainly some 
reasonable kind of questions about who would become involved in this 
program, whether it would be, as many of us believe, the wealthiest and 
healthiest individuals.
  When you have the refusal of the insurance companies that are 
involved in this process making available to the Academy of Actuaries 
the kinds of numbers--not the proprietary information --but just the 
numbers in terms of markets and getting some kind of fair evaluation of 
what is happening in the industry and not only the particular golden 
door industry, but others involved in it, being turned down on that 
issue raises questions. There have been CBO studies, as well. I 
referred to those at other times, and I will not take the time to do so 
now.
  So, Mr. President, this issue is not going to go away. We will have 
it, and we will be required to address it. I am personally convinced 
that we will be successful in passing the core legislation in this 
Congress, because it is not going to go away. It is too powerful. There 
are too many families that will be affected by it. We may have some 
rocky roads and bumps along the way until we get there, but I think 
this issue is too important for families to give way on it.
  I know I and others and I know Senator Kassebaum is still strongly 
committed to achieving the objectives. We will just have to work this 
process through.
  But I thank the Senator very much, and I look forward to continuing 
to work very closely with her.

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