[Congressional Record Volume 142, Number 117 (Friday, August 2, 1996)]
[Senate]
[Pages S9501-S9526]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996--CONFERENCE 
                                 REPORT

  The Senate continued with the consideration of the conference report.
  The PRESIDING OFFICER. The Senate is now operating under control of 
debate time.
  Who yields time?
  Mr. KENNEDY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, as I understand by the previous 
agreements, we have divided up the time for the next few hours between 
the Kassebaum-Kennedy bill and also on the minimum wage legislation, 
but that there has been agreement to vote on these measures at 6 
o'clock. So there is an expectation that it would be at 6 o'clock.
  So I expect that during the course of the next period of time that we 
have between now and 6 that perhaps that time could be divided, if it 
is agreeable with Senator Kassebaum; that we might just divide the time 
between she and I until 6 o'clock.
  Mrs. KASSEBAUM. I anticipate, of course, if there is more time 
allocated to us, that will take us past 6 o'clock. As you know, Senator 
Domenici and Senator Wellstone want a large share of that time to be 
equally divided. We will try to do so. But we will have to make sure 
that time is allocated to them.
  Mr. DOMENICI. Mr. President, I think the Senators will be fair. But 
it seems to me that the spirit of the understanding would provide a 
portion of that time to the Senator from New Mexico. I think the spirit 
of it was that a portion of that time would go directly to the Senator 
from New Mexico.
  Mr. KENNEDY. If we have 55 minutes, I suggest that we divide it 
between Senator Kassebaum and myself. And then we will allocate it to 
our Members between now and 6 o'clock, if that is agreeable.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. KASSEBAUM. Mr. President, I allocate to myself 5 minutes.
  The PRESIDING OFFICER. The Senator from Kansas is recognized for up 
to 5 minutes.
  Mrs. KASSEBAUM. Mr. President, today, we stand on the threshold of 
passing long-overdue reforms to our Nation's health insurance system.
  According to the General Accounting Office, the bipartisan conference 
agreement before us today will help at least 25 million Americans each 
year who now face discrimination and live in fear that their health 
insurance coverage will be canceled if they change jobs, lose their 
job, or become sick.
  It was exactly 1 year ago today that the Senate Labor Committee 
passed the core provisions of this legislation by a unanimous vote. For 
many months prior to that time, Senator Kennedy and I worked together 
with insurance companies, consumers, Governors, State regulators, large 
employers, small employees, and other to forge a bipartisan consensus 
which would bring us to this day.
  Mr. President, it has been a long, and sometimes bumpy, road. But the 
spirit of cooperation and bipartisanship that began this process 1 
years ago has allowed us to overcome very difficult obstacles that 
threatened--but never derailed--our drive to pass common-sense health 
reforms that would provide real health security.
  Whilte there has been a great deal of debate and polemics over the 
last few months about extraneous provisions, Senator Kennedy and I have 
never lost sight of our primary goal. The heart and soul of the 
Kassebaum-Kennedy bill that passed the full Senate unanimously are 
firmly embedded in the conference agreement before us.
  Mr. President, beginning July 1, 1997, every American who has played 
by the rules will be able to keep their health insurance coverage even 
if they change jobs, lose their job, or have a preexisting illness.
  Last night, the House of Representatives passed the Health Insurance 
Portability and Accountability Act by an overwhelming vote of 421 to 2. 
Today, we will have the opportunity to do the same and to send this 
bill to President Clinton for his signature.
  This is a dramatic victory for the American people--not only because 
the bill will help millions of Americans with preexisting illnesses, 
but also because--I believe--the process of compromise, negotiation, 
and bipartisanship that was the hallmark of this bill will go a long 
way toward restoring Americans' faith that their Government can work to 
address their most pressing concern.
  Depending on who was speaking yesterday, one would think that health 
reform was entirely the province of one party. But as Senator Kennedy 
and I both know, this effort has been bipartisan from the start.
  Senator Kennedy and Representative Archer worked together to develop 
a compromise on medical savings accounts that broke a months-long 
impasse on the bill.
  The majority and minority leaders, as well as Senator Dole, deserve 
much credit for breaking the gridlock over this bill.

[[Page S9502]]

  In fact, Mr. President, I would just like to say a special word of 
appreciation to the majority leader. I think that Senator Lott has 
devoted a great deal of time and energy to making sure that we could 
reach this point this evening before we go out on our recess.
  And there also has been significant bipartisan support in the House 
from Representatives Thomas, Bliley, Bilirakis, Waxman, Hyde, Dingell, 
and others. I especially want to recognize Representative Hastert of 
Illinois for his leadership in bringing together members of both 
parties to reach agreement on this very important bill.
  I regret that we could not do more to help small employers. In an 
effort to avoid controversy that could have derailed the legislation, 
both the House and Senate small business pooling provisions were 
dropped from the conference agreement. Representative Fawell from 
Illinois is perhaps the greatest advocate of this reform, and Senator 
Jeffords, from Vermont, also has worked very diligently to help small 
employers enjoy the same economies of scale as large employers. My hope 
is that those Members and others will continue to show leadership in 
the future to find constructive bipartisan solutions in this area.
  I also regret that this legislation does not include malpractice 
reforms that could significantly lower costs for consumers.
  Finally, Mr. President, I know many of my colleagues are disappointed 
that the bill does not do more to help end discrimination against those 
with mental illnesses. I know that Senator Domenici and others will 
speak to that issue later. But I would just like to express my 
appreciation to Senator Domenici who has devoted his time and heartfelt 
efforts to achieving legislation to address parity in insurance 
coverage for those with mental illness.
  We did not do enough in this bill, and I certainly can understand 
those who wish we could have done more. However, the bill does 
represent significant progress for those with mental illness and other 
chronic conditions. The bill expressly prohibits employers and insurers 
from denying coverage to individuals because of preexisting mental 
illnesses as well as physical illnesses, and people who suffer with 
mental illnesses will be able to change jobs without the fear of losing 
their health coverage.
  I also have received letters in recent days from nearly 30 groups, 
including the American Association of Retired Persons, the American 
Medical Association, the American Hospital Association, the American 
Cancer Society, the Healthcare Leadership Council, the American Lung 
Association, the American Heart Association, the March of Dimes, and 
others.
  Let me read from one of these letters:

       The American Cancer Society estimates that more than one 
     million people will be diagnosed with cancer this year. Ten 
     million Americans alive today have a history of cancer. Under 
     current insurance practices, many of these people will be 
     denied coverage if they change jobs or lose their job, or 
     they will be squeezed out of their existing plan because of 
     their health status. The health insurance reform bill 
     addresses these critical issues by limiting preexisting 
     condition restrictions and ensuring greater portability of 
     coverage. * * * The modest reforms contained in [this bill] 
     will go a long way toward protecting people with chronic 
     illness and their families. * * * 

  So, Mr. President, let us move forward. Let us cap this bipartisan 
effort with another strong vote today and send this historic 
legislation to the President's desk for his immediate signature.
  There is no controversy about the central elements of the bill. There 
is no question that the President will sign the legislation. There is 
no question that--despite its long delay--the President, and members of 
both parties, in both the House and the Senate, can take credit for 
passing these sensible reforms.
  And there is no question that the American people will be the real 
winners today. This bill will guarantee that those who need coverage 
the most are not shut out of the system. It is a small step forward, 
but it is a historic step. And it will mean the world to millions of 
Americans who will no longer live in fear that they will lose their 
health coverage when they change jobs or lose their job.
  I urge my colleagues to support the conference agreement, and to send 
this important measure to the President today.
  Mr. President, I think many will be helped by this bill. While it is 
not a great leap, it is an important, historic step forward in 
addressing many of the American people's most pressing concerns about 
health care.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, in the final moments before we are going 
to have legislative completion of this Kassebaum-Kennedy bill, I once 
again commend the chairman of our committee, Senator Kassebaum, for her 
leadership and work in fashioning this legislation, which reflects the 
strong bipartisan support of her committee. As she has rightfully 
pointed out, it was a year ago today that the committee reported it 
unanimously. It did take us a period of time, some 8\1/2\ months, 
before the Senate finally considered the legislation, and then passed 
it unanimously. So this does really reflect an extraordinary 
legislative achievement and accomplishment.
  As we come into the final days and hours of this part of the 
Congress, I think all Americans are very much in the debt of Senator 
Kassebaum for all she has done on this legislation and on many other 
pieces of legislation, and it is important for the record to note it. I 
think the Members of the Senate respect and understand that.
  Secondly, Mr. President, this legislation is right and necessary not 
just because, as the leaders of all of the great religions have pointed 
out, it is morally imperative for those who have some preexisting 
condition or some illness, or disability. It is not only right because 
we have virtual unanimous support from the business, consumer, and 
labor communities, but most powerfully it should pass because it has 
the support of the working families in this country.
  There will be many who will try to claim credit for the legislation. 
But ultimately this legislation was passed for the parents, those 
parents who today are worried about a child who may have some 
disability and wonder what in the world is going to happen to their 
child when they reach maturity and they are no longer included in that 
parent's policy. Those parents know that today it is virtually 
impossible for that child to be able to get some kind of health 
insurance.
  Victory can be expressed by workers, who currently can see a new 
opportunity for themselves and for their families by moving up in terms 
of the employment opportunities but hesitate to do so. They hesitate to 
attempt to fulfill the great American dream because they wonder whether 
that job which is out there and offered to them in which they feel they 
can do a superior job may not provide that degree of coverage for a 
member of their family, for their wife or for one of their children. As 
a result, they turn down that opportunity. The American dream becomes 
somewhat more remote and distant to them.
  It is a victory for those older workers, in my State of Massachusetts 
and around the country who, as a result of downsizing, changes in 
defense procurement, and changes in our commercial markets, become 
down-sized and put out, effectively to pasture, and wonder whether they 
are going to be able to acquire any kind of health insurance because 
maybe they are not as physically able as they were at an earlier period 
of time. These older workers--who have worked hard, paid their dues 
over the long period of time and who may be a little ill--now have this 
anxiety--just when they are looking at their golden years in 
retirement.
  It is the entrepreneur, the individual who wants to start up their 
own business but knows that because a member of their family has some 
illness, they are virtually prohibited from acquiring any kind of 
health insurance. Today, their hopes and dreams are further diminished.
  When the final vote on the Kassebaum-Kennedy is taken later today, it 
will pass overwhelmingly. It will pass because it is bipartisan 
legislation. It will pass because it is supported by over 200 groups in 
a broad-based coalition representing consumers, business,

[[Page S9503]]

labor, and responsible insurance companies. It will pass because the 
conference committee agreed to limit the controversial medical savings 
account proposal to a genuine test--not a full-blown program--and to 
accept meaningful portability reforms. Most of all, it will pass 
because the American public deserves and demands action.
  I want to give special praise to the chair of our committee and the 
leading sponsor of this bill, Senator Kassebaum. It was her leadership 
that resulted in a unanimous vote from our committee. It was her vision 
and commitment that made it possible for this bill to pass the Senate 
without crippling amendments. She was tireless in her efforts to reach 
a constructive compromise to get a bill that all of us can support. As 
she nears retirement from the Senate, this bill is her gift to the 
American people. The American people owe her a great debt of gratitude, 
and I'm proud to have served with her on the Labor Committee for all 
these productive years.
  This bill will end many of the most serious health insurance abuses 
and provide greater protection to millions of families. It is an 
opportunity we can't afford to miss.
  The abusive practices addressed by this bill create extensive and 
unnecessary suffering. Ending them will bring greater opportunity and 
peace of mind to millions of Americans. Twenty-five million Americans a 
year will be helped by the provisions of this bill. Everyone knows a 
family member or friend who has been hurt because of the abuses this 
bill will end.
  Millions of Americans are forced to pass up opportunities to accept 
new jobs that would improve their standard of living or offer them 
greater opportunities because they are afraid they will lose their 
health insurance. Many others have to abandon the goal of starting 
their own business because health insurance would be unavailable to 
them or members of their families.
  Parents who have a child with a health problem worry that their son 
or daughter will be uninsurable when they are too old to be covered by 
the family policy. Early retirees find themselves uninsured just when 
they are entering the years of the highest health risks. Other 
Americans lose their health insurance because they become sick, lose 
their job, or change their job--even when they have faithfully paid 
their insurance premiums for many years.
  With each passing year, the flaws in the private health insurance 
market become more serious. More than half of all insurance policies 
impose exclusions for preexisting conditions. As a result, insurance is 
often denied for the very illnesses most likely to require medical 
care.
  The purpose of such exclusions is reasonable: to prevent people from 
``gaming'' the system by purchasing coverage only when they get sick. 
But current practices are indefensible. No matter how faithfully people 
pay their premiums, they often have to start over again with a new 
exclusion period if they change jobs or lose their coverage.
  Eighty-one million Americans have conditions that could subject them 
to such exclusions if they lose their current coverage. Sometimes these 
conditions make them completely uninsurable.
  Insurers impose exclusions for preexisting conditions on people who 
don't deserve to be excluded from the coverage they need. Sometimes, 
insurers deny coverage to entire firms if one employee of the firm is 
in poor health. Even if people are fortunate enough to obtain coverage 
and have no preexisting condition, their policy can be canceled if they 
have the misfortune to become sick--even after paying premiums for 
years.
  One of the most serious consequences of the current system is ``job 
lock.'' Workers who want to change jobs must often give up the 
opportunity because it would mean losing their health insurance. A 
quarter of all workers say they are forced to stay in a job they 
otherwise would have left--because they are afraid of losing their 
health insurance.
  When we originally debated this legislation on the Senate floor, I 
spoke of just a few of the millions of Americans who have been 
victimized by the abuses in the current system.
  Robert Frasher from Mansfield, OH works for an employer who offers 
health coverage to employees. But the insurance company won't cover him 
because he has Crohn's disease.
  Jean Meredith of Harriman, TN and her husband Tom owned Fruitland 
USA, a small convenience store. They had insurance through their small 
business for 8 years. But Tom was diagnosed with non-Hodgkin's 
lymphoma, and their insurance company dropped them because they were no 
longer profitable insurance risks. Without health insurance, Tom 
Meredith had to wait a year to get the surgery he needed. After 
spending $60,000 dollars of his own funds, his cancer recurred and he 
died a year ago. Tom Meredith might still be alive today, if he hadn't 
been forced to wait that year.
  Diane Bratten from Grove Heights, MN and her family have insurance 
through her employer. Because of a history of breast cancer now in 
remission, Diane and her family would not be able to get coverage if 
she decided to change jobs or was laid off.
  Nancy Cummins of Louisville, KY lost her health insurance when her 
husband's employer went bankrupt. When their COBRA coverage expired, 
they were uninsured for 3 years until they qualified for Medicare. 
During this period, she suffered three heart attacks, which left their 
family with $80,000 in debts.
  Jennifer Waldrup of my home state of Massachusetts was covered by her 
husband's health insurance until his employer went out of business. 
When she applied for coverage under her own policy, she was turned down 
because she had multiple sclerosis. Her employer tried to help, but 
could not find an insurer who would insure here. Her husband had to 
cash in his life insurance to pay her medical bills.
  Tom Hall of Oklahoma City testified before our Committee. He 
faithfully paid for premiums for 30 years under the group policy of the 
construction business he co-owned. When the company dissolved and he 
became self-employed, the same insurance firm refused to give him 
coverage because he had a heart condition. He lives in fear that his 
life savings will be wiped out.
  This legislation is a health insurance bill of rights for Robert 
Frasher, for Jean Meredith, for Diane Bratten, for Nancy Cummins, for 
Jennifer Waldrup, for Tom Hall--and for millions of other Americans as 
well.
  Those who have insurance deserve the security of knowing that their 
coverage cannot be canceled, especially when they need it the most. 
They deserve the security of knowing that if they pay their insurance 
premiums, they cannot suddenly be denied coverage or be subjected to a 
new exclusion for a preexisting condition when they change jobs and 
join another group policy, or when they need to purchase coverage in 
the individual market.
  This health insurance reform bill corrects these fundamental flaws in 
the private insurance system. It limits the ability of insurance 
companies to impose exclusions for preexisting conditions. Under the 
legislation, no such exclusion can last for more than 12 months. Once 
someone has been covered for 12 months, no new exclusion can be imposed 
as long there is no gap in coverage--even if people change jobs, lose 
their job, or change insurance companies.
  The bill requires insurers to sell and renew group health policies 
for all employers who want coverage for their employees. It guarantees 
renewability of individual policies. It prohibits insurers from denying 
insurance to those moving from group coverage to individual coverage. 
It prohibits group health plans from excluding any employee based on 
health status.
  These rules are important for helping people with a wide range of 
health conditions. They also address the relatively new but serious and 
growing concern that genetic screening information will be used to deny 
coverage to people who aren't sick yet--a concern that prevents many 
from getting the medical tests that could help protect them against 
future illness.
  Also, because of this bill, victims of domestic violence will know 
that they can seek help without jeopardizing their insurance coverage.
  The bottom line is that this legislation guarantees that no one who 
faithfully pays their premiums can have their insurance taken away or 
preexisting conditions imposed, even if they change jobs or lose their 
job.

[[Page S9504]]

  There has been a sudden rush in recent day to claim credit for this 
bill as it reaches final action. This is not a partisan bill. It was 
developed by a Republican Senator and a Democratic Senator. Members on 
both sides of the aisle have made important contributions. But the 
American people should be clear as to who fought to pass this bill--and 
who fought to derail it.
  The Kassebaum-Kennedy bill was approved by the Labor and Human 
Resources Committee on August 2, 1995--exactly 1 year ago today. It was 
approved by a unanimous vote of 17-0. And then it languished for months 
on the Senate calendar because Bob Dole and the Republican Senate 
leadership tried to kill it by a system of rolling, anonymous holds. In 
fact, it would still be on the Senate calendar today, if it had not 
been for the courageous leadership and timely intervention of President 
Clinton.
  Let there be no mistake about the facts. This bipartisan bill was 
passed because President Clinton led an all-out effort. And it almost 
died because Bob Dole and the Republican leadership tried to kill it. 
They blocked it for months because they were more concerned about the 
profits of insurance companies than the health care of America's 
families. The party that tried to slash Medicare was at it again.
  President Clinton's eloquent call for action on the bill in the State 
of the Union Address on January 23d this year was the trumpet that blew 
down the wall of Republican obstruction. The President focused the 
attention of both the press and the public on the legislation--and on 
the secret maneuvers that were stabbing it in the back. The obstruction 
failed. President Clinton's State of the Union Address lit a fire that 
Bob Dole couldn't extinguish.
  Two months later, on February 6, Bob Dole agreed in principle to let 
the bill come before the Senate. At that time, hardly by coincidence, 
he was in the middle of a difficult campaign in the New Hampshire 
primary.
  And even after he agreed in principle to bring up the bill, he still 
managed to postpone action for more than 3 months--until April 18--so 
that insurance companies who profit from the abusive practices of the 
current system would have more time to organize their opposition and 
prepare their poison pills.
  One of the poison pills was medical savings accounts [MSAs]. The 
House and Senate Republicans tried to force Congress to swallow that 
pill, even though it would clearly jeopardize passage of the entire 
reform. This radical and untried concept was fueled by lavish campaign 
donations from the Golden Rule Insurance Company--one of the worst 
abusers of the current health insurance system. Authoritative, 
independent analyses of the concept warned that widespread use of 
medical savings accounts could easily drive up premiums for other 
citizens by 60 percent or more. In the words of the Congressional 
Budget Office, medical savings accounts ``could threaten the existence 
of standard health insurance.''
  The Republican plan lacked even the most basic consumer protections 
for people who selected MSAs. Deductibles could be as high at $5,000 
per individual and $7,500 per family. There was no limit on how high 
their total out-of-pocket costs could rise.
  The Kassebaum-Kennedy health insurance reform bill is supposed to 
make the insurance system better for the American people, not undermine 
it through untested programs or expose people to excessive health care 
costs. But that is exactly what Senator Dole and the House Republicans 
tried to do. When medical savings accounts were proposed on the Senate 
floor, Senator Dole led the effort--and was soundly defeated.
  House Republicans also demanded other protections for the insurance 
industry that would have made a mockery of the entire bill. Under their 
proposal, the promise of portability became a hollow one. Insurance 
companies could offer only one policy to sick people at a prohibitive 
cost. A family plan would have cost $18,000 a year under the Republican 
plan.
  This scheme would have been a setup for the insurance industry and a 
setback for health reform, if Democrats had not stood firm. The 
intransigence of the House Republican leadership stalled the bill until 
July 25--4 months after it passed the Senate. Until the last day of the 
conference, they continued their attempt to undermine the portability 
provisions. Because President Clinton and Congressional Democrats stood 
firm, the American people are the winners.
  Obviously, this bill is not a cure-all for the health care system. 
But it is an important first step on the road to further reform.
  We all know the problems that continue to exist. Between 1990 and 
1994, the number of uninsured Americans rose 18 percent--from 34 
million to 40 million citizens. The average person who becomes 
uninsured today will stay uninsured twice as long as in the 1980s. 
According to a recent study, the number of uninsured could rise by 
another two-thirds--to 67 million Americans--over the next 7 years. The 
percentage of Americans with job-based insurance will fall from 61 
percent in 1989 to 45 percent by 2002.
  These trends will not change because of the legislation we are 
enacting today. Too many families will still be just one pink slip away 
from losing their coverage. Too many families forced into unemployment 
or retirement by corporate downsizing will not be able to afford the 
insurance they need--even if they cannot be denied the right to 
purchase it simply because they are ill.
  Tens of millions of other Americans have no coverage today because 
they work for employers who won't provide it and because they can't 
afford it themselves. They will get no relief from this bill.
  Too many senior citizens will continue to pay more than they can 
afford for the health care they need. Too many children will still not 
get the healthy start in life they deserve.
  Across the landscape of America there is not a family that has not 
been affected by some preexisting condition, some illness, some 
disability. There is not a family that does not know a neighbor or 
friend that has not been presented with this kind of fear and anxiety.
  So, Mr. President, we move this legislation forward, and we are very 
hopeful that when this measure is actually signed by the President of 
the United States, we will be helping to lift that sense of anxiety and 
fear and frustration from among our fellow Americans when they have 
been turned down by the fiercest and most abusive policies of insurance 
companies.
  We know that this legislation is not going to resolve all the 
problems, but there will be those families, there will be those 
parents, there will be the members of the family, there will be the 
older worker, there will be the entrepreneur who will know they can 
look to the future with additional hope and anticipation in fulfilling 
the American dream.
  So, although this is not all of what some of us may have wanted, this 
is a meaningful, important piece of legislation that can make an 
extremely important and significant difference in the quality of life 
for our fellow Americans. The passage of the legislation is the 
beginning of a journey, not an end.
  Next year I hope, under President Clinton's leadership, and I would 
say a Democratic Congress, we will take the next step forward toward 
assuring every American family the basic right to health care.
  Mrs. KASSEBAUM. Mr. President, I agree with the ranking member of the 
Labor Committee on some things. But the last part of his statement I 
would, perhaps, have to have some question about.
  I yield 5 minutes, now, to the chairman of the Finance Committee, 
Senator Roth.
  Mr. DOMENICI. Mr. President, I ask if the senior Senator from Kansas 
will yield to me for 10 seconds?
  Mrs. KASSEBAUM. I will so yield.
  Mr. DOMENICI. Senator Kennedy, I know your desire for next year, but 
I would remind you, you had the Senate and House for 2 years with the 
President, and you did not get anything done with health care. I yield 
the floor.
  Mr. KENNEDY. Mr. President, I would like to yield to myself. I think 
I have a right to recognition--
  The PRESIDING OFFICER (Mr. Santorum). The Senator from Massachusetts 
should be warned the Senator from Kansas yielded to the Senator from 
Delaware.
  Mr. ROTH. Mr. President, today we fulfill a promise to the American 
people. We bring greater security to American families. We offer peace 
of mind to

