[Congressional Record Volume 144, Number 29 (Tuesday, March 17, 1998)]
[Senate]
[Page S2104]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




IMPLEMENTATION OF KASSEBAUM-KENNEDY HEALTH INSURANCE REFORM LEGISLATION

  Mr. KENNEDY. Mr. President, a recent GAO report makes clear that 
significant insurance company abuses are undercutting the effectiveness 
of one of the key parts of the Kassebaum-Kennedy health insurance 
reforms enacted in 1996.
  President Clinton announced today that he has called for vigorous 
enforcement against companies that are violating the law. But it is 
abundantly clear that additional action by Congress is needed to end 
the worst abuse--price-gouging by the insurance industry. I intend to 
introduce legislation this week to block that irresponsible practice.
  Individuals who lose their group coverage and attempt to obtain 
individual coverage are being charged exorbitant premiums by insurance 
companies. We recognized that potential problem in 1996, but Republican 
opposition blocked any Federal role in preventing such abuse, on the 
ground that state regulation would be an adequate remedy. As the GAO 
report makes clear, state regulation is no match for insurance industry 
price-gouging.
  The 1996 legislation was enacted in response to several serious 
problems. Large numbers of Americans felt locked into their jobs 
because of pre-existing health conditions which would have subjected 
them to exclusions coverage if they changed jobs.
  Many more who did change jobs found themselves and members of their 
families exposed to devastating financial risks because of exclusions 
for such conditions. Other families faced the same problems if their 
employers changed insurance plans. Still others were unable to buy 
individual coverage because of health problems if they left their job 
or lost their job and did not have access to employer-based coverage.
  The legislation addressed each of these problems. It banned 
exclusions for pre-existing conditions for people who maintained 
coverage, even if they changed jobs or changed insurers. It required 
insurance companies to sell insurance policies to small businesses and 
individuals losing group coverage, regardless of their health status. 
It banned higher charges for those in poor health in employment-based 
groups.
  A GAO study in 1995 had found that 25 million Americans faced one or 
more of these problems and would be helped by the Kassebaum-Kennedy 
proposal. For the vast majority of these Americans, the legislation is 
working well. They can change jobs without fear of new exclusions for 
pre-existing conditions, denial of coverage, or insurance company 
gouging.
  But as the GAO study makes clear, many of the two million people a 
year who lose employer-based group coverage are vulnerable to flagrant 
industry price-gouging if they try to purchase individual coverage.
  When the 1996 act was moving through Congress, Democrats sought to 
place clear federal limits on these premiums for individual coverage. 
The Republican majority in Congress and the insurance companies refused 
to compromise on this issue--and restrictions on price-gouging were 
largely left to state law. Many States have put limits on such 
premiums, or enacted special group coverage for high-risk persons.
  But too many states have failed to act effectively to prevent abuse. 
In addition to price-gouging, some companies have encouraged insurance 
agents to refuse to sell policies to individuals and imposed long 
waiting periods for coverage of particular illnesses and other 
unacceptable practices.
  The verdict of experience is in. The GAO report makes clear that 
insurance companies are guilty of abuse beyond a reasonable doubt, and 
Congress has to act.

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