Congress poised to pass incremental health reform

On April 23, by an overwhelming margin of 100 - 0, the U.S. Senate voted to pass the Kennedy/Kassebaum health reform bill, a modest proposal which is designed to help those currently with health insurance keep it if they lose their job, and to help those with health problems deemed "pre-existing conditions" by the insurance industry get or keep insurance coverage.

While this legislation does not get us much closer to universal coverage, which must remain our ultimate health reform goal, it will level the playing field for many Americans who lose their employer provided coverage. Added to the bill in the Senate was pro-consumer language which requires health insurers to treat mental illness the same as a physical illness.

The insurance industry and other business lobbyists oppose this language because they claim it will sharply raise premium rates, despite studies which indicate that employee productivity and overall health improves with affordable access to mental health services. Bringing parity to mental health coverage will help many families who have been devastated, both financially and emotionally, by the mental illness of a loved one.

The Senate defeated language included in the House version which would have provided taxpayer subsidies for employers, individuals and families who establish Medical Savings Accounts (MSAs) in conjunction with high-deductible insurance policies. MSAs are being heavily promoted by Indiana-based Golden Rule Insurance Company and its CEO Patrick Rooney.

Rooney has invested hundreds of thousands of dollars in political contributions to the Republican leadership (especially Newt Gingrich) and has been rewarded with MSA language in the House version of this bill, and in the Republican plans for Medicare. Golden Rule is one of the major brokers of individual, high deductible insurance policies in the country, making this legislation an absolute financial boondoggle for them. The Senate was correct in deleting this language from the bill.

While MSAs might sound appealing for families with healthy members, they would seriously undermine efforts to make the health care system more equitable and cost effective. In testimony before Congress, consumer advocates urged rejection of MSAs for the following reasons:

MSAs attract the young and healthy, leaving traditional health insurance with the oldest and sickest enrollees (known as adverse risk selection).
Cost shifting to the traditional health insurance enrollees will result from adverse risk selection.
MSA enrollees have a financial incentive to skimp or forego necessary (and cost-effective) preventive services.
Tax exemptions for MSAs would drain an additional $1.8 billion from federal revenues, contributing to the budget deficit.
MSAs would be expensive to administer.
Lack of standards for the high deductible plans leave consumers at risk of having claims rejected arbitrarily, with no room for appeal.
MSAs put consumers at grave financial risk in the case of catastrophic illness. A consumer with a $2,000 balance and a $10,000 deductible faces $8,000 in out-of-pocket costs.

One of the health access problems not addressed by the Kennedy/Kassebaum legislation is that of job lock. It will not help those who cannot change jobs because the new employer does not offer health insurance, cannot change jobs because the new employer does not contribute as much (or anything) toward the cost of coverage, cannot change jobs because the new employer's coverage does not include dependents, or cannot change jobs because the new employer's coverage doesn't include benefits needed for their preexisting condition.

Clearly we have a long way to go before universal and affordable health insurance is a reality for all Americans. Although it is not as far-reaching as some would claim, the Kennedy/Kassebaum bill, as passed by the Senate, would be a small step forward. Hopefully it will not fall victim to political wrangling in conference committee and will be signed into law by President Clinton this summer.

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