[[Page S9505]]

hard-working, responsible men and women who are providing for 
themselves and for their families.
  There has been no question on either side of the aisle--or throughout 
America--about the need to make necessary improvements in our health 
care system.
  The improvements in this legislation primarily focus on making health 
care coverage accessible and affordable. It goes without saying that we 
have the highest quality of care, the best technology, the finest 
health care personnel found anywhere in the world.
  Our objective, then, is to initiate fundamental reforms in access to 
health care without doing irreversible harm to quality, research and 
technology. This legislation is an excellent first step toward 
accomplishing our objective.
  Unlike the health care reform effort made 2 years ago, this 
legislation does not harm the system in the process of reforming it.
  Rather, this legislation meets the most pressing needs associated 
with reform: Increased portability; limitations on pre-existing 
conditions exclusions; guaranteed renewability of health care 
insurance; and, improved means for small businesses and self-employed 
individuals to provide health care coverage, including long-term care.
  I want to particularly thank Senator McConnell for his leadership and 
active participation in these reforms, especially in the area of long-
term care. Likewise, I want to acknowledge the work done by Senator 
Cohen toward preventing health care fraud and abuse. I want to thank 
Senator Grassley for the work he has done in the area of coordination 
and duplication of Medicare-related plans, and Senator Bond who has 
been instrumental in his work for administrative simplification.
  This has certainly been a team effort--a valiant effort by Senators 
and hard-working staff. I am proud of what we have accomplished. Beyond 
the critical reforms I have already outlined, this legislation also 
takes a very important first step toward a program that I have long 
advocated--that is the medical savings account. Medical savings 
accounts provide a fundamental way to make health insurance affordable 
to small business employees and self-employed individuals, and this 
bill provides for a 4-year demonstration project--a project in which 
self-employed individuals and companies of 50 or fewer can participate.
  Mr. firm belief is that this project will prove the success of 
medical savings accounts, and we will then be in a strong position to 
provide MSA's for Americans everywhere.
  Beyond these important reforms, this legislation also helps control 
the cost associated with health care by creating new tools in our fight 
against health care fraud and abuse. While I would like to see our 
efforts to control fraud and abuse go much further, the provisions in 
this bill represent a good starting point.
  Along with providing these tools, this legislation improves the 
Medicare and Medicaid programs and the private health care system 
through uniform standards that will cut out much of the redtape in 
health care.
  It is important to note, Mr. President, that this bill does not pre-
empt State privacy laws. Instead, it provides protection for an 
individual's health information.
  Each of these changes represents a significant improvement over 
current law. Combined they represent a strong first step toward 
reforming America's health care delivery system in a way that improves 
without destroying. And this is critically important to the American 
people.
  Two years ago they rejected the wholesale restructuring of our health 
care system. They understood that reform, as it was proposed then, was 
throwing the baby out with the bath water. It was tampering dangerously 
with one-eighth of our Nation's economy, and a system that had the 
highest standards of quality in the world. What we do with this 
legislation is make the reforms they want--the reforms they need--
without destroying all that is good and working in the current system.
  With this Health Insurance Portability and Accountability Act, we 
keep our promise. We effectively address the problems facing the 
Nation's health care system in an incremental fashion.
  I am honored to be a part of this momentous effort--I appreciate all 
the work that's been done by valiant staff members--and I am heartened 
by the positive, bipartisan way in which we have succeeded.
  I yield the floor.
  Mr. KENNEDY. Mr. President, I yield myself 1 minute.
  I am very, very surprised at my good friend from New Mexico, talking 
about what has been achieved, that this has only been achieved under a 
Republican Congress. Where were the Democrats? I will tell you where 
the Democrats were not. They were not cutting Medicare and cutting 
Medicaid so we could have tax breaks for the wealthiest individuals in 
this country. And where the Democrats were not is waiting 8\1/2\ months 
to bring this bill up, which the Republicans are crowing about at this 
time. That is where the Democrats were.
  I yield 5 minutes to the Senator from New York.
  The PRESIDING OFFICER (Mr. Burns). The Senator from New York is 
recognized.
  Mr. MOYNIHAN. I rise in support of the Health Insurance Portability 
and Accountability Act of 1996. It makes elemental and much-needed 
improvements in health care coverage for Americans by guaranteeing 
``portability'' of health insurance for employees who change jobs, and 
by eliminating the current practice of denying coverage to persons with 
preexisting health conditions. These were the areas in which there was 
by far the greatest consensus when the President's health care 
legislation was considered in the Finance Committee in 1994, and I am 
pleased that agreement has been reached to make these changes.
  However, I am not pleased with the resolution of another issue in 
this bill: the provision to prevent persons from renouncing their 
American citizenship and moving abroad in order to avoid U.S. taxation. 
That dubious practice has come to be called ``expatriation'' among 
members of the tax bar, although that is not a very illuminating term. 
The word expatriate derives from the Late Latin expatriare, to banish. 
Ex, out of. Patria, native country. Perhaps a term that better reflects 
the tax consequences of the issue will emerge in time.
  The conference report on the health legislation before us today 
contains as a revenue offset the House expatriation version, rather 
than the Senate provision. The Senate provision also was included in 
the small business tax relief legislation marked up by the Finance 
Committee on June 12, but it was later dropped in the conference on 
that legislation. I am convinced that the House proposal will leave in 
place a continuing tax incentive to renounce citizenship in order to 
evade taxes.
  This issue gained notoriety in late 1994, when expatriation by 
several very wealthy individuals was widely reported. On April 6, 1995, 
shortly after the issue arose for the first time in Congress, I 
introduced S. 700, a bill to close the loophole in the Tax Code that 
permits ``expatriates,'' as they have come to be called, from escaping 
U.S. taxation.
  Although expatriation to avoid taxes occurs infrequently, it is a 
genuine abuse. The Tax Code currently contains provisions, dating back 
to 1966, intended to prevent tax-motivated relinquishment of 
citizenship, but these provisions have proven difficult to enforce, and 
they are easily circumvented with the assistance of resourceful tax 
counsel. One international tax expert described avoiding them as 
``child's play.'' Under current law, individuals may, by 
renouncing their U.S. citizenship, avoid taxes on gains that accrued 
during the period in which they acquired their wealth--and while they 
were afforded the many benefits and advantages of U.S. citizenship. 
Even after renunciation, these individuals are permitted to keep 
residences and reside in the United States for up to 120 days per year 
without incurring U.S. taxes. Indeed, certain wealthy Americans have 
``expatriated'' while still maintaining their families and homes in the 
United States. They need only take care to avoid being in the United 
States for more than 120 days each year.

  Meanwhile, ordinary Americans who remain citizens continue to pay 
taxes on their gains when assets are sold, or when estate taxes become 
due at death.

[[Page S9506]]

  I regret to say that the expatriation issue has been and, in light of 
the decision taken by the conferees on the health insurance reform 
bill, may continue to be the subject of more controversy than it 
probably deserves. In the interest of making the record complete, I 
will briefly review the history of the issue's consideration in the 
Congress.
  On February 6, 1995, the President announced a proposal to address 
expatriation in his fiscal year 1996 budget submission. Three weeks 
later, on March 15, 1995, during Finance Committee consideration of 
legislation to restore the health insurance deduction for the self-
employed, I offered a modified version of the administration's 
expatriation tax provision as an amendment to the bill. My amendment 
would have substituted the expatriation proposal for the repeal of 
minority broadcast tax preferences as a funding source for the bill. 
The amendment failed in the face of united opposition by members of the 
majority on the committee. The vote against the amendment was 11-9.
  Later in the markup, Senator Bradley offered the expatriation 
provision as a free-standing amendment, with the revenues it raised to 
be dedicated to deficit reduction. Senator Bradley's amendment was 
adopted by voice vote.
  After the Finance Committee reported the self-employed health 
deduction bill, but before full Senate action and before our conference 
with the House, the Finance Committee held a hearing to review further 
the issues raised by expatriation. At our hearing, we heard criticisms 
of some technical aspects of the provision, as well as testimony 
raising the issue of whether the provision comported with Article 12 of 
the International Covenant on Civil and Political Rights, which the 
United States ratified in 1992. Section 2 of Article 12 states: 
``Everyone shall be free to leave any country, including his own.''
  Robert F. Turner, a professor of international law at the U.S. Naval 
War College, testified that the expatriation provision was problematic 
under the Covenant because it constituted a legal barrier to the right 
of citizens to leave the United States. The State Department's legal 
experts disagreed, as did two other outside experts who provided 
written opinions to the committee: Professor Paul B. Stephan III, a 
specialist in both international law and tax law at the University of 
Virginia School of Law; and Mr. Stephen E. Shay, who served as 
International Tax Counsel at the Department of the Treasury under the 
Reagan administration.

  Given this division in authority, it seemed clear that the Senate 
should not act improvidently on the matter. Genuine questions of human 
rights under international law, and the solemn obligations of the 
United States under treaties, had been raised. We therefore sought the 
views of other experts. Opinions concluding that the expatriation 
provision did not violate international law were received from 
Professor Detlev Vagts of Harvard Law School and Professor Andreas F. 
Lowenfeld of New York University School of Law. The State Department 
issued a lengthier analysis supporting the legality of the provision, 
and the American Law Division of the Congressional Research Service 
reached a like conclusion.
  However, there were contrary views, most notably the powerful opinion 
of Professor Hurst Hannum of the Fletcher School of Law and Diplomacy 
at Tufts University, who first wrote to me on March 24, 1995.
  This is where things stood when the House-Senate conference met on 
March 28, 1995. At that time, the weight of authority appeared to 
support the validity of the provision under international law, yet very 
real questions remained unresolved. The underlying bill had to move at 
great speed. As my colleagues well know, the legislation restoring the 
health insurance deduction for the self-employed for calendar year 1994 
had to be passed and signed into law well in advance of the April 17, 
1995 tax filing deadline, so that self-employed persons would have time 
to prepare and file their 1994 tax returns.
  The conference committee had to decide immediately whether to retain 
the expatriation provision. There was no time for further inquiry into 
its validity under international law. We accordingly chose not to risk 
making the wrong decision, which might violate international law and 
human rights. We elected not to include the provision in the conference 
report. The conferees instead adopted a provision directing the Joint 
Committee on Taxation to study the matter and report back.
  That decision, which was the only prudent one at the time, was met 
with some not very pleasant criticism in the Senate. This was 
surprising, since I believed it was axiomatic, particularly on our side 
of the aisle, that Government should proceed with great care when 
dealing with human rights--particularly the rights of persons who are 
despised. The persons affected by the expatriation proposal--
millionaires who renounce their citizenship for money--certainly fell 
into the category of persons who are easy to despise.

  Since that time, a general consensus has developed that the Senate 
provision does not conflict with the obligations of the United States 
under international law. Professor Hannum, after receiving additional 
and more specific information about the expatriation tax, wrote a 
second letter on March 31, 1995 stating that he was ``convinced that 
neither its intention nor its effect would violate present U.S. 
obligations under international law.'' And in the interim, there has 
been time to consider other approaches to the problem. On June 1, 1995, 
the Joint Committee on Taxation published its report on the tax 
treatment of expatriation.
  Shortly thereafter, on June 9, 1995, Chairman Archer introduced an 
expatriation bill that adopted a different approach than S. 700, which 
was the bill introduced by the Senator from New York. A second Finance 
Committee hearing on expatriation was held on July 11, 1995 to consider 
the two competing approaches. The Senate thereafter incorporated in its 
version of the Balanced Budget Act of 1995 a slightly modified version 
of the bill I introduced. The Senate bill adopted the accrued gains 
approach rather than the House alternative as the superior response to 
the problem. However, the House prevailed in conference and a version 
very similar to the Archer bill was included in the final Balanced 
Budget Act of 1995, which was later vetoed by President Clinton.
  That same House provision has now been incorporated in the conference 
agreement before us on the health insurance reform bill.
  Adoption of the House expatriation proposal rather than the Senate 
proposal is being justified, in part, based on the fact that the Joint 
Committee on Taxation has scored it as raising substantially more 
revenue than the Senate version. These revenue estimates are difficult 
to believe, because almost any member of the tax bar would concede that 
the Senate proposal would deter tax-motivated expatriations far more 
effectively than the House proposal. In contrast to the Joint Tax 
Committee, the Treasury Department estimates that the Senate proposal 
would raise substantially more revenue than the House version. This 
comports with the views of most tax experts.
  Here is why I believe the House provision is unsatisfactory. Under 
the Senate provision, an expatriate with a net worth of over $500,000 
(or average annual tax liability in excess of $100,000) generally would 
be taxed on his asset appreciation existing at the time of 
expatriation. Alternatively, an expatriate could elect to continue to 
be taxed as if a U.S. citizen--i.e., to be subject to worldwide tax on 
his assets until their disposition. The provision also offers 
alternatives for delayed payment of the tax on accrued gains, with 
interest.

  Rather than impose a tax on accrued gains, the House bill attempts to 
build on the current law approach of taxing only a portion of the 
income generated by assets of expatriates during the 10-year period 
following expatriation. This approach will fail to eliminate the very 
substantial tax advantages that currently inure to persons willing to 
give up their citizenship.
  Under the House proposal, several categories of taxpayers would 
continue to owe no tax at all should the IRS be unable to prove a ``tax 
avoidance motive'' for expatriating. As under current law, patient 
taxpayers would avoid all tax on accrued gains by simply holding their 
assets for ten years. Gains recognized after that period

[[Page S9507]]

would never be taxed by the United States. A wealthy expatriate needing 
money during the 10-year period could simply borrow money using his or 
her assets as security.
  Under the House provision, no tax at all would be owed on income or 
gains from foreign assets following expatriation, as under current law. 
Given the enormous incentive to own foreign assets, experienced tax 
practitioners would continue to find ways to convert U.S. assets into 
foreign assets in order to avoid tax on the income earned during the 
10-year period.
  The House approach also would risk nonpayment of amounts owed, as it 
relies on the voluntary payment of taxes for 10 years following 
expatriation, well after the taxpayer has moved beyond the reach of 
U.S. courts. In contrast, the Senate version generally would not 
require looking beyond the facts at the time of expatriation, making it 
much more likely that taxes owed would be collected. Further, taxpayers 
would be required to provide security for delayed payment of taxes.
  Another flaw in the House bill is that it will unilaterally override 
existing tax treaties. In its report on expatriation, the Joint Tax 
Committee staff stated that the House version may ultimately require 
that as many as 41 of our 45 existing tax treaties be renegotiated and 
that it might be necessary for the United States to forego benefits to 
accomplish renegotiation.
  As the first Senator to have introduced legislation to end tax 
avoidance by so-called expatriates, and as one who urged that it be 
acted upon expeditiously, I am disappointed that the expatriation 
changes I have sought, and that have been passed by the Senate on three 
separate occasions, have been set aside in favor of far less effective 
measures. I believe the honor of the tax-writing committees is at issue 
here. The action taken today will allow this issue to fester for some 
time to come because the new rules will not measurably reduce the tax 
advantages of expatriation.

  On another matter, I also wish we could have addressed the issue of 
mental health parity in this conference report. In April, I voted for 
the Domenici-Wellstone amendment to the Senate version of the 
underlying bill. It would simply have required health plans to provide 
coverage of mental health services equal to that provided for acute 
medical services. The amendment got 65 votes.
  Subsequent scoring of the amendment by the Congressional Budget 
Office determined that it would be relatively expensive. Senators 
Domenici and Wellstone then prepared a scaled-down version of their 
amendment which would have required health plans to provide equal 
treatment only of annual and lifetime limits. This alternative would 
have cost approximately one-tenth of what the original amendment would 
have cost.
  Unfortunately, this modest revised proposal was also unacceptable to 
the majority members of the conference. Subsequent proposals by Senator 
Domenici to scale back the parity requirement even further were also 
rejected without the benefit of consideration by Senators appointed to 
the conference, or even by our staffs. After the initial meeting of the 
conference in the Ways and Means room on July 26, 1996, the conferees 
were never assembled to discuss this or any of the elements of the 
final conference agreement.
  For these reasons, I chose not to sign the conference report on this 
legislation. We could have done better on expatriation, and on mental 
health parity. Even so, I am prepared to vote for this legislation 
because its central features--the health insurance reforms--are 
important and overdue. I congratulate Senators Kennedy and Kassebaum 
for their hard work and persistence on this legislation, and I urge its 
adoption.
  The Presiding Officer. The Senator from Kansas.
  Mrs. KASSEBAUM. Mr. President, I know the Senator from Iowa, [Mr. 
Grassley] had wished to speak, because the State of Iowa has done some 
very innovative things regarding the question of health care insurance, 
but we are running out of time. He is going to address his full 
statement and make it a part of the Record at some point as we find 
time at the close of this debate. I would like to right now, though, 
yield 15 minutes to the Senator from New Mexico [Mr. Domenici].
  The PRESIDING OFFICER. The Senator from New Mexico is recognized for 
15 minutes.
  Mr. DOMENICI. Mr. President, I say to my friend from Massachusetts, 
we may not agree on the issues we just spoke of, but we agree on the 
issue I am going to speak of, and for that I thank him.
  Mr. President, I say to my fellow Senators, about 8 months ago, I 
went to a meeting in Gallup, NM, at an Indian hospital. I noticed 
sitting in the audience a very, very handsome Indian woman. My guess is 
that she was probably 55, 58 years of age. And she stood up and said, 
``Thank you, Mr. Domenici.''
  I said, ``What are you thanking me for?'' And she began to cry.
  When she finished, she said, ``Thank you for asking the Indian Health 
Service to give the modern drug called Clozaril to my schizophrenic 
son. He has been catatonic for 22 years. And thank you for giving him 
back to me. He is home now, and he is performing on almost a hundred 
percent in my house.''
  Frankly, I did not deserve the accolade, but I was on a TV show just 
yesterday about the issue of ``should we stop discriminating against 
people like that young Indian boy who is not on Indian health 
coverage,'' and a representative of business said to me, ``Well, you 
just want to provide money for all these ladies that want to go see 
their shrinks.''
  To which I said, ``You have not read my amendment, and most of the 
mentally ill people that I am seeing and have become friends with over 
the last 15 years, whose children have manic depression, deep 
depression, schizophrenia or one of the serious, serious mental 
diseases which are almost universally accepted as being diseases of the 
brain--you would not be talking about shrinks when it comes to the kind 
of treatment and care that psychiatrists, who have already disavowed 
Freud''--and I might say to my friend from New York, I am not reluctant 
to tell the psychiatrists in America that I believe Freud is dead and 
that the treatment of mentally ill people does not require 50 visits to 
the ``shrink,'' so to speak, but it does require that qualified doctors 
and health care centers diagnose and treat the severe mental illnesses 
as diseases.
  All we ask for in this bill, of all the things we could have asked 
them to provide, we asked for two things, and listen carefully, I say 
to my fellow Senators, because we are going to do this sooner or later. 
We said, if you provide mental health coverage, you must provide the 
same lifetime coverage as you do for everybody else covered, the same 
total lifetime coverage and the same annual coverage. That is all we 
asked for.
  We did not ask, nor did we say, that for those who are worried about 
the shrink, we did not say that you had to cover that. In fact, it is 
clear that they could require any kind of copayments they want. They 
could require a number of visits being exempt from coverage, if that is 
what worries them. All we said is if you cover them, don't discriminate 
against them, and then when they are in the fourth year of a serious 
illness say, ``Oops, there's no more coverage, we only gave you $50,000 
worth of lifetime coverage.''
  Incidentally, that is ordinary for American insurance today. While 
they cover the other ones for $1 million if you have cancer or heart 
trouble or you have a transplant--$1 million--in the same policy, they 
cover mental illness, however, $50,000 for your life. If that is not 
discrimination, I have never seen it, and if that is not a denial by 
our community of a reality and hiding your head, then I cannot believe 
it.
  I honestly believe that the mentally ill should get more protection 
than these two components of what we offered the conferees by way of 
resolution, and I might say, none of my remarks are directed to Senator 
Kennedy, Senator Moynihan, or Senator Kassebaum. I believe we would 
have received this treatment had they been the ones making the 
decision.

