ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, March 29, 1996 TAG: 9603290078
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Dallas Morning News
House Republicans easily beat back Democratic procedural challenges Thursday as they won approval of a bill guaranteeing insurance for people who switch jobs. The vote was 267-151.
The legislation is the first major effort to expand health insurance coverage to reach the floor of either chamber since the demise of President Clinton's ambitious health plan in September 1994.
Republicans praised the bill as a big step toward affordable, portable health care. Democrats called it a small but helpful dose of common sense, but charged that GOP leaders had ``poisoned'' it with many favors for special interests.
Senators plan to vote next month on a streamlined version known as the ``Kennedy-Kassebaum'' bill.
Both the Senate and House versions would:
* Guarantee that workers who lose coverage when they quit a job could sign on a new policy through their new employer.
* Require insurers to offer individual coverage to anyone who has been covered by another plan for at least 18 months. The bills impose no ceiling on premiums, however.
* Limit insurance companies to a 12-month period before they begin coverage for pre-existing medical problems.
* Forbid cancellation of insurance policies because of illness.
There is broad bipartisan agreement on those regulations, which supporters say could help at least 25 million Americans who might otherwise lose coverage if they changed jobs.
House Republicans and Democrats also agree that self-employed people should receive a larger tax deduction for their health insurance premiums. Current law permits a 30 percent deduction. Republicans want to raise that to 50 percent, Democrats to 80 percent.
The House Republican measure, however, also includes several items that President Clinton opposes.
Thursday's debate focused on those, including caps on punitive damages in medical malpractice lawsuits and creation of tax-exempt medical savings accounts.
Medical savings accounts have been advocated most forcefully by the Golden Rule Insurance Co., which for the past few years has been among the largest donors to the Republican Party.
Many hospital and medical groups also favor MSAs because patients using them would pay most bills out of their own pockets - reducing red tape and avoiding the controls insurance companies impose on fees and reimbursements.
MSAs would function like Individual Retirement Accounts. Contributions to them would be tax-free, as would interest earnings. People choosing them would have to buy private insurance policies with deductibles of $1,500 for individuals or $3,000 for families. Annual medical costs below that limit would be paid directly from the MSA.
Democrats, however, say MSAs would be tax shelters for richer Americans, while the high deductibles would scare away unhealthy people.
If healthier families do choose MSAs, they say, premiums for the sicker people left behind in traditional insurance are bound to rise.
Virginia Rep. James Moran, a Democrat from Alexandria, said Golden Rule's own financial reports showed that it paid out only 56 cents in benefits of every dollar in revenues. That, he argued, shows MSAs would be a bad deal for consumers.
Rep. Sam Johnson, R-Texas, said the accounts ``offer all Americans the chance to buy a plan that best meets their individual needs.''
The cap on punitive damages in malpractice lawsuits has long been sought by another powerful GOP constituency, the medical industry.
Ways and Means Committee Chairman Bill Archer, R-Texas, said it eliminates a major cause of rising health care costs. Democrats, supported by trial lawyers who sue doctors, said the measure would merely punish patients harmed by their doctors.
The bill permits patients who win lawsuits to collect punitive damages of no more than $250,000 or three times economic damages, whichever is greater. It overrides state laws providing for higher damages.
The GOP plan took criticism from one unusual quarter Thursday: state insurance regulators. They said the bill violated Republicans' general commitment to move power away from Washington, by federalizing regulation of plans under which small businesses pay workers' health bills directly, instead of buying coverage from insurance firms.
The National Association of Insurance Commissioners called that ``extremely damaging to states' authority to govern their own insurance market.''
That provision was strongly supported by small-business owners.
Neil Trautwein, the U.S. Chamber of Commerce's manager of health care policy, said federal intervention was needed because states have required employers to provide overly generous benefits.
``State legislatures have found the lure of benefit mandates almost impossible to ignore,'' he said. ``The effect of that is to continue to price coverage out of the reach of small employers.''
LENGTH: Medium: 93 linesby CNB