  But I will say to the American business community, you have some 
lobbyists representing you that it seems to me, at least, when they 
once get a set of facts in their heads, they forget to use their 
brains. And so what they say is, what Domenici offered with Wellstone 
on the floor cost too much.

[[Page S9508]]

  And then I say, ``Did you look at what we offered in compromise?''
  ``What compromise?'' While they have been saying in the newspapers it 
will bankrupt them.
  Frankly, there are many great American businesses toward which these 
comments are not directed. There already are major ones that cover with 
full parity, not just parity of annual and lifetime caps, and I do not 
address these remarks at them. But I submit, you have to face up to 
reality and get away from the fear that comes with talking about people 
who have severe mental illness and the trepidation and consternation. 
Just look around your neighborhood, for the CEO's of American 
companies, look among the hierarchy of your company, and if you don't 
find somebody who has a relative with schizophrenia or severe manic 
depression or severe clinical depression or bipolar illness, then you 
are a rare, rare exception to the society of the United States, because 
that is the way it really is.
  I have been privileged to meet thousands of relatives of the severely 
mentally ill of this Nation. We think at any given time there are 
between 3 and 5 million people with severe illnesses. Frankly, I want 
to send them a little ray of hope. I don't want them to think we are 
going to remain as we have been forever.
  So, today, with the Senate's permission, I ask unanimous consent that 
I be permitted to send a bill to the desk and that it be reported to 
the appropriate committee. I do not ask for any special favors today. 
But it is very simple.
  All it says is if employers and the insurance community cover the 
mentally ill, they can set whatever standards they want. They can deny 
coverage for the first 10 visits to a medical doctor psychiatrist if 
they choose, but they cannot say that your total lifetime coverage is 
any different than the coverage for the other more well-known and 
longer defined physical ailments, and the same with the annual payment.
  That is the bill I am sending, with my observations. This is for 
Senator Wellstone and about eight other Senators who join me, and 
Senator Moynihan joins now. I am asking Senator Kassebaum and Senator 
Kennedy to hold hearings as soon as we come back in September, and I 
believe they are going to.
  That means we are going to bring this little bill out of that 
committee, hopefully with their support, and we are going to present it 
again, even in September, when we are trying to get out of here.
  So for those in the business community who think they have seen the 
last of this, just get those fellows ready for September so they will 
have something to do around here.
  Mr. DODD. Will my colleague yield?
  Mr. DOMENICI. Yes, I yield.
  Mr. DODD. Will you allow the Senator from Connecticut, the insurance 
capital of this country, to be listed as a cosponsor?
  Mr. DOMENICI. You have it.
  Mr. KENNEDY. Will you be kind enough to include me as a cosponsor?
  Mr. DOMENICI. Senator Kennedy, Senator Grassley, Senator Kassebaum, I 
am delighted.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Mr. President, I send the bill to the desk and ask it 
be referred to the appropriate committee.
  The PRESIDING OFFICER. Without objection, the bill will be received 
and will be referred.
  Mr. DOMENICI. I would be remiss if I did not thank a lot of Senators, 
because many have been asked about this and many are going to support 
this.
  I want to say this is a great bill, the bill we are going to pass 
today.
  I just want to make one reminder again to those who oppose the bill 
that I sent to the desk. There are some representing the business and 
insurance who say they do not want any mandates. What is the bill we 
are passing today? What is the bill we are passing today? Is it not a 
mandate? Of course it is a mandate.
  Let me tell you, nobody is even talking about the cost anymore 
because it is so right. But it will cost a lot more than what that 
little bill Domenici sent to the desk will cost. To spread the risk of 
preexisting conditions is going to cost a lot of money, but we think it 
is the right thing to do. Somehow they do too, the business community 
and the insurance community. So let me now yield the floor and say, I 
am very, very grateful for the chance to present this again, soon. And 
I thank Senator Kassebaum for yielding me time.
  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I just want to join what I know is the 
overwhelming number of Members here in saluting the Senator from New 
Mexico as well as our good friend from Minnesota, Senator Wellstone. I 
think many of us still remember the eloquence with which the Senator 
made his impassioned plea when the Senate debated his amendment. He has 
been committed and dedicated to the sensible and responsible health 
policy that includes mental illness. And he is absolutely correct.
  I look forward to working closely with the Chair, Senator Kassebaum, 
to move that legislation out and look forward to standing side by side 
with him as we hopefully will pass that legislation. I think he has 
done a great service for the Senate. I join in commending him for his 
eloquence, as well as Senator Wellstone. I see the Senator from West 
Virginia, Senator Rockefeller. I yield the Senator 3 minutes.
  The PRESIDING OFFICER. The Senator from West Virginia is recognized 
for 3 minutes.
  Mr. ROCKEFELLER. I thank the Senator from Massachusetts.
  I just simply say this. This is not small, this legislation, Mr. 
President. It is not universal health coverage, but it is going to 
affect between 25 and 30 million Americans, and about 300,000 West 
Virginians. And it is extraordinary that it is being done.
  Usually, in the past, we have passed a bill or tried to, and then 
failed. We have backed away from action. This year we did not. Because 
of Senator Kassebaum and Senator Kennedy, we came forward and we took 
on a hard job. And they did it. And they deserve enormous praise.
  It means that I am going to be able to call Karen McPeak, who I spoke 
with today. She and her husband have two children, two boys. They have 
hepatitis and hemophilia. They were making $80,000 a year between them, 
had two cars, a house, savings, the rest of it.
  Because they could not get their two boys insured because they had 
preexisting conditions, they went through their savings, they then lost 
their house, they lost both their cars, they then gave up their jobs. 
They went on Medicaid in order to take care of their two sons, all of 
this because they are good parents. And that is the only way open to 
them in the system today.
  This bill will change forever what will happen with the McPeak 
family. The children will be covered. The parents will be able to go 
back to the life that they knew. This couple is only one of those in 
West Virginia. And I rejoice along with them.
  I close by simply saying this. I can report back to West Virginians 
now that we have branded a preexisting condition something which 
insurance companies will insure. The portability of health insurance 
from one job to another is something which we will vote on and make the 
law of the land.
  I know there have been difficulties. I know there have been disputes. 
But today I think it is important to celebrate what it is that we in 
fact have actually done. And then tomorrow let us move on to the 
broader field of universal health care coverage in one way or another. 
But let us do that.

  I have no way of expressing my respect to the Senator from 
Massachusetts and the Senator from Kansas, both of them giants on this. 
And America and West Virginia are better off. And I am very proud to be 
associated with voting for this bill. I thank the senior Senator from 
Massachusetts and yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY. I yield 3 minutes to the Senator from Connecticut.
  The PRESIDING OFFICER. The Senator from Connecticut is recognized.
  Mr. DODD. Thank you, Mr. President.
  Mr. President, let me begin by quickly commending our colleague from 
New Mexico, who has now left the floor. But

[[Page S9509]]

I just want to associate myself with his remarks and, as he mentioned 
at the time, to become a cosponsor of his bill. And I deeply appreciate 
his efforts and the efforts of Senator Wellstone on behalf of the 
mentally ill in this country and their families.
  I am sure I speak for many of our colleagues here when we commit to 
him and others that worked so hard on this that this will be a 
priority, and as the Senator from New Mexico stated so eloquently, it 
will happen, and will pass. We regret that it is not happening today.
  Second, Mr. President, while we are still a number of weeks away from 
this Congress adjourning sine die, I want to use the opportunity here 
today to say to our colleague from Kansas--and I do this with some 
reluctance because I do not want her career to be placed in jeopardy by 
having the general chairman of the Democratic National Committee 
commending her too flowingly and put her in some jeopardy with her 
constituency--but this is yet one more example of her leadership, this 
piece of legislation.
  It is entirely fitting and proper that, in fact, her name is so 
closely associated with this bill, as it has been with so many pieces 
of legislation over her career that have benefited so many millions of 
people in this country and abroad. I am very proud of the fact that 
this last day before we adjourn for several weeks that we are 
completing a piece of legislation that bears her name, and that 
millions of people, millions and millions of people, will be benefited 
as a result of this effort.
  Second, Mr. President, it is hard to mention the subject of health 
care at any point over the last three decades and not mention the name 
of the cosponsor of this bill. For more than 30 years every single 
major effort, every single major effort that I can think of that 
involved improving the quality of health care for Americans has borne 
the name of Edward M. Kennedy.
  It is certainly no accident that this piece of legislation bears his 
name as well. It is not an abstraction, this effort. He knows painfully 
with his own family and children how difficult these issues can be. I 
am just proud that this body finally acted after so many months, months 
that in my view should not have been wasted in dealing with an issue 
that should have joined every Member of this body, regardless of party 
and ideology, to support the simple propositions that people with 
preexisting conditions, that people who lose jobs ought to be able to 
carry with them the basic kind of health care that would relieve them 
and their families of the stark fear of being caught in the cracks, of 
being uncovered, at the time of a medical crisis.
  It was 31 years ago, Mr. President, that Medicare became the law of 
the land. Obviously, that piece of legislation was in many ways far 
more comprehensive than the Kassebaum-Kennedy legislation. But there is 
a similarity between these two proposals and bills. By the stroke of a 
pen, Lyndon Baines Johnson, on that day in 1965, by the stroke of a 
pen, he literally placed millions and millions of people beyond the 
fear of a health care crisis. The mere stoke of his pen enfranchised 
millions of people and protected them from health care crises.

  Today when we pass this bill--and within days or hours, I hope, the 
President of the United States, President Clinton, who has been such a 
strong supporter of this effort, will sign this legislation into law, 
and 25 million Americans immediately will be protected, immediately 
protected. There is no requirement that we go through a lot of agency 
activity and bureaucracy and regulations. But merely by passing this 
law and signing his name, we will relieve the fear and burden for 25 
million Americans. And for that I say, a deep sense of thank you to 
Senators Kassebaum and Kennedy for their efforts and their battle. 
Thank you.
  Mrs. KASSEBAUM. Mr. President, I very much appreciate the thoughtful 
comments of the Senator from Connecticut who has been a very dedicated 
member of the Labor Committee, who has worked to get this accomplished 
from the very beginning. I appreciate his valuable support and efforts.
  I now yield 3 minutes to the Senator from Wyoming, Senator Simpson.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized for 3 
minutes.
  Mr. SIMPSON. Mr. President, I thank my colleague from Kansas who came 
here when I did. We exit together as we entered together. It has been a 
great privilege to serve with this remarkable woman and see the 
legislative history that she leaves; and my friend from Massachusetts, 
too, who I have enjoyed thoroughly in my time here, even though 
certainly there are times when he tests every bit of my patience, and 
on more than many occasions. But I will miss him, too. I commend them 
both.
  I just want to briefly follow up on the comments of the Senator from 
New Mexico. I had made some comments yesterday about my disappointment 
with one aspect of this conference report. We have had such a 
productive week here, and on so many things. But I do feel a sense of 
real hollowness over the failure to include even some modest version of 
the mental health parity in this bill.
  I am a cosponsor and I spoke on the bill originally when it passed 
here 68-30, a sweeping definition there, when it was approved. Senators 
Domenici and Wellstone worked doggedly trying to assure that at least 
some limited form of that amendment came through this process. It had 
been my privilege to assist them in that cause. They have worked very 
hard.
  The events of the last few days show again that the wall of 
discrimination against the mentally ill is very real. It is still too 
powerful for any of us to overcome, apparently. That is a very sobering 
fact.
  I know my colleagues will not give up this fight, none of us will, 
even though this singular battle has been lost. I pledge I will 
continue to assist them. There is a great deal of work to be done in 
educating and enlightening the American people on the realities of 
mental illness.
  It is troubling and disturbing to me that there still continues to be 
this stigma associated with mental illness. The unspoken message here 
is that people afflicted with mental illness are somehow not as worthy 
of treatment as those afflicted with cancer or heart disease or other 
physical ailments. No one in this Chamber would consciously ever say 
such a thing, but this is the message we are sending through our 
actions.
  That is why it is so important for this Congress to revisit this 
important issue. We should certainly not let this bill and its silence 
with respect to mental health be any kind of final word on this issue. 
We will revisit this one in September.
  I commend my colleague from New Mexico, and again thank Senator 
Kassebaum and Senator Kennedy for this remarkable work product which we 
all deeply appreciate.
  Mr. KENNEDY. Mr. President, how much time remains?
  The PRESIDING OFFICER. The Senator has 5 minutes and 19 seconds.
  Mr. KENNEDY. I yield 3 minutes to the Senator.
  Mr. CONRAD. I thank the Chair.
  Kennedy-Kassebaum--what a team. What an achievement--25 million 
people protected because, working together in a bipartisan way, they 
have broken the gridlock here in Washington.
  Nancy Kassebaum, who always exhibits grace, civility, and decency, 
and Ted Kennedy, an absolute lion in this Chamber on whatever issue he 
decides to weigh in on, thank goodness they weighed in on these issues 
of portability, so the people, when they change jobs, can take their 
health insurance policy with them. And preexisting conditions--millions 
of Americans will no longer be precluded from coverage because of a 
preexisting condition. This Senate should thank you both. America 
should thank you both.
  I would be remiss if I did not register disappointment, as well, 
because we did pass on the floor of the U.S. Senate by a vote of 68 to 
30, a sweeping change, to say that those who suffer from mental illness 
will not be discriminated against. A mental illness should be treated 
the same way as a physical illness.
  Mr. President, 68 to 30, this Senate spoke with their votes and said, 
``No more discrimination.'' Yet, when we look at what came back from 
conference, through no fault of the Senator from Massachusetts and 
through no fault of the Senator from Kansas, what came back from the 
conference

[[Page S9510]]

committee on mental health is the square root of zero--nothing, not 
even the most modest achievement, not even the most modest advancement.
  I am very pleased to join Senator Domenici and Senator Wellstone in 
cosponsoring a bill that seeks to address this question when we return 
in the fall. Let me just say again, Senator Kennedy and Senator 
Kassebaum, I am confident, will be lions in that effort, as well.
  I thank the Chair. I yield the floor.
  Ms. MIKULSKI. Mr. President, I rise in strong support of the Health 
Insurance Reform Act. There are three reasons why I support this bill. 
It makes health insurance portable--people can take it with them from 
job to job. It provides health insurance to people with preexisting 
medical conditions. And it makes health insurance more available to 
working Americans. I am pleased to vote for this bill.
  Health insurance is a priority for Maryland's families. It's a top 
priority for me. I strongly support this commonsense health insurance 
reform. It's a safety net for working Americans and their families. 
This bill ends ``job lock.'' Working Americans won't be afraid to 
change jobs. They no longer have to fear that they'll lose their health 
insurance coverage if they do.
  I know a mother in Baltimore who supports her family in a 
manufacturing job. Her husband stays home and cares for their disabled 
child. She has been offered a higher paying job. But she can't take it. 
I think that's outrageous. She knows if she changes jobs that her son 
will lose the health coverage he so desperately needs. This bill is 
good news for people like her. She could make that job change under 
this bill.
  This bill helps people who have preexisting medical conditions. They 
won't be penalized any longer by insurance companies. They can now get 
health insurance if they have a disease like diabetes. I am pleased 
that the bill has the potential to help millions of women and their 
families. The legislation will help a woman who starts a new job with 
an employer who provides health insurance.
  Under the Health Insurance Reform Act, a woman or her family can't be 
denied insurance coverage. She and her family can't be denied coverage 
for a preexisting condition. A woman who is pregnant will get immediate 
coverage for pregnancy care even if she is already pregnant. Her 
newborn or adopted child will also receive health insurance coverage. 
This just isn't good for families. It makes good business sense.
  The bill makes health insurance more available to working Americans. 
It goes along way to eliminating barriers to coverage. There are more 
than 40 million Americans without health insurance. More than 1 million 
working Americans lost their insurance over the last 2 years. Workers 
who are self-employed will be able to take a greater tax deduction for 
health expenses. It treats long-term care expenses as medical expenses 
for the purposes of tax deductibility. This bill helps those who 
practice self-help.
  I was disappointed that we were not able to enact comprehensive 
health insurance reform. After that debate came to a close, I pledged 
to continue the fight to reform health care--day after day and month 
after month. This is an important first step in that direction. I thank 
my colleagues Senator Kassebaum and Senator Kennedy for their hard work 
in bringing us this far. But didn't get here without tremendous 
struggle.
  Despite broad bipartisan support, this bill has been held up for 
weeks and months. But we persevered. I wanted to get this bill passed 
this year. And now we have done that. We have won the day. And helped 
many Americans gain accessibility and portability to health insurance 
coverage.
  There is much more that I would like to be able to do to make 
insurance coverage affordable, accessible, portable and undeniable. I 
would like to see coverage for long-term care. I would like to see a 
comprehensive benefit package for women and children. But this is a 
very important step. We have a tremendous opportunity to improve the 
lives ofmany Americans. I am pleased to support this bill.
  Mr. PELL. Mr. President, I am delighted that the Senate will today 
approve the conference agreement on S. 1028, the Health Insurance 
Reform Act. Since the House of Representatives has already acted 
favorably on this legislation, it will be only days before President 
Clinton can sign this important legislation into law. This new law will 
have been a very long time in coming.
  We need not review the circuitous path that these health reforms have 
taken since the Clinton administration took over in 1993. But I believe 
it is fair to say that even these limited reforms could never have 
happened without the leadership of the President and First Lady, who 
brought into virtually every American home their passionate and 
persuasive pleas to reform our Nation's health care system. And without 
effective and devoted legislative warriors, led over the decades by 
Senator Kennedy and joined in recent years by our distinguished 
Chairwoman, Senator Kassebaum, I believe that we would not be here 
today passing this bill.
  Mr. President, as my 36 years on the Senate Labor and Human Resources 
Committee draw to an end, I could not be more pleased that we will 
finally see the fruition of so many years of work on health insurance 
reform issues. The bill before us will correct many of the flaws of our 
current system, including enhancing portability of insurance from job 
to job, and limiting the current practice of permitting exclusions for 
preexisting medical conditions. But, as I have said many times before, 
this bill does not accomplish many other things that need to be done. 
Most notably, the bill does nothing to make insurance more affordable 
to people who need it, including those with preexisting medical 
conditions. Just today, I got a phone call from a constituent from 
Pawtucket, RI, who has a thyroid condition and who wants to know 
whether under this legislation, her insurer will be able to charge her 
more. I regret very much that I will have to tell her that her insurers 
can, indeed, charge her more. And I regret very much that I will have 
to report to the many Rhode Islanders who support the Domenici-
Wellstone mental health parity provision that opposing forces prevailed 
in deleting this provision from the conference agreement.
  Health care reform being the lightning rod issue that it is, I 
recognize--and I hope that the American people recognize--that while 
this bill represents only incremental change, it is an important step 
forward. We all know that much, much more needs to be done if every 
American is to have access to high quality, affordable health care. And 
I hope that my colleagues who will remain in the Senate and that those 
who succeed me will take up the challenge as early as possible in the 
next Congress.
  In the meantime, Mr. President, I want to thank all of my colleagues 
on the Senate Labor and Human Resources Committee, who approved this 
bill unanimously just 1 year ago. And I would like to take this 
opportunity to thank the many committee staffers who assisted us so 
ably in crafting this important legislation. I offer a special tip of 
the hat to Senator Kennedy's senior health adviser, David Nexon, who 
has been of such great assistance to me and to my staff over these many 
years.
  I look forward to voting for this legislation and even more, to its 
becoming law.
  Mr. COHEN. Mr. President, in the spring of 1995, the Medicare 
trustees, on a bipartisan basis, issued an urgent warning that the 
Medicare hospital trust fund will go broke by the year 2002, unless 
major changes are made to protect the system. Since that alarm was 
sounded, the Congress has been wrestling with ways to bring Medicare 
spending under control, in order to forestall impending bankruptcy and 
to strengthen Medicare for both current and future beneficiaries. This 
year the situation is even more critical. The 1996 trustees' report 
projects bankruptcy for the trust fund by the year 2001.
  I stated at the time of the trustees warning that, at a minimum, we 
should pass legislation to crack down on the fraud and abuse that 
drives up the costs of health care for senior citizens and taxpayers. 
Estimates are that Medicare loses over $18 billion each year to fraud 
and abuse, and that fraudulent schemes cost the entire health care 
system and our economy as much as $100 billion each year.
  Today, we are reaching a historic milestone by passing one of the 
most comprehensive and tough anti-fraud

[[Page S9511]]

packages ever contemplated by Congress. It has been a long road--over 3 
years to be exact--but as the author of the antifraud and abuse 
provisions I am proud that this Congress, in a bipartisan way, did the 
right thing.
  Specifically, my proposal creates tough new criminal statutes to help 
prosecutors pursue health care fraud more swiftly and efficiently, 
increases fines and penalties for billing Medicare and Medicaid for 
unnecessary services, over billing, and for other frauds against these 
and all Federal health care programs, and makes it easier to kick 
fraudulent providers out of the Medicare and Medicaid program, so they 
do not continue to rip off the system. Most importantly, the bill 
establishes an antifraud and abuse program to coordinate Federal and 
State efforts against health care fraud, and substantially increases 
funding for investigative efforts, auditors, and prosecutors.
  In early 1993, I first embarked upon writing an antifraud bill. This 
was based on the recommendations of a health care fraud task force set 
up by the Bush administration and on an investigation by the Senate 
Special Committee on Aging, which I chair. That legislation became the 
basis for the fraud and abuse section of all the Republican health care 
reform bills proposed in 1993 and 1994 as well as for the 
administration's proposal. It was one of the few truly bipartisan 
issues contemplated during that contentious debate. In late 1993, the 
criminal provisions of my bill passed the Senate unanimously as part of 
the crime bill but were deleted during conference. Last year, my 
proposal passed Congress as part of the budget reconciliation bill and 
were also used as framework by the administration in its budget 
reconciliation proposal. As we all know, the President vetoed that 
bill. Today, it stands as an integral part of the Kassebaum-Kennedy 
health insurance reform proposal, finally on its way to the President 
for signature.

  Health care fraud is an equal opportunity employer that does not 
discriminate against any part of the system. All Government health care 
programs--Medicare, Medicaid, CHAMPUS, and other Federal and State 
health plans, as well as private sector health plans, are ravaged by 
fraud and abuse.
  Similarly, no one type of health care provider or provider group 
corners the market on health care fraud. Scams against the system run 
the gamut from small companies or practitioners who occasionally pad 
their Medicare billings because they know they'll never get caught, to 
large criminal organizations that systematically steal millions of 
dollars from Medicare, Medicaid, and other insurers. According to the 
FBI, health care fraud is growing much faster than law enforcement ever 
anticipated, and even cocaine distributors are switching from drug 
dealing to health care fraud schemes because the chances of being 
caught are so small--and the profits so big.
  The inspector general of the Department of Health and Human Services, 
for example, has cited problems in home health care, nursing home, and 
medical supplier industries as significant trends in Medicare and 
Medicaid fraud and abuse. Padding claims and cost reports, charging the 
Government and patients outrageous prices for unbundled services, and 
billing Medicare for costs that have nothing to do with patient care 
are just a few of the schemes that are occurring in these industries.
  It is time that we crack down--and shut down--these schemes that are 
bilking billions of dollars from Medicare and other health care 
programs. If we have asked honest health care providers to take cuts in 
reimbursement and asked Medicare and Medicaid recipients to pay more 
out-of-pocket costs to bring spending under control, we have an 
absolute duty to ensure the American public that their health care 
dollars are not lining the pockets of criminals and greedy providers 
who are manipulating the system through fraud and abuse.
  The proponents of strong anti-fraud proposals responded to a mandate 
from beneficiaries that we need to control spending and ease the burden 
on taxpayers. The anti-fraud provisions in the Kassebaum-Kennedy bill 
did precisely that in a reasonable, measured manner that did not 
infringe on personal liberties nor penalize innocent mistakes.

  The fraud provisions substantially mirror existing fraud statutes and 
are designed to give enforcement more precise tools to protect 
consumers against fraud and abuse. The proposal simply provides 
adequate resources for prosecutors and investigators, long strapped by 
budget cuts and under staffing, to go after serious patterns and cases 
of abuse. The bill closes loopholes in current law and provides 
criminal penalties for a defined set of serious and egregious 
violations, such as embezzlement and misappropriation of assets. 
Prosecutors would continue to have an extremely high burden to prove 
that the violations were committed knowingly and willfully.
  Despite such a reasoned approach, we were inundated at the last 
moment by scare tactics and blatant mischaracterizations. There were 
full page ads depicting a doctor shackled in stocks claiming that 
doctors would land in jail for committing honest mistakes. There were 
editorials that grossly distorted the intent and scope of the 
provisions in a fashion that minimized the very real threat that fraud 
poses to our health care system and, indeed, to the solvency of 
Medicare. I am sympathetic to the concerns of physicians and other 
health care providers that the practice of medicine has become 
excessively regulated. I also believe that physicians raise legitimate 
concerns that too often managed care plans manage costs alone at the 
expense of quality of care for patients and unduly limit physicians' 
decisions on how to best treat their patients. To blame all of these 
trends on the health care fraud provisions, particularly at the last 
stage in the negotiation process, was misguided and inaccurate. I am 
proud that my Republican and Democratic colleagues were not intimidated 
by these falsehoods and proceeded on a straight path to passing strong 
legislation.
  As the author of these provisions, and as someone who has been 
involved in the negotiations of these provisions over a 3-year span, 
there are a couple of issues I wish to clarify as we debate final 
passage of the conference report.
  First, the fraud and abuse control program established in the bill 
contemplates increased collaboration between the Department of Justice 
and the Office of the Inspector General [OIG] in health care law 
enforcement. It was not my intention, however, to expand the legal 
responsibility of the Office of Inspector General to private health 
plans. The jurisdiction of the OIG remains as it exists today, with 
only those augmentations of its authority specifically authorized in 
the bill.
  Second, it was my intention that the costs covered by the funds 
appropriated to the Federal Bureau of Investigation provided for in the 
mandatory appropriation section include those associated with the 
hiring of additional agents and support resources as supplemental 
funding to address the burgeoning health care fraud problem.
  Third, the moneys from the control account which are directed to the 
Office of the Inspector General are primarily intended to increase the 
ability of that office to investigate health care fraud and ensure that 
Medicare funds are properly spent. If the Office of the Inspector 
General is assigned the duty of preparing the advisory opinions, I 
would expect the Secretary and the Attorney General to consider a 
specific grant of funds for this purpose from any discretionary moneys 
in the control account as an addition to the amounts already available 
to the OIG. We would not want to see a reduction in the effort to 
investigate fraud, in order to provide staff for the advisory opinion 
function.
  Finally, as the author of the original enhanced guidance to providers 
section, I would like to make some affirmative and declarative 
statements on the actual advisory opinion language. Although advisory 
opinions are an appropriate means of giving guidance to the industry on 
some issues, it is clearly unwise to have the agencies in the position 
of opining on the intent of the person requesting the opinion. To have 
a Government agency make an independent determination of what is in 
someone's head, based solely upon what that person chooses to tell the 
agency, is a highly questionable Government function.
  That is why I want it clearly stated for the record of debate what 
has been

[[Page S9512]]

stated during conference and indeed what has been stated by advisory 
opinion proponents for the last 3 years that this issue has been 
debated. Advisory opinion advocates have stated definitively and 
consistently in conference and during many lengthy negotiations that 
the advisory opinion provision does not require a finding of intent. 
Not only do I adhere to that view, I will do everything possible to 
ensure while I am still here, and while this provision will be reviewed 
prior to implementation by the agencies, that such an expectation is 
followed. I will also ensure that after I am gone those who have 
oversight authority here in Congress, and those who are in the 
leadership, make sure that such an expectation is followed.
  I know that the Attorney General has spoken to the Speaker of the 
House, the Senate Majority Leader, the chairmen of the House and Senate 
Judiciary Committees as well as numerous members of the Ways and Means 
Committee and Finance Committee about her concerns relating to the 
issuance of advisory opinions. None of the existing advisory 
opinion mechanisms available to the Federal Government require an 
independent determination of intent. To reiterate, statements were made 
by the conferees that this was the expectation here as well. I, 
therefore, expect the agencies to design a process for advisory 
opinions which does not require such a determination. I also expect 
that this advisory opinion process will sunset 4 years after the date 
of enactment of this bill as is required by the bill.

  Mr. President, in conclusion, I would like to applaud members for 
this major antifraud victory. According to the Congressional Budget 
Office, these provisions will yield billions in scorable savings. I am 
convinced that the long-term savings are much greater, and that 
billions more will be saved once dishonest providers realize that we 
are cracking down on fraud, and that they can no longer get away with 
illegally padding their bills to pad their own pockets. For years, I 
have been saying that Federal law enforcement often feel like the mouse 
has outsmarted the mousetrap, because they lack adequate tools and 
resources to penalize egregious cases of fraud. While I know that this 
bill does not solve this enormous and complicated problem, I can state 
today that the mousetrap has sprung.
  I would like to thank Senators Roth and Dole, for all of their 
steadfast support and assistance over the years; Alec Vachon of the 
Finance Committee and Harry Damelin of the Permanent Subcommittee on 
Investigations, for all their hard work and perseverance; Sue Nestor, 
formerly of the Finance Committee, for all her hard work before she 
left the Senate; and Helen Albert, Mary Gerwin, and Priscilla Hanley, 
of my staff, for their dedication to passage of this important 
legislation.


                          mental health parity

  Mr. INOUYE. Mr. President, when we in the Senate unanimously passed 
the health insurance reform bill in April, we included an amendment 
offered by Senators Domenici and Wellstone that provided for parity 
coverage for mental health services.
  I was proud of our vote. We did the right thing by ensuring that 
persons who suffer mental illness are treated fairly by insurance 
companies.
  The conferees stripped the Domenici-Wellstone amendment out of the 
bill. However, by our April vote, this Chamber made a commitment to 
fairness in insurance coverage for persons with mental illness.
  The health insurance reform bill is about fairness. Just as the bill 
now prevents insurers from dropping people's coverage when they change 
jobs or for other reasons, the bill should also have prevented insurers 
from discriminating against persons suffering mental illness. Leaving 
the Domenici-Wellstone mental health parity amendment out of the bill 
is wrong.
  I know that the business and insurance communities raised some 
concerns about the cost and impact of the Domenici-Wellstone amendment 
with the conferees. I also know that Senators Domenici and Wellstone 
answered every concern raised.
  While I view the CBO estimate for the cost of the original amendment 
as extremely reasonable, I understand that Senators Domenici and 
Wellstone offered a compromise to the conferees that would have 
provided parity coverage only for annual and lifetime caps.
  This compromise slashed the cost of the original amendment by 90 
percent. CBO determined that the compromise would increase private 
insurance premiums by four-tenths of 1 percent, of which employers 
would pay only sixteen one-hundredths of 1 percent.
  My fellow colleagues, these figures are so low, that employers could 
meet this slight premium increase by raising their deductible by a mere 
$5 per year.
  I understand that insurance and business interests also raised 
concerns about the loss of workers' insurance due to the compromises' 
cost. Considering CBO's extremely low cost estimate, no one could 
possibly contend that passage of the compromise would cause workers to 
lose their insurance.
  The compromise went even further. It permitted businesses to deliver 
mental health services through ``carveout'' arrangements and to adjust 
deductibles, copayments, and visit limits for mental health services as 
they saw fit. Small businesses would have been completely exempt from 
the parity standard.
  I believe that Senators Domenici and Wellstone should be commended 
for developing a compromise that the conferees should have accepted.
  Now, we have made a promise to persons suffering mental illness in 
this country. We have promised they will treated fairly, just as this 
bill promises fairer health care coverage for other Americans.
  I will personally join with Senators Domenici and Wellstone to ensure 
that we make good on our promise.
  Mr. GREGG. Mr. President, to our citizens outside of the beltway, 
Washington politics seem to be the cause of all that ails us. The 
disease is easy to diagnose: Washington politics getting in the way of 
real cures. However, I am pleased to stand up today and say that 
maybe--just maybe--the games have paused as Congress finally passes 
this incremental step in health care reform.
  Health care reform. Three words that have become part of many's 
vocabulary over the last 3\1/2\ years. Obviously, health care reform 
efforts have been going on since the delivery of health care became 
something of an organized system. But Federal health care reform has 
never seemed so necessary as it has in the past few years, and so 
viable as it is right now, for two critical reasons.
  First--because the American public has been bombarded with rhetoric 
about all of the things that are wrong with their health care system.
  Obviously, the U.S. health care system is not without flaws, but I 
think it is important that the treatment not be worse than the 
ailments. The ``shot in the arm'' posed by the Administration during 
the 103rd Congress in 1993 and 1994 was roundly rejected by the 
American public. The Health Security Act, drafted by the First Lady and 
her team of elite health care reform gurus, was 1,342 pages of promises 
for ``universal coverage'' for American citizens under a federal 
program of limited mandated benefits, price controls and tax increases. 
The tome sent up to Capitol Hill prescribed that centralized 
bureaucracies run this national program, that the Federal Government 
regulate medical schools, and that Washington decide what 
pharmaceuticals and medical procedures would be paid for.
  This proposal would have resulted in a further disconnect between the 
patient and the payer. We have seen through other Federal programs that 
separating those making demands on the system from those paying for the 
care ends up both driving up costs and limiting the availability of 
services. This is not what the American public had in mind as it got 
involved in asking Washington for positive change in federal policies.
  Once the glitter and hype was peeled away, Americans realized 
this proposal meant no choice in benefits or providers, higher taxes to 
generate revenue that would be shifted to pay for business subsidies 
and the like, and the inevitable result of government rationing of 
health care services. After a year of intense debate, the Health 
Security Act died a painful, but appropriate, death.

  Second, having determined during the debate over President Clinton's 
Health Security Act what the American public does not want, we were 
given the opportunity to provide the people with what they do need. And 
what they need is the Health Insurance

[[Page S9513]]

Portability and Accountability Act of 1996--the legislation that has 
become known as the Kassebaum-Kennedy bill.
  This legislation grew out of the testimony that was heard in 
countless Senate hearings on health care reform. It grew out of the 
recognition that some basic flaws in the regulation of health care 
caused American families monumental problems: workers are unable to 
carry their health insurance from one job to the next--portability. 
Individuals are subject to unfair discrimination in their access to 
health insurance if they have a medical condition that has required 
treatment before they joined that health plan.
  These are simple, clear concepts. We know how to address them. 
However, we also know that it took us 3 years of policy development to 
get to the point where there was a bill that was appropriate in scope, 
and met the majority of needs our constituents told us they had. A long 
and arduous process had resulted in legislation that also obtained 
support from our Democratic colleagues--it looks as though we are close 
to allowing policy to triumph over politics.
  This legislation was further improved with cultivation. During 
consideration of the bill on the Floor of the Senate, Members decided 
to act on some other ideas that had been long discussed as part of 
health care reform on both sides of the aisle. Medical savings accounts 
are not a new idea. More favorable tax treatment of long term care 
insurance is not a new idea. Increasing the self-employed tax deduction 
to 80% to provide equity is not a new idea. But these are all important 
ideas, that have received support on both sides of the aisle during the 
last several years of debate.
  Why are important aspects of health insurance reform like MSA's 
suddenly so controversial? Because once again Washington politics got 
in the way of good policy work. Some Washington politicians have 
decided it is more important to score a political victory than to pass 
the type of health care policy that the American public wants: policy 
based on freedom of choice; policy that ends discrimination and 
promotes fairness and equity; and policy that forges a stronger 
relationship between patients, their physicians, and those who are 
payers for medical services, whether that payer be the individual 
controlling their own health care dollar, the Government, or an insurer 
who has offered a plan tailored to best meet the consumers' needs.
  Mr. President, I believe that through a great investment of time and 
a tremendous amount of research we have found a cure for a great deal 
of what ails the American health care insurance system, and American 
citizens can begin to benefit from these long sought after changes to 
the health care system in the United States.
  Mr. ROCKEFELLER. Mr. President, today hope is restored as we turn the 
desire for health care reform into reality. When the Kassebaum-Kennedy 
bill is signed into law, which will happen very soon, some of the most 
maddening, often cruel problems with America's health care system will 
begin to get fixed.
  When you look at all the hard work that went into getting this bill 
hammered out and on the brink of enactment, we could fill Olympic 
Stadium with the people who deserve some of the credit. But two 
individuals win the health reform gold medals in achieving this victory 
for millions and millions of Americans. The senior Senators from Kansas 
and Massachusetts have been true champions in leading what turned into 
a legislative marathon for health care reform. On behalf of the people 
of my State, and from my own heart, I thank both colleagues for their 
incredible feat.
  Over the past few years, Americans had every reason to wonder if 
Congress would ever be capable of doing anything ever again about the 
health care problems that cause them so much pain. When the fight for 
comprehensive health reform failed, it was hard to see how we could 
ever get out of the ditch of partisan politics, special interests, and 
fear that did us in.
  But while plenty of special interests and politicians wanted health 
care reform to die, millions of Americans were still waiting 
desperately for something to be done.
  The Senators from Kansas and Massachusetts realized that we had to 
take a different tack. We had to target just a few of the most serious 
problems in the health care system, and offer solutions that made 
obvious sense.
  It took persistence, patience, cooperation, and compassion to get 
this bill to this point today. With this legislation, millions of 
Americans will be able to get the health insurance they desperately 
want and need--or I should say that this will happen soon, since one of 
the compromises was that the insurance reforms won't be effective until 
July of next year.
  When that date is reached, the rules will change. Working Americans 
will be freed from the trap that locks them into jobs and situations 
solely because a change will mean losing their health insurance. 
Preexisting conditions will no longer mean an endless nightmare for the 
millions of children and adults who have some illness or medical 
problem that's the very reason they need health care. Small employers 
won't be shut out from the health insurance marketplace.
  When I talk about the Kassebaum-Kennedy bill, I can picture the West 
Virginians--parents, children, small business owners, health care 
professionals--who have begged for help.
  Now, I can report back to the West Virginian who shared his agony 
over not being able to get coverage for his cancer, because it was 
branded a pre-existing condition, that the law will soon require an 
insurance company to sell him that coverage. Now, I can send word to 
West Virginians who want to switch jobs, move to a different community, 
or even start their own business that they can hold onto their health 
insurance while they pursue any of these goals for themselves and their 
families.
  And most importantly, now I can tell all West Virginians, and we can 
tell all Americans, that health care reform is not dead, it's not code 
for gridlock, and it's not a pipedream.
  The Kassebaum-Kennedy bill also represents the art and necessity of 
compromise. Some proposals that would have helped numerous families 
were dropped, because opposition just couldn't be overcome.
  And one proposal, to open the door for medical savings accounts, 
worries me. It is labeled a ``demonstration,'' and I just hope that 
Congress will be honest and responsible about taking a true look at how 
people do when they turn from conventional insurance to tax breaks and 
catastrophic-only coverage. I know that most people don't plan on 
getting sick or having an accident or developing a serious disease, and 
I fear that an MSA will go from being a financial benefit into an 
overwhelming burden for many Americans when the unexpected happens.
  But I also know that we won't achieve any positive health reforms 
without making concessions. And the work will always be difficult. 
There are too many insurance companies that want to chase after healthy 
customers, and avoid the sick. There will always be ideology that gets 
in the way of telling the private sector to do anything differently, no 
matter how many families are hurting. There will always be fear of the 
unknown, no matter how many problems exist in the present.
  Today, however, let's celebrate what is getting done. And then 
tomorrow, let's move on to the next round of health care reform. Today, 
let's thank Senator Kassebaum and Senator Kennedy for their gift to at 
least 25 million Americans, and many thousands of West Virginians. And 
then tomorrow, let's be inspired by their leadership to get even more 
done for millions more who still suffer because they can't get or 
afford decent health care.
  Ms. MOSELEY-BRAUN. Mr. President, 3 years ago, this Senate blocked 
attempts to act on comprehensive health care reform. While that year's 
effort to achieve the major reforms that are so needed and so long 
overdue did not succeed, the problems that led the President to make 
that proposal have not disappeared. Far from it.
  As a nation, we spend 15 percent of our gross domestic product on 
health care, over $1 trillion. No other industrialized nation spends 
more than 10 percent of their GDP and the gap is widening. Yet today, 
there are over 40 million Americans without health insurance, and over 
23 million of those Americans are employed. Over 1 million working 
Americans have lost health care coverage over the past 2

[[Page S9514]]

years. And 60 percent or more of all Americans worry about losing their 
current health insurance coverage. The case for reform, therefore, is 
perhaps even more compelling now than it was 3 years ago.
  I am proud that today the Senate is taking a significant step toward 
reforming the health care system. The Kassebaum-Kennedy Health 
Insurance Reform Act is not the panacea for our health problems, but it 
does represent progress. It is an important step in the right 
direction.
  This bill has many good features. Perhaps the most important is the 
limits on exclusions for preexisting conditions. This bill says that no 
one can be denied health insurance coverage for more than 1 year due to 
a medical condition. If there is any concern which every person has 
about health insurance, it is the ``trap'' of preexisting conditions. 
All too often, individuals find themselves excluded from coverage 
because of a preexisting condition. Some 81 million Americans have 
preexisting conditions that could affect their insurability. And more 
than half of all American workers are enrolled in health insurance 
plans that impose some form of preexisting condition exclusion. When 
you consider that most Americans will have seven or more jobs in the 
course of their working life, the preexisting condition problem affects 
virtually every American family. The General Accounting Office [GAO] 
estimates that 21 million Americans will be helped by the limits on 
exclusions for preexisting conditions included in this health care 
bill.

  In my own State of Illinois, almost 8 million people have private 
health insurance and almost 2 million are uninsured. This bill will 
make a critical difference in their lives, and in the lives of 
similarly situated people all across the Nation.
  This bill also includes portability provisions which will end ``job 
lock'' by making health coverage portable between jobs. For Americans 
who might want to leave their jobs to start their own businesses--or 
who might have to leave their jobs because of corporate restructuring--
but who might have a preexisting condition or a family medical history 
that would currently make it difficult to impossible for them to 
purchase an individual health policy, this bill will make a huge 
difference. It will guarantee their access to health insurance.
  Families with a small child suffering serious health problems will no 
longer face the prospect of being unable to obtain health insurance if 
the parents change jobs. It is tough enough for families to deal with a 
serious health problem affecting one of their children without having 
to face the additional problem of losing access to health insurance if 
they are laid off, restructured out of their jobs, or want to change 
jobs for new or better paying jobs.
  Similarly, this bill will guarantee that small businesses with only a 
few employees will not lose their group health coverage because one of 
their employees develops a serious health problem, as is the case now. 
Moreover, it will help make health insurance more affordable for those 
small groups, making it more likely that more small businesses will 
provide health insurance benefits for their employees. Furthermore, the 
increase in the deductibility of health insurance expenses from 30 
percent to 80 percent for self-employed individuals will make health 
insurance more affordable for those thousands of people who operate 
their own businesses.

  I am also pleased that members have been able to reach a bipartisan 
agreement on medical savings accounts [MSA]. Issues surrounding the 
availability of MSAs have held up movement on this important 
legislation too long. The compromise provision would provide many small 
businesses and self-employed individuals access to more affordable 
health insurance options. The MSA options will provide valuable 
information as to the impact of broader scale high-deductible health 
plans on cost control and general insurability.
  The Health Insurance Reform Act represents a practical, caring 
attempt to deal with the real health care problems facing so many 
Americans, based on their everyday realities. This bill is all about 
incremental reform--but nonetheless real reform. It will help virtually 
every working American, as well as millions of Americans who are 
temporarily out of the work force. And it will work because it is based 
on what is actually going on in the world of people who need health 
care.
  It's worth thinking a bit about those everyday realities of life. 
Statistics tell us that the average American works at a job about 4\1/
2\ years. As I stated earlier, over the course of a working career, an 
average American working person could hold seven or more jobs. That 
fact alone makes it all too clear just how important it is for 
Americans to have portable health care coverage. And that fact alone is 
a good indication of how necessary it is to end preexisting condition 
restrictions that result in Americans having to pay enormous sums for 
new health care policies, losing access to health insurance altogether, 
or having to avoid--at virtually all costs--changing jobs in order to 
retain affordable health care.

  Access to affordable health care is no less important to the American 
people than pension planning, not only because Americans can't enjoy 
their retirement if they are in poor health, but because they face 
being bankrupted by health care costs if they are not able to retain 
access to affordable health insurance. Being able to roll over 
insurance coverage, therefore, is just as important as being able to 
roll over pension savings. Maintaining health security, therefore, 
deserves the same level of attention we give retirement security, any 
measures that protect and enhance that health security deserve the same 
kind of consensus support.
  Facing the loss of health insurance is a debilitating fear for all 
too many Americans, and without reform, it is all too great a risk for 
every American. This bill will end that fear, and it does so in a 
manner that makes sense and will work. It is far from the total answer 
to our health problems, but I do not think we should underestimate the 
importance we will be achieving once this bill becomes law.
  I want to conclude by congratulating the chairman of the Labor and 
Human Resources, Senator Kassebaum, and the ranking democratic member 
of that committee, Senator Kennedy, for their leadership and for all 
the hard work they have put in to bring the bill to this point. I want 
to particularly congratulate them for the bipartisanship they displayed 
in putting this bill together.
  Mr. DASCHLE. Mr. President, I am delighted to cast my vote for this 
bill--it is an important first step in ensuring health security for 
working Americans.
  Health security has always been, and always will be, a Democratic 
priority. It is at the top of our agenda, and we won't give up until 
every American has access to meaningful, affordable coverage.
  Unfortunately, even this small step was controversial.
  Senator Dole promised 2 years ago that health reform would be the 
first thing Republicans would focus on if they controlled Congress. As 
it turns out, health reform was nearly the last thing they focused on. 
And only because we insisted they finally act.
  This bill was approved unanimously in the Senate Labor Committee 
exactly 1 year ago on August 2, 1995. But for 8 months, secret 
Republican ``holds'' delayed it.
  When the bill finally reached the Senate floor on April 18 1996, the 
Republican leadership tried to attach to the bill poison pills, like 
MSA's to kill it. Then, 4 more months passed as the Republican 
leadership tried to stack the conference committee to ensure that MSA's 
were included in the final bill.
  In the meantime, the Republican leadership tried to water down the 
bill's portability provisions to guarantee that health insurance can be 
carried from job to job. But they did not succeed.
  I am delighted and relieved these ``delay and destroy'' tactics were 
finally abandoned and that Republicans joined us in fixing the most 
badly broken parts of health system. Make no mistake--this bill is 
badly needed.
  One Republican Senator told the Washington Post last year that 
``Health care is not very bright on anybody's radar screen, if it shows 
up at all.'' That's not what I hear in South Dakota and across the 
country. This issue is still very much on the minds of Americans.
  When health reform failed in 1994, Americans' problems securing 
coverage

[[Page S9515]]

didn't go away. The problems fueling the health care and insurance 
crisis still exist today. Forty million people are without insurance, 
and insurance remains prohibitively expensive for far too many people. 
The public expects and wants us to tackle this issue.
  The bill before us breathed new life into health reform efforts. 
Still, it does not come close to solving all our health care problems--
it is a modest, incremental downpayment on reform.
  But this bill does deal with one of the most pressing problems in our 
system--portability. Indeed, GAO says this legislation could help up to 
25 million Americans each year, at no cost to taxpayers. This bill 
gives workers dismissed from their jobs or looking for better jobs 
peace of mind.
  This bill means that never again will fear of losing their insurance 
trap people in their jobs.
  Still, passage of this bill is the beginning of the debate, not the 
end of it.
  Every single day in this country, 60,000 people lose their health 
insurance. Unfortunately, only a small fraction of that group will be 
helped by this legislation. We must do more to provide real health 
security to every American.
  As we celebrate this bill's passage, let us pledge to tackle even 
more difficult issues. We must ensure that every child has health 
coverage. We must eliminate barriers to pregnant women getting prenatal 
care. We must make coverage more affordable for small businesses. We 
must ensure every child is immunized appropriately. We must end cherry 
picking by insurance companies. We must ensure rural Americans have the 
same access to quality care their urban neighbors enjoy.
  In sum, we must guarantee every American access to affordable, 
quality coverage. This will be on the top of the Democrats' agenda in 
the next Congress.
  Despite its limitations, this is an important bill. It's a victory 
for the President, who put this issue on our collective radar screens. 
It's a victory for Senators Kennedy and Kassebaum, who worked so hard 
to make this happen. It's a victory for Democrats, who consider this a 
priority item.
  Most importantly, it's a victory for America's working families.
  Mr. KERRY. Mr. President, I am delighted that Americans will finally 
receive the benefits of the health care reforms contained in the 
Kennedy-Kassebaum bill--benefits which the General Accounting Offices 
estimates will help over 21 million people.
  But I want to talk today about one particular person who will benefit 
from this bill, a woman from Florence, MA, who wrote me recently 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 who work in small 
businesses often have trouble getting insurance especially if 1 
employee has medical problems.
  This bill takes very important steps forward to correct these 
problems. 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 3 years, and 
almost 60 percent of those lacked insurance for 6 or more months. It is 
time that we help the American people get the health insurance they 
rightfully deserve.
  Mr. President, this Congress continues to have 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. Fortunately, this bill is a notable 
exception.
  Finally, I want to 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, the senior Senator from 
my State, who has been a leader for his entire career on health care 
issues. To a very considerable extent we all are in their debt as we 
send this legislation to the President, because it was their 
commitment, stamina, and statesmanship that worked past what again and 
again appeared to be intractable differences of opinion among 535 
members of the House and Senate. This is a tremendous victory for the 
American people, but it is also a richly deserved personal victory for 
both Senator Kassebaum and Senator Kennedy. I will proudly vote to send 
this bill to the President's desk for his signature.
  Mr. FAIRCLOTH. Mr. President, Yesterday, when the Senate passed 
welfare legislation we took an important first step toward reforming 
our failed welfare system. Similarly, the health care reform bill 
before us today takes another important first step toward addressing 
some of the serious flaws that exist in our Nation's health care 
system.
  We must ensure that this health care bill becomes a step in the right 
direction, a step away from excessive government regulation and a step 
toward a health care system based on free-market principles that 
benefits and empowers individuals.
  I am very pleased that the conference report includes the foundation 
for the full implementation of Medical Savings Accounts, this is the 
single most important feature of this legislation.
  When we debated medical savings accounts in April, opponents of the 
provision argued that anyone who want to include MSA's really wanted 
just to kill the Kassebaum bill. I believe that the conference 
agreement has proven them wrong.
  This real issue behind medical savings accounts is a question of 
whether health care reform should move toward greater government 
control of our health care system, as President Clinton advocates, or 
whether health care reform should place more decision making authority 
in the hands of individuals. Once individual Americans have the power 
to control how their own health care dollars are spent, they will never 
allow the government to take that power back.
  I am certain that when the four year trial period for medical savings 
accounts ends successfully, the Congress will overwhelmingly endorse 
MSA's as an unlimited nation-wide policy.
  Mr. President, while this conference report is a first step, it is 
not too soon to consider what our next steps should be. We badly need 
meaningful reform of our medical malpractice and antitrust laws as well 
as full deductibility of health care expenses for the self-employed.
  The health care reform conference report will improve the health care 
coverage available to individual Americans. But to preserve those 
gains, we must make sure that future health care legislation seeks 
free-market solutions, not big-government solutions.
  Mr. SIMON. Mr. President, like most bills, the Health Insurance 
Portability and Accountability Act contains both good and more 
worrisome provisions. Some of the better provisions, such as 
portability, are not perfect and others of importance, such as mental 
health parity, are now completely absent.
  One important provision in this bill that has not received much 
attention is administrative simplification. It sounds innocuous enough. 
It aims to

[[Page S9516]]

cut administrative costs by standardizing the way medical information 
is electronically stored and transmitted. No one is against cutting 
health care costs.
  This standardization, however, accelerates the creation of large data 
bases containing personally identifiable information. All this 
information is transmitted over electronic networks. We need to be very 
careful about how safe and secure that information is from prying eyes. 
Some of it may be extremely sensitive and could be used in a malicious 
or discriminatory manner.
  Not only do we need to hold this information securely, we also need 
to give individuals control over who actually has access to their 
medical records. We have been working in this Congress this year to try 
to come up with federal privacy laws for medical records. Senators 
Bennett, Leahy, Kassebaum, Kennedy, Domenici, Wellstone and Mack have 
all been concerned with the need to craft meaningful privacy 
legislation. I commend their efforts in this area. It has been 
extremely difficult legislation to craft, however.
  The States themselves have enacted some medical privacy laws. For 
instance, several States have passed laws that protect the 
confidentiality of mental health records or HIV status. We should not 
preempt such protections. I am glad to see that the preemption of State 
law in this area has been removed from this bill. I commend the Finance 
Committee, and particularly Anne Marie Murphy of my own staff, for 
their work in helping to rectify this problem.
  I am still troubled by the possible time lag between the enactment of 
standardization and the development of privacy regulations by the 
Secretary of HHS. The way this provision is currently drafted, 
standards will be developed by standard setting organizations that are 
mainly business groups, solely on the basis of cost, within 18 months 
of enactment of this Act. HHS will submit to Congress detailed 
recommendations on standards with respect to the privacy of 
individually identifiable health information within 12 months of 
enactment of this Act. If Congress does not act on these 
recommendations within 36 months of enactment, the Secretary of HHS 
will promulgate privacy regulations within 42 months of enactment. 
There is, therefore, a possible time lag of 36 months between standard 
setting and privacy regulations.

  This puts the cart before the horse. Obviously, privacy should come 
first. I don t think there is one Senator here who would like to have 
his or her own medical privacy play second fiddle to business costs.
  Furthermore, this order of cost first, privacy later, may in fact be 
much more disruptive to business. For example, it does not make good 
privacy sense to use social security numbers as a unique health 
identifier; it would be far too easy for others to decode these. It 
might, however, make for easy, cost-effective, standardization. If the 
standards developed need to be fully revised to take account of privacy 
concerns, then business will be forced to standardize twice, with 
probably twice the expense.
  It makes much more sense to have the standards developed with both 
privacy and cost in mind and for the standards to be enacted after and 
in accordance with the privacy regulations. I would urge my colleagues 
to alter these dates and modify this section to couple these two very 
admirable goals of cost reduction and medical records privacy.
  In general, although there are weaknesses in this bill and it is far, 
far less reform than we need, I am pleased that we are finally moving 
ahead with modest initiatives in the area of access to health 
insurance. Many Americans will be helped by this legislation. It should 
be clear, however, to anyone who looks at what is happening to health 
insurance coverage in this country that this bill is just a first step 
of many we need to take to meet the health care needs of our Nation. 
This is especially true in regard to children, where we will fall even 
farther behind as a result of the Welfare bill we just passed, and in 
regard to equitable coverage of people with mental illnesses.
  Senator Domenici and Senator Wellstone deserve great credit for 
fighting for equitable treatment in coverage for the mentally ill. I 
hope they will win this fight in the near future. I will do everything 
I can to help in this effort before the end of this Congress.
  I hope it will also not be long before the Senate acts to ensure 
universal access to health care coverage for all children and pregnant 
women. More than 9.3 million children and half a million expectant 
mothers in our Nation have no health insurance of any kind. Projections 
are that by the year 2002 we will have 12.6 million children without 
coverage and nearly 5 million more may be added to that as a result of 
proposed changes in Medicaid. When we passed the Kennedy-Kassebaum bill 
earlier this year, the Senate accepted a sense of the Senate resolution 
I offered stating that the issue of adequate health care for our 
mothers and children is important to our nation's future and that the 
Senate should pass health care legislation ensuring health care 
coverage for all of our nation's pregnant women and children. The 
Senate must be held to account on this resolution.
  It is unacceptable in our rich country to permit these inequities to 
continue and to permit so many of the most vulnerable in our society to 
be denied assurance of even basic health care. While I applaud everyone 
who worked so hard to bring this agreement to the floor, I hope those 
who follow us in the next Congress will move on from here to make more 
fundamental progress toward the fair, just and accessible health care 
system all of our citizens deserve in this great Nation.
  Mr. DODD. Mr. President, the legislation before us today--the 
conference report on the Kassebaum/Kennedy Health Insurance Reform 
Act--gives this body a unique and historic opportunity--to pass a 
sensible, incremental and common-sense health reform measure that will 
help millions of Americans.
  Our actions today will give an estimated 25 million Americans a much 
needed and deserving helping hand.
  This bill would guarantee to American working families--if you change 
your job you will not lose access to health insurance. This bill will 
limit pre-existing condition exclusions. It will guarantee renewability 
of health insurance policies. And it will help self-employed 
individuals, by increasing the deduction for health insurance expenses.
  It's been a long difficult process to reach this point. But, finally 
these most basic health insurance reforms will become law, exactly 1 
year after the Labor and Human Resources Committee unanimously reported 
the bill.
  This bill will not solve every problem in our health care system, but 
it's an important first step. It is good public policy and it deserves 
the support of every member of this body.
  Frankly, I feared that the majority party would prevent this day from 
happening.
  This legislation passed in the Labor Committee 1 year ago, but 
objections by members of the majority party prevented this bill from 
receiving consideration by the Senate until the following April.
  President Clinton came to the Congress in January and in his State of 
the Union address urged us to quickly pass this legislation. But still 
it took 4 months for the majority party to respond.
  Finally, when the Senate was allowed to consider the bill it passed 
100-0. These days, not too much in this body is agreed upon in a 
bipartisan manner. But the unanimous support for the Kassebaum/Kennedy 
bill is a clear indication that this legislation is an effective, fair, 
and most important, bipartisan measure.
  But again, even after this unanimous vote, the majority tried to load 
the bill with controversial provisions, rather than move to quickly 
pass a bill we could all agree upon.
  Mr. President, this legislation should have passed last year and if 
we had done so, the American people would already be reaping the 
benefits. However, I am pleased that reason prevailed and today we can 
finally deliver these important protections to the American people.
  While this bill is an important step forward, I consider it only a 
first step in an ongoing process. Many problems remain in our health 
system. I won't

[[Page S9517]]

go into all of them today. But I do want to talk briefly about 
continuing problems in guaranteeing children access to health care.
  Our system simply does not work for millions of America's children. 
We all lose when the worker of tomorrow is crippled for life by the 
untreated illness of today. We all lose when completely preventable 
diseases like measles ripple through the child population.
  The General Accounting Office, in a series of reports issued to me 
this summer have reported on trends in children's health insurance that 
are cause for genuine alarm.
  In 1994, the percentage of children with private insurance coverage 
reached its lowest point since the census began consistently tracking 
coverage.
  In 1987, almost 74 percent of our Nation's children had private 
coverage. By 1994, that number had dropped to 65 percent.
  While Medicaid has certainly helped millions of children who would 
otherwise be without coverage, the number of children without any 
insurance rose to its highest point in 1994. Ten million children under 
age 18, or 14.2 percent, were uninsured in 1994.
  In States such as Alabama, Arizona, California, New Mexico, Oklahoma, 
and Texas, almost 20 percent or more of children are without health 
care coverage. That means 1 out of every 5 children in these States are 
lacking coverage.
  Too many of our children do not have access to basic health. So, I 
hope, Mr. President, that no one thinks that we've made the health care 
system right, because we still have a long way to go.
  Let us not forget that approximately 40 million Americans continue to 
lack health care coverage. Of those, 12 million are children under the 
age of 21. We still have a commitment to those people to make this 
measure the first, not the last, step on the road to meaningful health 
care reform.
  So today, we have a historic opportunity to help millions of 
America's working families keep their health care coverage. It is a 
chance that must not slip away, and so I urge all my colleagues to join 
me in supporting this common sense and sensible reform measure.
  Mr. LAUTENBERG. Mr. President, I rise in support of this conference 
report. This is a good first step in trying to provide affordable 
health care coverage to all Americans. This bill will ensure that 
people who move from job to job will be able to keep their health 
insurance, even if they have a pre-existing condition. It also will 
give the same protection to people who lose their jobs and must get 
health insurance on their own.
  This bill also provides some tax incentives for families to better 
afford health care. The legislation increases the health insurance 
deduction for self-employed individuals from 30 percent to 80 percent, 
bringing health care coverage within reach of many more Americans.
  This bill also expands the tax deduction for nursing home and long 
term care coverage. This will help families better cope with the 
staggering costs of nursing home coverage for their loved ones. In some 
facilities, a year in a nursing home can cost over $30,000.
  This bill also includes an experiment in Medical Savings Accounts 
(MSA's). The Senate originally rejected the concept of MSA's by a bi-
partisan vote. But the House Republicans insisted on a full blown 
implementation MSA's even though we have never even evaluated the 
efficacy of such health policies. Fortunately, this conference report 
only includes a limited demonstration of MSA's. This makes sense 
because this concept is untested. I am concerned that MSA's could drain 
the young, healthy and wealthy out of the traditional insurance system. 
This could leave old and sick people to cope with escalating insurance 
premiums, making it even tougher to afford health insurance. Therefore, 
I am pleased that this is only a time limited experiment.

  Mr. President, unfortunately, this bill does not include the so-
called mental health parity amendment authored by the Senators Domenici 
and Wellstone. This amendment passed overwhelmingly in the Senate but 
was completely dropped in conference. I hope that some day this 
amendment will become law so that we can do away with insurance 
policies that provide more coverage for physical illnesses than for 
mental illnesses. Families with members who have mental illnesses 
deserve this much.
  Mr. President, while this bill makes improvements in our health care 
system, we must remember that this is only a first step. We have much 
more work to do in the next Congress to move toward providing health 
care coverage for all Americans. This should continue to be our goal.
  Tragically, there are now 41 million Americans who do not have health 
insurance, up from 37 million in 1993. For the most part, these are 
working Americans. Eighty-four percent of the uninsured work, but they 
do not get health insurance at their jobs.
  We must do something to rectify this. We must continue to enact 
legislation so that one day no family is without health security.
  I yield the floor.
  Mr. GLENN. Mr. President, I support the conference agreement on H.R. 
3103, the Health Insurance Reform Bill. I am pleased that the Congress 
is taking long overdue final action on this legislation which is so 
important to working Americans and their families. As you know, it was 
approved by the Senate Labor and Human Resources Committee 1 year ago 
today, and it passed the Senate in April. Once again, I would like to 
commend Senator Kassebaum and Senator Kennedy for their untiring 
efforts to work with our colleagues and all interested parties to forge 
the bipartisan bill we will pass today and send to the President for 
his signature.
  The bill we are passing today is not comprehensive health care 
reform, but it is an important step forward in addressing problems in 
our current health insurance system. People who maintain continuous 
health insurance coverage will not be denied insurance for preexisting 
conditions, after one initial 12-month exclusion, even if they change 
jobs or insurance plans; and individuals who lose their jobs or change 
jobs will be guaranteed the opportunity to continue their insurance 
through a group or individual plan.
  A compromise was made on medical savings account [MSA] provisions 
passed by the House of Representatives but rejected by the Senate. The 
bill provides for a four year pilot program in which up to 750,000 
taxpayers with high-deductible health insurance plans can make tax 
deductible contributions to a medical savings account. At the end of 
the 4-year period, Congress would have to vote to expand the MSA 
program.
  This legislation also increases the health insurance deduction for 
self-employed individuals from 30 percent to 80 percent over a 10-year 
period, provides for a medical expense deduction for long term care 
insurance, and allows terminally ill individuals to receive tax free 
benefits from their life insurance.
  I regret that the Domenici-Wellstone amendment, which passed the 
Senate, was not included in this conference report nor was any 
compromise that the sponsors proposed. This amendment would require 
private health plans to provide medically necessary mental health 
services that are equal to the medical services provided. A great deal 
of progress has been made in diagnosing and treating mental illnesses, 
and I believe that we should provide health insurance coverage that 
will make this care affordable to people who need it. I will work with 
my colleagues during the remainder of this Congress to ensure that in 
the future people with mental illnesses have equal access to the care 
they need.
  The Health Insurance Reform Act will provide peace of mind to many 
working Americans who have health insurance but fear losing it, and it 
is a major improvement in our current health insurance system.


   providing tax exemption to state high risk health insurance pools

  Mr. COCHRAN. I am pleased that the conference report for the Health 
Insurance Reform Act includes a provision which confirms the 
availability of the Federal tax exemption for State health insurance 
risk pools which has been pending in Congress for the last several 
years. The purpose of a health risk pool is to make available health 
and accident insurance coverage to individuals

[[Page S9518]]

who, because of health conditions, would otherwise not be able to 
secure health insurance coverage. Health risk pools are one option 
contemplated by the Health Insurance Reform Act that States could 
implement as part of their health care reform efforts to seek to ensure 
access to health insurance.
  Since 1976, 28 States have enacted legislation establishing a health 
insurance pool aimed at protecting uninsurable and high-risk 
individuals. Most of the pools were established in the last 10 years.
  For example, the Comprehensive Health Insurance Risk Pool Association 
Act was enacted by the Mississippi State Legislature during the 1991 
legislative session and became effective April 15, 1991. At that time 
Mississippi became the 25th State to enact such legislation. This act 
created the Mississippi Comprehensive Health Insurance Risk Pool 
Association to implement such a health insurance program. Members of 
the association include insurance companies, nonprofit health care 
organizations and health maintenance organizations [HMO's] which are 
authorized to write direct health insurance policies and contracts 
supplemental to health insurance policies in Mississippi. The 
association also includes third-party administrators who are paying and 
processing health insurance claims for Mississippi residents.
  Over the past 4 years, the association has issued medical insurance 
policies to approximately 1,200 Mississippians. The association is 
funded by premiums paid by policyholders and quarterly assessments 
against members of the association. The assessments are necessary to 
supplement the premiums and operate the program on a financially sound 
basis. There is no public funding--State or Federal--involved.
  Currently, over 100,000 individuals nationwide are members of a State 
health risk pool. Nationally, there are an additional 1 to 3 million 
people who are uninsured and uninsurable, and who could be eligible for 
inclusion in a State health risk pool.
  As my colleague knows, unfortunately, several State health risk 
pools, including the Mississippi Comprehensive Health Insurance Risk 
Pool Association, have applied for and have been denied exemption for 
Federal taxation under Internal Revenue Code sections 501(c)(4) and/or 
501(c)(6). Generally, the Internal Revenue Service's [IRS] rationale 
for such denial has been that the sole activity of the health risk 
pools is the provision of health insurance for individual 
policyholders. The IRS perceives health risk pools as a regular 
business ordinarily carried on for profit, which primarily provide 
commercial type insurance. Moreover, the IRS takes the position that 
health risk pools are primarily serving the private interests of its 
members and not the common interest of the community as a whole.
  Would my colleague agree that the IRS's position is incorrect?
  Mrs. KASSEBAUM. I would agree with the Senator.
  Mr. COCHRAN. Is it not the case that health risk pools have been 
created by statute in the several States to serve a public function of 
relieving the hardship of those who, for health reasons, are unable to 
obtain health insurance coverage? Additionally, that these pools do not 
carry on an activity ordinarily carried on by insurance companies and 
not designed to make a profit? Further, that they are established by 
State statute and none of the net earnings benefit any private 
shareholder, member, or individual?
  Mrs. KASSEBAUM. I would agree with the Senator.
  Mr. COCHRAN. The Federal Government should serve as an impetus for, 
not an impediment to, State health care reform. We should do all we can 
to increase the ability of States to help the uninsured. The Health 
Insurance Reform Act recognizes the value of health risk pools and 
includes vital roles for health risk pools in their health care reform 
legislation.
  Would my colleague not agree that in order to allow States 
flexibility in designing effective health care plans, State health risk 
pools should be exempt from taxation and that it was never the intent 
of Congress that health risk pools be subject to taxation?
  Mrs. KASSEBAUM. I would agree with the Senator.
  Mr. COCHRAN. Would my colleague agree that it is the intent of 
Congress through this legislation to clarify that health risk pools be 
exempt from taxation?
  Mrs. KASSEBAUM. The Senator is correct. This legislation will clarify 
the intent of Congress that health risk pools should not be subject to 
taxation.
  Mr. COCHRAN. I thank my colleague for her assistance. By passing this 
legislation, we will promote State-based health care reform by 
expressly confirming that State health risk pools are exempt from 
Federal taxation, notwithstanding the IRS' position. By clarifying the 
intent of Congress, the IRS should recognize this legislation as 
confirming the interpretation of existing law, and not creating new 
law, and accordingly grant tax exempt organization status to all health 
risk pools that have applied for such status.


                       organ donation insert card

  Mr. DORGAN. I am pleased that the conference committee on the Health 
Insurance Reform Act has included a small, but lifesaving provision 
that Senator Frist and I offered as an amendment to the Senate bill. I 
am referring to the organ donation insert card provision.
  This measure, which I first introduced in 1994, would require the 
Secretary of the Treasury to send out information about organ and 
tissue donation with each tax refund mailed in 1997. This provision 
will help give a new chance at life to the more than 46,000 Americans 
who are desperately waiting right now for an organ or tissue 
transplant.
  Many opportunities for a lifesaving organ donation are missed each 
year because family members hesitate to authorize organ or tissue 
donation when their loved one dies. By providing information to 70 
million Americans next year, we can raise awareness about the need for 
donors and, in the process, we will save lives.
  I do want to mention a concern I have about one of two technical 
changes made to the organ donation insert card amendment during 
conference. At this time, I would like to engage in a colloquy with 
Senator Frist, a cosponsor of this Amendment, and Senator Roth, the 
chairman of the Finance Committee, to clarify Congress' intent with 
regard to this provision.
  The conference agreement alters my original provision to read that 
organ donation information will be included with tax refunds mailed in 
1997 to quote ``the extent practicable'' unquote. I want to make it 
clear that I feel strongly that providing this information to millions 
of Americans is not only a cost effective way to save lives but is also 
a practical measure that does not pose an unreasonable burden on the 
Department of the Treasury.
  Mr. FRIST. Senator Dorgan, is it true that the Treasury Department 
regularly includes insert cards with the refunds it mails each year?
  Mr. DORGAN. The Senator from Tennessee is absolutely correct. This 
year, for example, taxpayers who receive a refund also received 
information about how to purchase Olympic commemorative coins. In 1994, 
an advertisement for World Cup Soccer commemorative coins was mailed 
along with refunds.
  Mr. FRIST. It is my understanding that the cost to the Treasury 
Department of printing and inserting this information is negligible. 
Since the Federal Government already incurs this cost on an annual 
basis, I do not believe this would create a burden. Is that also your 
belief?
  Mr. DORGAN. Yes, it is. I would like to ask the distinguished 
gentleman from Delaware [Senator Roth], to clarify for us what the 
conference committee intended by making this technical change to the 
Senate's amendment.
  Mr. ROTH. The conference committee's intent regarding this change was 
to ensure that there be no delay in the mailing of refund checks 
because of this provision. The language ``to the extent practicable'' 
originally read ``to the maximum extent practicable'' to address any 
potential administrative issues that may arise. For example, if the 
Internal Revenue Service ran out of organ donor cards we would not want 
to insinuate that the check could only go out if a donor card was 
enclosed. The Treasury Department specifically asked us to delete 
``maximum'' from the language.
  It was not the conference committee's belief that this provision 
should

[[Page S9519]]

cause a delay, and we fully expect that the Treasury Department will 
make every effort to ensure that all of the individual taxpayers who 
are mailed refunds in 1997 will also receive organ donation 
information.
  Mr. DORGAN. Thank you Senator Roth and Frist. I want to again thank 
Senators Kennedy, Kassebaum, and Frist, Congressman Richard Durbin, and 
the many supportive organizations who have worked with me to get this 
provision enacted.
  Mr. President, I rise today in support of final passage of the Health 
Insurance Reform Act. It has not been an easy road to agreement on this 
bill, but for the sake of the American people, I am glad we were able 
to put aside our differences and reach a compromise on those issues 
where we do agree.
  We are fortunate in our country to have one of the finest health care 
systems in the world. But unfortunately, not all Americans have access 
to that health care system or can afford the escalating prices of care.
  This bill is not the total answer to those issues. In fact, compared 
to the health care plan proposed by President Clinton several years 
ago, which I did not support because I thought it was too bureaucratic, 
this bill is very, very modest.
  Having said that, the Health Insurance Reform Act is a significant 
step forward in helping Americans who are routinely denied health 
insurance coverage through no fault of their own, and I am pleased to 
be a cosponsor and supporter.
  Earlier this year, I received a heartbreaking letter from a mother in 
Williston, ND whose infant son was born with a rare disease called 
myelamacia. He often stops breathing and doctors have no idea how long 
he will live or what his quality of life will be. Michael is actually 
lucky because, right now, he is covered under his mother's employer-
based health insurance plan.
  But Michael's mother is desperately worried about how long his 
coverage will last. For one thing, Michael currently must live at the 
Anne Carlsen Center for Children in Jamestown, ND, which is quite a 
long distance from Williston. Michael's parents would like to move 
closer to their son so they can spend more time with him, but they are 
justifiably afraid that if Michael's mom switches jobs, Michael will 
lose his insurance coverage.
  Michael's parents are not alone. A survey has found that one-quarter 
of Americans who would have otherwise switched jobs did not because 
they feared losing their health insurance coverage.
  This legislation basically says to insurance companies, if someone 
has been a good customer of yours, paying their premiums regularly for 
years, you cannot drop their coverage simply because he or she gets 
sick or switches jobs.
  This bill puts limits on the amount of time that insurance companies 
can deny coverage for individuals with preexisting medical conditions, 
even for those who change jobs or whose employer switches insurance 
companies. It also requires insurance companies to renew the health 
insurance coverage of individuals or groups as long as they pay their 
premiums. The bill will also help to ensure that those with preexisting 
conditions will be able to purchase affordable individual insurance 
policies if they lose their group health coverage.

  This bill also contains provisions which will help many of North 
Dakota's small business owners and sole proprietors. I have been 
fighting for one of these provisions ever since I came to Congress, so 
I am particularly pleased that we are acting to level the playing field 
for sole proprietors.
  Under this bill, farmers and other self-employed individuals will be 
able to deduct a higher percentage of their health insurance premiums. 
Right now, large corporations can deduct 100 percent of their health 
insurance expenses, but sole proprietors may only deduct 30 percent of 
their health insurance premiums. This bill will gradually increase the 
amount that the self-employed can deduct to 50 percent by 2003 and to 
80 percent by 2006. I would prefer that they be allowed to deduct all 
of their insurance costs, as corporations already can, but this will go 
a long way toward making health insurance more affordable for farmers 
and other self-employed individuals.
  This bill also will allow some small employers and their employees to 
experiment with medical savings accounts, or MSA's. This is a highly 
controversial issue, and I'm glad we were able to reach an agreement 
that allows us to move forward on this legislation.
  I think MSA's are an intriguing idea. Common sense tells you that 
making health care consumers think more carefully about the type and 
cost of care they receive will likely have some positive impact on 
overall costs.
  At the same time, however, I do have concerns about the impact that 
MSA's could have on the traditional insurance pool. The trial approach 
taken in this bill will minimize any negative effects on the insurance 
market while allowing us to evaluate the value of MSA's.
  Finally, I want to mention one more provision included in this bill. 
It is a small, easily overlooked provision which I offered, but it is 
one that will save lives, and I want to thank Senators Frist, Kennedy, 
Kassebaum, and the many other Senators, Members of the House of 
Representatives and supportive organizations who have worked with me to 
get this provision included. I am referring to the organ donation 
insert card provision.
  This measure, which I first introduced in 1994, would require the 
Secretary of the Treasury to send out information about organ and 
tissue donation with each tax refund mailed in 1997. This provision 
will help give a new chance at life to the more than 46,000 Americans 
who are desperately waiting right now for an organ or tissue 
transplant.
  Many opportunities for a lifesaving organ donation are missed each 
year because family members hesitate to authorize organ or tissue 
donation when their loved one dies. By providing information to 70 
million Americans next year, we can raise awareness about the need for 
donors and, in the process, we will save lives.
  In closing, I want to thank Senators Kennedy and Kassebaum and both 
of the leaders for their tireless work to move this worthwhile 
legislation to this point. I am pleased to be a cosponsor of the Health 
Insurance Reform Act and to finally have this opportunity to vote to 
send it to the President for his signature.
  Mr. BURNS. Mr. President, I rise today to speak about this health 
insurance reform legislation now before us. After months of gridlock on 
this bill, I am glad that the Senate finally has a chance to once again 
consider and pass this straightforward legislation. I must confess, 
however, that I find it puzzling that this bill has been held up for 3 
months over the issue of medical savings accounts--particularly in 
light of what we are trying to accomplish by passing this legislation.
  I am a strong supporter of medical savings accounts. I truly believe 
MSA's empower health care consumers by giving them the freedom to 
choose how they spend their health care dollar. Medical savings 
accounts provide the competitive choice which not only enables folks to 
keep pace with inflation, but counters the increases that will result 
from the guaranteed-issue component of this legislation. Nonetheless, I 
am pleased that this bill creates at least a full-blown test for the 
MSA.
  Though it disturbs me to know that we could have sent this meaningful 
legislation to the President for his signature months ago, the delay on 
this bill has given me the opportunity to hear the thoughts of 
literally thousands of Montanans on this issue, folks who have written 
to me, folks who have called me, and folks I've seen while traveling in 
the State. Given all the input I have received on this legislation over 
these last few months, one thing is certain, the folks in Montana are 
reaffirming what they have been telling me for years--that they want 
the commonsense measures contained in this bill passed into law.
  It is no secret that the health insurance system in this country is 
in need of some fine tuning. And I know that many of my colleagues on 
both sides of the aisle and in both Chambers of Congress would agree 
with that assessment. It is estimated that 43 million Americans went 
without health insurance in 1995 and roughly 23 million of those are 
workers. Though we can't guarantee every American health care 
coverage--nor would I ever support a

[[Page S9520]]

plan to do so--we can address the barriers that keep health insurance 
out of the reach of most of these folks; access and affordability. And 
this health insurance reform legislation does just that.
  There is little doubt in my mind that the Health Insurance and 
Portability Act will greatly reduce the barriers to obtaining health 
insurance coverage for millions of Americans by: one, limiting an 
insurer's ability to withhold coverage for people with pre-existing 
medical conditions; two, making it easier for workers to get and 
maintain health coverage; and three, because of its provisions 
guaranteeing coverage, this legislation will make it easier for workers 
to change jobs or start their own businesses without fear of losing 
health care coverage.
  This bill also contains many other important provisions. I am 
especially pleased with the significant improvements in coverage for 
pregnant women, newborns, and adopted children. This bill will also 
make health care more affordable by providing the government with the 
means to crack down on health care fraud and abuse in the health care 
system, specifically in the Medicare and Medicaid programs. What's 
more, self-employed people will be able to deduct from their taxes 80 
percent of their health insurance premiums by the year 2006, up from 
the 30 percent which current law allows. In addition, this bill 
increases tax breaks for small companies. Those provisions are 
especially important for my State, where 98 percent of our businesses 
are considered small businesses and have fewer than 50 employees.
  What so personally excites me about this bill is a provision that I 
introduced to this bill that requires reimbursement for telemedicine 
services under Medicare. As many of my colleagues know, I have been a 
strong advocate of telemedicine since my election to the Senate. I 
truly believe that establishing a telecommunications infrastructure is 
a part of the solution to providing affordable and accessible health 
care. Telemedicine is being used now in Montana, and across the United 
States, to bring health care services to those who currently don't have 
access. Getting health care services can be a challenge, especially 
when folks in my State and in other rural areas face situations where 
they are 180 miles away from a specialist. But even if specialists are 
willing and able to visit their patients via telemedicine, the Health 
Care Financing Administration will not reimburse them for those 
services.
  Mr. President, HCFA has been reviewing demonstration projects to 
analyze the cost effectiveness of providing health care services via 
telecommunications and how to reimburse the health care providers. The 
HCFA study has no expected deadline, but the provision contained in 
this bill will require HCFA to complete its study and report back to 
Congress by March 1, 1997. If we pass this bill today, that gives HCFA 
almost 8 months, in addition to the time they have already spent 
studying the issue, to determine the reimbursement of services provided 
via telemedicine. I don't feel this proposal is unreasonable. In fact, 
since this study is already ongoing, there is no cost associated with 
this. I am simply asking that HCFA finish the study and let rural areas 
and urban residents access the health care services that are currently 
out of reach geographically.

  I realize that there are many Americans, including a number of folks 
in Montana, who have serious concerns with this legislation. Folks in 
my State seem to be particularly concerned that this legislation is 
just a step toward implementing the failed Clinton health care plan and 
will turn our health care system over to the Government. What's more, I 
have heard from a number of Montanans who are concerned about health 
insurance costs going up for all health care consumers. I appreciate 
and understand these concerns--I don't want to see either of these 
things take place. In fact, like most Americans, I am completely 
opposed, and I opposed then, the type of big-government, big-
bureaucracy health care agenda that the Clinton administration proposed 
in 1994. Most people don't want a single-payer, government-controlled 
health insurance system deciding what is best for them and neither do 
I. That is why this bill only addresses those aspects of health 
insurance reform that folks have identified as important and necessary, 
and want to see passed.
  Though I realize that this bill will not solve all the problems with 
our Nation's health care system--and I have concerns with certain 
aspects of the act as well--this legislation does take a giant step 
toward eliminating many of the worst abuses that exist in the private 
insurance market. Most important, it does all this without 
substantially raising costs for current health insurance policyholders, 
without meddling with those parts of the system that work, and without 
taking away the ability of States or the private sector to initiate 
their own reforms.
  Mr. President, the Republican-led 104th Congress has once again given 
us an opportunity to change a system that has consistently failed 
millions of Americans and American families. I want to take a moment to 
thank the Republican leadership and all of those who have worked so 
hard, in both parties, to bring this legislation back to the floor. I 
also want to commend Senators Domenici and Wellstone for their work on 
mental health parity. Though this provision has been stripped from the 
bill, I believe their efforts will help move our country forward in 
treating the nearly 5 million Americans suffering from severe mental 
illness. I particularly want to commend the senior Senator from Kansas 
for leading the way on this issue. I also want to thank Senator 
Kassebaum for the time and dedication she has given over the years to 
the citizens of our country. I am truly sorry that Senator Kassebaum 
will be leaving us at the end of the 104th Congress. Not only will the 
U.S. Senate lose a fine legislator but a fine person. On that note, 
because of Senator Kassebaum's efforts, and with the overwhelming 
bipartisan support this bill received in the House yesterday, it looks 
as though we are going to see our way clear and bring about these much 
needed reforms to our health insurance system.
  In closing, Mr. President, I believe this health insurance reform 
legislation is the best hope we have to help America's--particularly 
Montana's--families and small businesses cope with burdensome health 
care costs. Not only will this legislation end job lock and the 
misfortune of pre-existing conditions that prevent thousands of 
Americans from buying coverage but it will also strengthen our health 
care system for years to come. In short, because this health insurance 
reform bill contains so many commonsense measures, I was pleased to 
support this bill when it first came before this body in April. And 
because the legislation that is again before us today will immediately 
and measurably improve the lives and protect the health of millions of 
American workers and families without putting folks out of business, 
raising taxes or turning the health care system over to the government, 
I am going to vote to send this bill to the President. I hope my 
colleagues in the Senate will do the same. This bill's time has come. 
Let's not squander the opportunity we have today.
  Mr. CHAFEE. Mr. President, I am pleased to support the conference 
report accompanying the health care reform legislation. Members of 
Congress have worked for many years to pass health care reform 
legislation, and it has been a long road. I would like to congratulate 
the co-sponsors of this legislation, Senators Kassebaum and Kennedy. At 
a time when most would have doubted that any health care reform bill 
could pass this year, they persevered. And this legislation is a 
fitting tribute to the senior Senator from Kansas who retires at the 
end of this year.
  In recent years, we have fought to reduce the number of Americans 
without access to health insurance and slow the rate of growth in 
health care costs. Two years ago we had a nationwide debate on health 
care reform. There were many competing proposals, and ultimately we 
failed to reach a consensus on comprehensive health reform legislation.
  In the wake of that failure, we have put aside our differences and 
taken a more incremental approach to health care reform. Rather than 
forcing dramatic change in our health care system, we are making small, 
yet important changes in the health insurance market which will give 
working Americans something very important--peace of mind.

[[Page S9521]]

  Once this legislation is enacted, Americans will know that if they 
change jobs they will be able to move from one group health insurance 
plan to another without worrying that preexisting conditions will limit 
or exclude them from coverage. Once this bill is enacted, families will 
no longer face being locked into their jobs for fear of losing health 
insurance coverage. This bill would also assure that if a worker lost 
his or her job or accepted a job without health insurance coverage, 
they would have the opportunity to purchase a health insurance policy 
without limitations or exclusions for preexisting conditions.
  This legislation also includes provisions introduced by Senator 
Cohen, to crack down on individuals who knowingly commit fraud in or 
health care system. Not only will this help to control health care 
costs in the private insurance market, but it will also reduce the 
fraud which plagues the Medicare Program. The bill includes provisions, 
authored by Senator Bond, to create uniform, standards for the 
electronic transmission of health care information in an effort to 
streamline and lower administrative costs.
  Finally, the language includes important tax provisions to make 
health insurance more affordable for the self-employed by allowing them 
to deduct a greater percentage of their health insurance costs. It also 
clarifies that the cost of long-term care insurance is deductible--
encouraging more Americans to purchase private long-term care 
insurance. I am hopeful that this provision will lessen the burden of 
long-term care costs on our Medicaid Program, which many seniors fall 
back on once they exhaust their life-savings on nursing home care.
  I recognize that there are those who are disappointed in the final 
outcome of some of the provisions in this legislation. Probably the 
most glaring is the omission of the Domenici-Wellstone provision 
providing parity for mental illness. During Senate consideration of the 
health reform proposal, I voted against the mental health parity 
amendment as well as other key provisions. I did so to assist the 
managers of the bill in trying to keep the bill free of controversial 
provisions that could have slowed down the process. I also had concerns 
that the amendment was too encompassing. I am hopeful that Congress 
will act in the near future on a narrower version of this important 
legislation.
  In conclusion, no one got exactly what they wanted on every aspect of 
this bill, myself included. Nonetheless, I think we all should take 
satisfaction in the passage of this legislation and recognize that 
great things often come form humble beginning. Thank you Mr. President.


                     clarifying certain definitions

  Mr. HATCH. Mr. President, with respect to the corporate-owned life 
insurance provision in the conference agreement to the Health Insurance 
Portability and Accountability Act of 1996, I would like to clarify the 
definition of a fixed and variable rate of interest as it relates to 
the deduction of interest on pre-1986 life insurance contracts.
  It is my understanding that a life insurance contract with an option 
to elect a variable rate of interest, which has borne the same rate of 
interest since its date of issuance, is considered a contract with a 
fixed rate of interest. If the interest rate under this contract is 
changed to a variable rate as the result of the exercise of an election 
under the contract, the contract would then be considered a contract 
with a variable rate of interest.
  Mr. ROTH. Yes, the Senator's understanding is correct.
  Mrs. FEINSTEIN. In 1945, President Harry Truman proposed universal 
health insurance, putting on the public agenda, the goal of universal 
health insurance, a goal that still eludes us. Too many Americans find 
that just when they most need health insurance, it is not there. It is 
terminated. They are denied its purchase, because they are sick. They 
are determined to be uninsurable.
  The bipartisan bill before us today does not provide health insurance 
to every American. We still face that challenge. But the bill before us 
today takes an important step toward making health insurance more 
secure.
  This bill provides some health security in several ways:
  No Arbitrary Terminations: Insurers will not be able to impose 
preexisting condition limitations for more than an initial 12-month 
period. This means that employees can change jobs without fear or 
facing a new preexisting condition exclusion.
  Guaranteed Access: Insurers will be required to offer insurance to 
all groups, regardless of the health status of any member of the group 
and employees could not be denied group coverage based on their health 
status.
  Guaranteed Insurance Renewal: Groups and individuals who have 
insurance will be able to renew their policies as long as they have 
paid their premiums.
  Individual Coverage Guaranteed: People who leave their job where they 
have had 18 months of prior employer group coverage and who have 
exhausted their extended [COBRA] coverage would be guaranteed access to 
an individual policy.


                           need for the bill

  The problems this bill addresses are real:
  Twenty-three million Americans lose their insurance every year; 18 
million people change insurance policies annually when someone in the 
family changes jobs.
  Over 9 million Americans changed jobs in 1995; millions more wanted 
to. The General Accounting Office estimates that as many as 4 million 
employees are locked into their jobs because they fear that the insurer 
for the next employer will refuse to insure them because of their 
health condition, something the industry has called a preexisting 
condition. GAO has said that 21 million Americans could benefit by 
prohibiting preexisting condition exclusions.
  Small employers are often unable to get insurance because a few of 
the employees are ill; insurers refuse to insure. Small employers lack 
the leverage of big employers in negotiating good prices and policies. 
In California, 84 percent of the uninsured are in working families. 
Fifty-two percent of uninsured employees work in small firms.
  And finally, there are 10 to 20 million Americans seeking to buy 
insurance on their own--individual policies. These individuals, who are 
not part of a large pool where risk can be spread out, find that 
insurers refuse to sell to them or price the policies so high they are 
unaffordable.


                         genetic discrimination

  I especially appreciate the inclusion of provisions barring genetic 
discrimination in health insurance, along the lines of S. 1600, a bill 
I introduced with Senator Mack.
  Last fall, as cochairs of the Senate Cancer Coalition, Senator Mack 
and I held a hearing on the status of genetics research and use of 
genetic tests. We learned we are all carrying around between 50,000 and 
100,000 genes scattered on 23 pairs of chromosomes and that every 
person has between 5 and 10 defective genes, often not manifested.
  Approximately 3 percent of all children are born with a severe 
condition that is primarily genetic in origin. By age 24, genetic 
disease strikes 5 percent of Americans. Genetic disorders account for 
one-fifth of adult hospital occupancy, two-thirds of childhood hospital 
occupancy, one-third of pregnancy loss and one-third of mental 
retardation.
  About 15 million people are affected by one or more of the over 4,000 
currently identified genetic disorders.

  We are learning virtually everyday about the explosion of knowledge 
in genetic science. We know that certain diseases have genetic links, 
like cancer, Alzheimer's disease, Huntington's disease, cystic 
fibrosis, neurofibromatosis, and Lou Gehrig's disease.
  But understanding genetics brings a new set of problems. Witness 
after witness at our hearing raised fears of health insurance 
discrimination. And it is not just fear. It is also reality. We heard 
about insurers denying coverage, refusing to renew coverage, or denying 
coverage of a particular condition.
  In a 1992 study, the Office of Technology Assessment found that 17 of 
29 insurers would not sell insurance to individuals when presymptomatic 
testing revealed the likelihood of a serious, chronic future disease. 
Fifteen of thirty-seven commercial insurers that cover groups said they 
would decline the applicant. Underwriters at 11 of 25 Blue Cross-Blue 
Shield plans said they would turn down an applicant if

[[Page S9522]]

presymptomatic testing revealed the likelihood of disease. The study 
found that insurers price plans higher--or even out of reach--based on 
genetic information. Another study conducted by Dr. Paul Billings at 
the California Pacific Medical Center, reached similar conclusions.
  Here are a few examples, real-life cases:
  An individual with hereditary hemochromatosis--excessive iron--who 
runs 10K races regularly, but who had no symptoms of the disease, could 
not get insurance because of the disease.
  A health maintenance organization that had covered a child since 
birth, denied therapy after the child was diagnoses with 
mucopolysaccharidoses [MPS].
  A Colorado insurer terminated the policy of the family of a 3-year-
old with the same disease.
  An 8-year-old girl was diagnosed at 14 days of age with PKI 
[phenylketonuria], a rare inherited disease, which if left untreated, 
leads to retardation. Most States require testing for this disease at 
birth. Her growth and development proceeded normally and she was 
healthy. She was insured on her father's employment-based policy, but 
when the father changed jobs, the insurer at the new job told him that 
his daughter was considered to be a high risk patient and uninsurable.
  The mother of an elementary school student had her son tested for a 
learning disability. The tests revealed that the son had Fragile X 
Syndrome, an inherited form of mental retardation. Her insurer dropped 
her son's coverage. After searching unsuccessfully for a company that 
would be willing to insure her son, the mother quit her job so she 
could impoverish herself and become eligible for Medicaid as insurance 
for her son.
  Another man worked as a financial officer for a large national 
company. His son had a genetic condition which left him severely 
disabled. The father was tested an found to be an asymptomatic carrier 
of the gene which caused his son's illness. His wife and other sons 
were healthy. His insurer initially disputed claims filed for the son's 
care, then paid them, but then refused to renew the employer's group 
coverage. The company then offered two plans. All employees except this 
father were offered a choice of the two. He was allowed only the 
managed care plan.
  A woman was denied health insurance because her nephew had been 
diagnosed as having cystic fibrosis and she inquired whether she should 
be tested to see if she was a carrier. After she was found to carry the 
gene that causes the disease, the insurer told her that neither she nor 
any children she might have would be covered unless her husband was 
determined not to carry the CF gene. She went for several months 
without health insurance because she sought genetic information about 
herself.
  These denials not only deprive Americans of health insurance, they 
affect people's health. If people fear retaliation by their insurer, 
they may be less likely to provide their physician with full 
information. They may be reluctant to be tested. This reluctance means 
that physicians might not have all the information they need to make a 
solid diagnosis or decide on a treatment.
  All of us are at risk of illness. We all have defective genes. I hope 
that the addition of my language can help ease the fears of many 
Americans and discourage insurers from using genetics as a reason to 
deny insurance.


                           AN IMPORTANT STEP

  This bill, while it does not address all the problems, does take an 
important step. As a measure of its importance, yesterday morning when 
agreement on the bill reached the public, my staff got a call at 9:15 
a.m.--6:15 a.m. California time--from a worried constituent, asking, 
``Will it help me?''
  This bill can help make health insurance available to those Americans 
who want to buy it. It can bring peace of mind to millions of 
Americans. It can restore to insurance what insurance is supposed to 
be.
  I hope we will promptly send this bill to the President for his 
signature and close this loophole in our erratic patchwork of health 
insurance.
  Mr. HELMS. Mr. President, H.R. 3103, the Health Coverage Availability 
and Affordability Act of 1996, could very well sound the death knell 
for the past years of liberal efforts to socialize medicine. The truth 
is, it puts us well on our way to providing a meaningful health care 
reform for millions of working Americans.
  H.R. 3103 guarantees that American workers can keep their health 
coverage if they change or lose their jobs, which will be greatly 
reassuring to millions of American workers having pre-existing 
conditions. Now they will be able to change jobs without fear of losing 
their health insurance. The portability provision, as it is called, 
enables employees to be covered immediately upon taking another job--
regardless of their health status.
  Mr. President, American dissatisfaction with the existing health care 
system has gained much of its momentum from the spiraling costs of 
medical care in the United States. In 1993, nearly $940 billion was 
spent on health care, more than 14 percent of the GDP; this percentage 
has been rising steadily for years. Tax relief and medical savings 
accounts provide the best of all solutions by enabling patients to make 
their own choices with their own money. Workers and their families--not 
government bureaucrats--should decide how much to spend on health care 
and which health care benefits best meet their needs.
  This bill, H.R. 3103, will partially correct a senseless disparity in 
the Tax Code concerning the deductibility of health insurance premiums. 
Whereas under current law businesses are allowed to deduct such 
premiums, fully, as a business expense, self-employed workers receive 
only a 30-percent deduction--thereby increasing the cost of doing 
business. This bill raises to 80 percent the amount of health insurance 
they can deduct from their Federal income taxes, it allows the 
deductibility of premiums for long-term care policies.
  Medical savings accounts [MSA's] expand consumer choice and 
ultimately will reduce health care costs by spurring competition and 
greater cost-consciousness in the use of health care. MSA's confer upon 
individuals financial incentive to spend their health care dollars 
wisely by turning part of the savings over to employees, in effect 
rewarding efficiency.
  Mr. President, many private businesses are already using cash 
incentives to reduce health care costs while, at the same time, 
achieving great employee satisfaction with the health care afforded 
them. MSA's provide workers with a great deal of choice and freedom. A 
study by the Rand Corp. estimates that MSA's could help low-income 
workers reduce health care spending by up to 13 percent.
  In a truly American way, MSA's harness free enterprise to promote 
sorely-needed efficiencies in the health care economy.
  The fight over MSA's is fundamentally about power. MSA's return power 
to the American worker. Proponents of socialized medicine recognize 
that once MSA's are passed, they will dramatically become a bulwark 
against the liberals' hopes for a government-controlled health care 
system. Although this limited MSA program will not and cannot instantly 
solve the problem of the affordability and availability of health 
insurance, it will be a major step in the right direction.
  Mr. President, the majority of Americans are calling for health care 
reform. I believe further progress can be made by further changes in 
the Tax Code. But this legislation puts us on the right track.
  Mr. LEAHY. Mr. President, today over 62,000 Vermonters are included 
in the 40 million Americans who are without health insurance. 
Unfortunately, this number is increasing every year. Health insurance 
has simply become less available and affordable.
  The health insurance reform bill before us today is a small step, but 
a step in the right direction. It puts an end to the practices of 
denying health insurance to people with chronic illness and denying the 
renewal of policies of people that become ill. It makes health care 
more affordable by increasing the health insurance tax deduction for 
self-employed individuals from the current 30 percent to 80 percent 
over the next 10 years and makes the cost of long-term care, such as 
expenses for nursing home and home health care, tax deductible just as 
other medical expenses are today.

[[Page S9523]]

  The passage of this bill is a hard-won battle. I do have concerns, 
however, about the magnitude of the experimental provision to allow 
750,000 health care policies to be withdrawn from traditional insurance 
system to create a medical tax shelter for routine medical bills. I 
plan to watch this demonstration closely to make sure that it does what 
it is intended to do--increase the number of insured--and not just 
increase premiums for people that have traditional health insurance 
policies.
  While, as I said, this bill moves us in the right direction, I have 
to be clear that its passage is bittersweet. This bill does not address 
the larger issue of the skyrocketing cost of health care which will 
continue to be a looming problem that Americans face. And I am 
disappointed that the final bill does not include a provision to end 
discrimination against people with mental illness by requiring insurers 
to treat mental illness coverage the same as coverage for physical 
conditions.
  I am also very concerned that the bill before us today calls for 
nationwide data networks for health information to be established 
within 18 months but contemplates delay of the promulgation of any 
privacy protection for 42 months. That is not the way to proceed. When 
the American people become aware of what this law requires and allows 
by way of computer transmission of individually identifiable health 
information without effective privacy protection, they should demand, 
as I do, prompt enactment of privacy protection.
  Despite these concerns, the steps that this bill takes are long 
overdue. Two years ago, Congress was engaged in a great battle over how 
to get health care costs under control and make health care services 
available to all Americans. That battle heeded few results and left 
millions of Americans frustrated and disappointed that health care 
would continue to be out of their reach. The obstacles that prevented 
Americans from buying health insurance have not gone away and Congress 
now owes it to Americans to pass this bill to address some of the 
issues that these individuals face.
  Mr. KERREY. Mr. President, I strongly support Senate passage of H.R. 
3103, the Health Insurance Portability and Accountability Act of 1996. 
I am proud to have been an original cosponsor of its predecessor, S. 
1028, the Kennedy-Kassebaum proposal that was originally introduced in 
July of last year. Although I do not believe that this legislation is 
as strong as the bill that passed the Senate last April, these changes 
are still long overdue. As many as 25 million Americans will benefit 
from these modest yet meaningful reforms to the insurance market--as, 
for example, they move from job to job or lose employer-sponsored 
coverage as the result of corporate downsizing.
  This bill takes an incremental approach to health care reform by 
fixing the most egregious flaws in our employer-based health insurance 
system. I believe that we must move far beyond this bill, to 
comprehensive health care reform, in order to ensure that every 
American and legal resident knows that they have health insurance 
coverage. However, we must do what we can, now, to make the first 
needed changes to the American health care system.
  Right now, we can help the many Americans who are currently excluded 
from meaningful health coverage because they are subject to preexisting 
condition exclusions or are unable to purchase an individual policy. 
This bill will address these significant problems.
  This bill's great strength is that it will enable American workers to 
respond to our changing economy. Today, workers risk losing their 
existing coverage when they seek new skills or new opportunities. If 
they can find a replacement policy through a new employer or in the 
individual market, it may leave them under-insured. They can be subject 
to a preexisting condition exclusion that excludes a part of their 
body, or a significant health problem, from coverage, even though they 
have maintained insurance coverage for many years. Because of these 
constraints, many Americans don't dare switch employers or career-
paths. This job-lock phenomenon, which has reportedly affected 25 
percent of all Americans, would be eliminated by this bill.
  In addition, the portability and renewability protections in this 
bill will give more Americans the health coverage flexibility they need 
to survive in our changing economy. This bill takes a responsible 
approach to ensuring continued access to health care--in the individual 
market if necessary--for workers who are displaced by corporate 
downsizing and other lay-offs. Because our economy is fluid and 
unpredictable, we need to fix these flaws in our employer-based health 
insurance system.
  I believe that this is critically important legislation, but I also 
believe that this legislation could have been better. It should have 
included provisions requiring equitable treatment for mental health 
care--if not the parity provision originally championed by Senators 
Domenici and Wellstone, then the compromise proposal on benefit limits 
that Senator Domenici introduced today. I am also concerned that the 
portability provisions for group to individual coverage were weakened 
by the conference committee. I think that the original bill's 
guarantees for individuals who lose group coverage and seek insurance 
in the individual market took the right approach. Insurers should be 
required to offer a broad range of insurance policies to these 
customers. The conference agreement will allow insurance companies to 
offer only two policies--and even though the bill includes some 
requirements for these plans, I am concerned that insurers may be able 
to charge these individuals exorbitant rates.
  I also can't pretend that this proposal will fix all of the problems 
in the American health care system. Many Americans will benefit from 
this proposal. But many of the 40 million Americans who are currently 
uninsured will not be among them. I am particularly concerned that so 
many children continue to be uninsured. In a recent study, the GAO 
analyzed the recent decline in health insurance among children and 
concluded that this decline in coverage has been concentrated among 
low-income children. This report also noted that the proportion of 
children who are uninsured--14.2 percent, or 10 million children--is at 
the highest level since 1987. I believe that all children should have 
health insurance, and that this insurance should cover children's 
complete developmental needs.
  In addition, health insurance premiums will continue to be 
unaffordable for many, and the significant individual insurance market 
reforms will not affect people who are already uninsured. Our 
population will continue to age and Medicare and Medicaid spending will 
therefore continue to escalate. Overall health expenditures--Federal 
and State programs, private insurance and out-of-pocket spending which 
already consume more than 12 percent of GDP--will continue to grow.
  We need to recognize that these insurance reforms represent an 
important step, but only a first step. Until all Americans are 
guaranteed health coverage, we cannot claim to have fixed the health 
care crisis. We clearly failed 2 years ago. We need to ensure that 
every American, regardless of their ability to pay or the generosity of 
their employer, maintains a meaningful right to health care. We also 
need to ensure that every American bears their individual 
responsibility pay for their health care--to the extent possible--and 
the information they need to make informed decisions about the quality 
and price of their care.
  I applaud Senators Kassebaum and Kennedy for their determination and 
hard work on this bill. Their efforts, over a number of months, to 
bring this proposal up before the Senate, and their perseverance since 
the Senate passed this bill in April, have been remarkable. I believe 
that the compromises included in the conference report reflect the 
legislation's original intent to improve access to health insurance for 
millions of working Americans. We still have worked to do, but this 
bill is a meaningful first step.
  Mr. HATCH. Mr. President, it has been a long journey to this moment 
in history, as we prepare to approve the conference agreement on H.R. 
3103, the Kassebaum/Kennedy Health Insurance Reform Act of 1996, and 
send it to the President for his signature. What we thought would be a 
sprint because the ideas made so much sense turned out to be a 
marathon.
  As one of the original cosponsors of this important legislation, I am

[[Page S9524]]

pleased the impasse which prevented this bill from moving forward has 
been resolved.
  After months of delay, the American people will soon realize the 
benefits of the time and energy that have been devoted in making this 
legislation a reality.
  The Republican leadership in the House and Senate are to be commended 
for their steadfast commitment to reach an agreement with the White 
House on such contentious issues as medical savings accounts, insurance 
portability, mental health parity, and advisory opinions.
  Overall, this legislation embraces many key elements of health care 
reform that have been pending in Congress for over five years, even 
before the 1994 health care overhaul proposal by President and Mrs. 
Clinton.
  In my opinion, H.R. 3103 is a good bill. It represents meaningful, 
workable, and targeted health care reform that will provide a 
significant measure of assistance to millions of Americans.
  The underlying insurance reforms included in the bill have now been 
enhanced by additional provisions that strengthen and improve the scope 
of the legislation.
  Although much of the controversy over the past several months 
centered on issues unrelated to the insurance provisions, it is 
important that we not lose sight on the importance of the insurance 
reforms.
  This bill will provide greater assurance to an estimated 25 million 
Americans that they can carry their health insurance coverage from job 
to job, without losing that protection, as well as obtain health 
insurance irregardless of preexisting health problems.
  These protections are clearly the hallmark of the Kassebaum/Kennedy 
bill.
  These protections are important because access to health insurance 
remains one of the fundamental problems facing Americans in today's 
health insurance market. The unfortunate fact of today's insurance 
market is that there is too little protection for individuals and 
families with significant health problems.
  This legislation is clearly aimed at correcting that problem.
  By restricting the use of preexisting limitations or exclusions on 
individuals, H.R. 3103 will increase access to health coverage as well 
as provide portability of insurance coverage for those wishing to 
change jobs.
  Although these changes have been described as incremental by some, 
they are significant improvements in the manner in which Americans 
obtain health insurance. Through the enactment of this bill, Congress 
is sending a message that the status quo is unacceptable.
  This bill will help a significant number of people and for that 
reason alone it is worthy of passage.
  Aside from the insurance reforms, there are a number of other 
provisions added in the House and on the Senate floor to the underlying 
insurance bill.
  For example, the bill creates a newly coordinated Federal, State and 
local health care antifraud and abuse program that will dramatically 
increase the enforcement authority of the Departments of Health and 
Human Services and Justice.
  As Chairman of the Senate Judiciary Committee, I have been 
particularly interested in the development of the antifraud provisions. 
It is clear from the hearings conducted in the Judiciary Committee as 
well as other committees in Congress that more effective law 
enforcement tools are needed to fight health care fraud.
  The problems have been well-documented by the distinguished Senator 
from Maine, Senator Cohen, who developed the underlying legislation 
from which many of the fraud provisions of H.R. 3103 were developed.

  I strongly support tough and effective measures to address fraud and 
abuse. But in our efforts to deter, detect and prosecute fraudulent 
behavior, we need to ensure that these efforts do not penalize innocent 
behavior or unintentionally bog down the delivery of health care.
  The practice and delivery of health care is overwhelmingly conducted 
by honest and well meaning individuals who should not be suspected of 
wrongdoing merely because they are physicians, hospital administrators 
or other health care providers.
  Creating a cloud of suspension over the entire health care community 
will not solve the fraud problem when only a few are guilty of 
wrongdoing.
  We need to ensure that new antifraud and abuse provisions provide 
clear and unambiguous guidance on what constitutes fraudulent behavior.
  Equally important is that antifraud provisions avoid penalizing 
innocent individuals for inadvertent or clearly innocent behavior.
  I would remind my colleagues that antifraud proposals over the past 
several years have essentially proposed to expand the scope of existing 
antifraud and abuse laws applicable to health care providers. A clear 
case is the application of the antikickback laws which are, at best, 
complex and confusing and are not easily conveyed in the context of 
managed care.
  Overly broad applications of these laws are particularly worrisome.
  As an example, the legislation creates a new Federal criminal statute 
under title 18 of the U.S. Code against health care fraud. Fines and 
imprisonment for up to 10 years can be imposed for violating provisions 
of the new statute.
  Within the practice of health care, legitimate disagreements 
regarding medical judgment and treatment decisions should not be cause 
for imposing legal penalties. It is critical that the antifraud 
provisions be carefully crafted to avoid punishing unintentional acts 
by health professions.
  Accordingly, I am pleased the conference report contains language I 
proposed that specifically defines any new Federal health care offense 
to include both a knowing and willful standard of intent.
  The addition of willful in this standard is essential to ensure that 
inadvertent or accidental conduct is not deemed criminal. The standard 
is now clear that criminal liability will be imposed only on an 
individual who knows of a legal duty and, intentionally, violates that 
duty.
  Without this clarification, legitimate disagreements regarding a 
physician's medical judgment and treatment decisions could have been 
the basis for imposing criminal penalties.
  Another issue which surfaced during consideration of the antifraud 
provisions concerned the impact on the provision of alternative and 
complementary health care.
  As my colleagues know, I have championed the cause of alternative and 
complementary medicine. I am sensitive to concerns within this 
community regarding unintended negative implications of the fraud 
language on the provision and practice of nontraditional and nonmedical 
forms of health care.
  I want to make it clear to my friends in the alternative and 
complementary medicine community that under this bill the practice of 
complementary, alternative, innovative, experimental or investigational 
medical or health care itself, will not constitute fraud.
  I have specifically addressed these concerns in the legislative and 
conference report language to clarify any misunderstandings or 
ambiguity arising from the implementation of the fraud provisions.
  In this regard, I want to thank the National Nutritional Foods 
Association, the American Chiropractic Association and the American 
Preventive Medical Association for their input.
  While it is easy to focus only on the laudable benefits of the 
insurance provisions in this bill, because they are so important, we 
must not lose sight of the very significant tax provisions that are 
also included in this legislation. These provisions will work to make 
health insurance more affordable, to ease the financial burdens of 
long-term care, and to allow individuals to use individual retirement 
account funds for catastrophic health expenses without penalty.
  Mr. President, I am very pleased that this bill increases the 
percentage of health insurance costs that can be deducted by the self-
employed to 80 percent. This provision takes a huge step toward 
correcting what has long been a gross inequity. No one has ever been 
able to defend the policy of allowing corporations to fully deduct 
health insurance expenses, but allowing the self-employed to deduct 
only a small portion. At a time when we are trying to encourage the 
creation of new businesses, especially by those who have

[[Page S9525]]

been laid off from large corporations over the past few years, this 
lack of full deductibility has been a real disincentive.
  Although this bill takes us most of the way there by getting to 80 
percent deductibility, I want to note that our job is far from finished 
in this area. First, 80 percent is not enough. We must find a way to go 
the rest of the way and allow for full deductibility.
  Second, under this bill, it takes us 10 years to go from the 35 
percent that is deductible under the current law to the 80 percent 
level that this bill finally provides. I urge my colleagues to not sit 
back and relax on this issue. I hope that in the next Congress, we can 
find a way to get to full deductibility and sooner.

  The long-term care provisions of this bill are also very important, 
Mr. President. As our population ages, millions of families will find 
themselves facing the problem of how to pay for needed health care for 
aged loved ones. Up until now, the Medicaid program has borne the brunt 
of these expenses in cases where the individual or family did not have 
the resources to cover the often very significant cost of nursing home 
care or skilled nursing assistance.
  It is clear, however, that our Medicaid system will simply not be 
adequate to cover such expenses as we move into the next century and 
the public's capacity to pay for these huge expenses are pushed beyond 
the limit.
  The bill before us begins to address this problem by making it easier 
for individuals and families to pay for long-term care insurance, 
easier for insurance companies to provide such coverage, and more 
beneficial to employees of companies that provide such insurance as 
part of an employee benefit package. These changes are key in moving 
the majority of the responsibility for long-term care expenses from the 
public sector to families and individuals.
  Many of these tax provisions are very similar to changes I have long 
advocated in long-term care legislation. These provisions are, in fact, 
comparable to the long-term care provisions included in the quality 
care for life legislation I introduced earlier in this Congress. I 
believe these provisions will serve to begin to shift public attitude 
from one largely of government dependence to one of personal 
responsibility. Private insurance is vital to making this shift, and 
these provisions will all make it much easier for insurance to be a 
viable alternative.
  Mr. President, I also want to comment on a small, but important, 
provision, that will help thousands of Americans who are hit by high 
medical expenses. This bill allows for penalty-free withdrawals from 
individual retirement accounts to pay medical expenses that exceed 7.5 
percent of the taxpayer's adjusted gross income.
  When the IRA concept was first enacted into our tax law, penalties 
were placed on early withdrawals to discourage any use of the money 
beside that for which it is mainly intended--to provide funds for 
retirement. This was wise, Mr. President.
  However, we also need to recognize that when devastating illness 
strikes a family, the need for cash is immediate. This provision helps 
in cases where a family is hard hit with medical expenses but has the 
means to help pay them in IRA funds. I also commend the provision that 
allows IRA funds to be used to pay for health insurance premiums in 
cases of unemployment. This provisions should help many families who 
might face the ugly choice of dropping health care coverage when the 
paycheck temporarily stops.
  Also included in the conference report is a four year pilot project 
for medical savings accounts, or MSA's.
  Beginning in 1997, MSA's are available to employees covered under an 
employ-sponsored high deductible plan of a small employer or self-
employed individual. Taxpayers (including the self-employed) will be 
allowed to make tax-deductible contributions within limits of an MSA.
  The number of taxpayers benefiting annually from an MSA contribution 
would be limited to a threshold level of 750,000 taxpayers.
  I strongly support MSA's. I believe they will provide needed 
incentives for Americans to become more cost conscious as purchasers of 
medical services. MSA's will clearly give people more control over 
their health care dollars with the opportunity to save unspent MSA 
dollars for future health and long-term care needs.
  Mr. President, overall this legislation represents an appropriate 
balance between the role of the Federal Government with the private 
insurance market in addressing the health-related problems currently 
facing many of our citizens.
  However, we must recognize that we are breaking new ground with the 
enactment of this bill. The level of Federal involvement proposed in 
H.R. 3103 in the affairs of the historically private marketplace of 
insurance products does indeed raise concerns. We will not ignore these 
concerns in the implementation of this new legislation, and we will 
review carefully the long-term impact of these provisions.

  Mr. President, I would also like to say to the gentleman from New 
Mexico, Senator Domenici, that I, too, am disappointed that the 
conferees could not work out language on mental health.
  I voted for that amendment, because I strongly believe we need to do 
more to address the problem of mental health insurance coverage for the 
millions of Americans who suffer from mental illnesses that are as 
devastating to individuals and families as physical ones.
  During our preconference sessions, I worked with my colleagues to see 
if there were alternatives to parity which could be pursued in this 
legislation, because I truly believe that we are not doing enough on 
mental health. One idea I put forward was to direct increased resources 
to mental health through the Substance Abuse and Mental Health Services 
Administration.
  I put this proposal forward in a good-faith effort to increase our 
federal presence on mental health. I understand the concerns of my 
colleagues that this would not go far enough when compared to the 
Domenici amendment, but nevertheless I regret that the bill does not 
contain any mental health provision. I will continue to work with my 
colleagues on this issue.
  Nevertheless, on balance, I am convinced that this bill will serve 
the interests of the American people who have long sought responsible 
health insurance reform.
  Finally, Mr. President, I would be remiss if I did not take this 
opportunity to recognize the efforts of the distinguished Chairman of 
the Committee on Labor and Human Resources, Senator Kassebaum, who is 
to be commended for her leadership and perseverence, in developing this 
legislation.
  I can think of no fitting tribute to her than the enactment of this 
health reform bill.
  Her dedication, hard work, and common sense have been hallmarks of 
her career in the U.S. Senate.
  Let me also thank the ranking minority member, Senator Kennedy, who 
has also been an instrumental player and leader in the development of 
this legislation.
  I urge my colleagues to support the conference report to H.R. 3103.
  Mr. KENNEDY. Mr. President, I yield myself the remaining 2 minutes.
  Today, in spite of 18 months of Republican attempts to deny a pay 
increase to the most underpaid American workers, Congress will, at long 
last, send the President legislation to raise the minimum wage. 
Finally, 5\1/2\ years after the minimum wage was last increased, 
Congress is taking steps to ensure that all workers can earn a living 
wage.
  This day has been a long time coming; 18 months ago, in February 
1995, I introduced legislation to raise the minimum wage to $5.65 an 
hour in three 50-cent increments, and joined Senator Daschle 1 month 
later to introduce S. 413, which would have raised the minimum wage by 
90 cents in two increments--on July 1, 1995 and July 1, 1996.
  A year ago, on July 31, 1995, I offered a resolution expressing the 
sense of the Senate that the Senate should take up the minimum wage 
increase before the end of last year. It received only two Republican 
votes and was defeated.
  I was unable to get a hearing on our bill until December, and--month 
after month--the Republican chairman of the Labor Committee refused to 
schedule a markup session to consider it.
  Finally, with the very skillful assistance of the Democratic leader, 
Senator Daschle, I was able to offer our bill as

[[Page S9526]]

an amendment to another bill in March, and obtained a strong vote in 
favor of a 90-cent increase in the minimum wage. The Republican leader 
at the time, Senator Dole, responded by pulling the parks bill from the 
floor of the Senate. He then tied the Senate in procedural knots for 
weeks, rather than allow a second vote on our bill.
  It was only after Senator Dole left the Senate to campaign for the 
Presidency that we succeeded in scheduling a vote on our bill, and only 
after threatening to shut down the Senate. I hope every American 
remembers that this victory for the working poor became possible only 
after Senator Dole left Washington to become a private citizen.
  Now 13 months have passed since the first of the increases in our 
original bill would have taken effect. The Republicans' delaying 
tactics have cost minimum wage workers almost $4 billion. I hope every 
American remembers how tenaciously and how long the Republicans have 
fought to prevent this increase in the minimum wage.
  By contrast, in vote after vote, my Democratic colleagues have been 
united in their support of fair wages for all workers. I want to salute 
them for that unity and thank them for their support throughout this 
long fight.
  Thanks to the perseverance of my Democratic colleagues, the poorest 
American workers will see their incomes increase by 22 percent. By the 
time next year that the second increase takes effect, they will see 
their incomes increase by $1,800 a year, enough to pay for 7 months of 
groceries or a year of community college.
  Unlike the punitive welfare reform bill Congress has just passed, 
this raise in the minimum wage will actually improve the lives of 
millions of people. It will lift 300,000 people out of poverty, 
including 100,000 children, and save families across the Nation from 
having to make cruel economic decisions, such as choosing between 
keeping the utilities turned on and paying for groceries or medicine.
  The real problem for much of the welfare population is their 
inability to find jobs that pay enough to support them and their 
families. If work does not pay a living wage, requiring welfare mothers 
to work will do nothing to end their poverty.
  It is unfortunate that this good legislation for low-wage workers was 
coupled with a package of tax giveaways to large and small businesses. 
I regret that many objectionable changes to our tax laws are being made 
under the cover of raising the minimum wage.
  On balance though, H.R. 3448 is legislation that should be passed. 
This long awaited raise in the minimum wage should be delayed no 
longer.
  These are important factors for hard-working men and women in this 
country. This is an extremely important achievement and accomplishment. 
I look forward to casting my vote in favor of the increase in the 
minimum wage.
  Mrs. KASSEBAUM. Mr. President, I say how very grateful I am to so 
many for all of the efforts that have gone into making the passage of 
the House insurance reform possible tonight.
  It is not possible to name all the names, and I ask unanimous consent 
they be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Labor Committee: Dean Rosen, Susan Hattan, Anne Rufo, David 
     Nexon, Lauren Ewers.
       Finance Committee Majority: Lindy Paull, Frank Polk, Julie 
     James, Mark Prater, Doug Fisher, Gioia Bonmartini, Alex 
     Vachon, Brig Gulya, Sam Olchyk, Donna Ridenour.
       Minority: John Talisman, Patti McClanahan, David Podoff, 
     Laird Burnett, Keith Lind.
       Majority Leader: Annette Guarisco, Vicki Hart, Susan 
     Connell.
       Minority Leader: Rima Cohen.
       Joint Committee on Taxation: Ken Kies, Mary Schmitt, 
     Carolyn Smith, Cecily Rock, Brian Graff, Judy Xanthopoulos.
       Congressional Research Service: Beth Fuchs, Madeleine 
     Smith, Kathleen Swendiman, Jennifer O'Sullivan, Celinda 
     Franco.
       Thanks to the staff of: House Ways and Means Committee--
     particularly Chip Kahn, Elise Gemeinhardt, and Kathy Means; 
     House Commerce Committee--Howard Cohan, Melody Harned; House 
     Economic Opportunities Committee--Russ Mueller; Congressional 
     Budget Office Staff; House and Senate Legislative Counsels--
     particularly Bill Baird, Ed Grossman, John Goetcheus, and 
     Julie Miller.

  Mrs. KASSEBAUM. Without the dedicated efforts of our staff, it would 
not have been possible. I mention Dean Rosen, Susan Hattan of my staff, 
and David Nexon and Lauren Ewers of Senator Kennedy's staff, and many 
others who have spent countless time and effort.
  It is an important piece of legislation. I am very proud we have 
accomplished it in a bipartisan fashion. It could not have been done 
without them.
  Senator Kennedy mentioned the minimum wage legislation which we will 
be voting on as well, in back-to-back votes. I will speak after those 
votes on something I regard very important to the success of both 
welfare reform and the minimum wage, and that is job training programs.
  Without our willingness to be more innovative and skillful in how we 
handle job training problems, we will not succeed with the type of 
welfare reform or minimum wage that enables us to have skilled young 
people and retrained older people entering our job markets. I think 
that is an important component of the success of those bills.
  I yield any remaining time, but say again how proud and grateful I am 
to all who have had a hand in the passage of this legislation.

                          ____________________