House Republicans to Offer Their Own Sweeping Health Care Reform

Seeking to outdo their Senate counterparts, House Republicans on Friday announced a sweeping health care reform initiative that they said will ease middle-class fears of being priced out of the market or losing coverage after changing jobs.

But the bill’s broad scope invites a tidal wave of opposition that could cause its collapse in a manner reminiscent of the ambitious agenda pursued by President Clinton in 1994.

House Republicans said their legislation would lead to affordable coverage for as many as half the 41 million uninsured Americans--largely by requiring insurers to sell policies to all, regardless of health status, while allowing insurers to impose only limited coverage restrictions.

The resulting “portability” of medical insurance, proponents said, would eliminate the “job-lock” phenomenon, in which workers reject better job opportunities for fear that they or their dependents will be denied coverage by the new employer’s health plan.

The bill, still being drafted, also would:

* Increase from 30% to 50% the tax deduction that the self-employed may claim for insurance premiums.

* Enable small employers to form insurance-buying alliances to command better bargains in the market.

* Create tax-sheltered medical savings accounts for all Americans. The accounts, funded with pretax dollars, would be used to pay medical bills. Unused funds would accrue over the years to pay for long-term care.

* Cap at $250,000 the noneconomic damages that victims of medical malpractice could collect.

Many of the provisions were a part of the massive seven-year balanced-budget bill that was vetoed by Clinton, who made no secret of his opposition to the malpractice reforms and medical savings accounts.

The bill, with its array of controversial issues, also faces opposition from powerful interest groups.

Among the bill’s opponents are the National Governors’ Assn., the National Conference of State Legislatures and the National Assn. of Insurance Commissioners. They object to provisions that would exempt small-group employers from state insurance regulation, a status enjoyed by large, self-insured companies that pay their own health care bills.

Another potential pitfall is the bill’s price tag of about $3 billion over five years, although its Republican sponsors vowed to find spending cuts to offset the new outlays to avoid adding to the federal budget deficit.

Senior House Republicans, including the chairs of key committees and subcommittees, said they would press for the bill’s enactment this year, even though Clinton might veto it. If that were to happen, they believe, they would have a powerful campaign issue against the Democratic president who put health care reform on the national agenda.

In the meantime, House Republicans hope that their health care reform proposal will address some of the job-security concerns raised by GOP presidential contender Patrick J. Buchanan that have resonated with voters.

In the Senate, a far more modest health care reform bill is scheduled for consideration next month. Passed unanimously by the Labor and Human Resources Committee, the bill would bar insurers from denying coverage for preexisting conditions to those who leave their jobs and then seek either to join another group plan at their new workplace or to buy individual coverage after becoming self-employed--so long as, in either case, they had continuous prior coverage for at least 18 months.

But the bill, authored by Sen. Nancy Landon Kassebaum (R-Kan.), who chairs the panel, would allow insurers to withhold coverage for as long as 12 months for such conditions.

That clause, a similar version of which is in the House bill, is intended to keep consumers from buying coverage only when they know they need it.

The insurance industry--particularly firms that sell individual policies--does not object to a federal guarantee when a consumer goes from one group plan to another, typically in a job change. But it vehemently opposes a federal mandate requiring continued coverage for a person who goes from a group plan to an individual policy.

That practice, industry leaders have said, can result in premium increases of 10% or more for all individual policyholders, thereby pricing some out of the market. That projection is based on the industry’s assumption that many newcomers to the individual-policy market tend to have illnesses or conditions that lead to high costs.

An independent analysis by the American Academy of Actuaries puts the increase in premiums at 2% to 5%.

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The controversy over this issue alone is enough to cloud the Kassebaum bill’s prospects. But additional perils loom. Several senators intend to add to the measure their pet health care issues, such as banning lifetime limits on what a policy would pay. Such moves, if successful, would make the Senate bill even more controversial. Indeed, some current backers--such as the National Assn. of Manufacturers and the U.S. Chamber of Commerce--already have said that they would not only withdraw their support, but would fight to defeat the measure.

Clinton has endorsed the Kassebaum bill, and Rep. Marge Roukema (R-N.J.) has introduced a companion version in the House.

House Republicans on Friday defended their far-reaching bill, saying that, given the rare opportunity to address health care reform, they were unable to resist the broad approach.

“You don’t have that many chances to get health legislation through,” said one top GOP leadership aide.

Rep. J. Dennis Hastert (R-Ill.), head of the House Republican health care task force, praised Kassebaum’s bill, coauthored by Sen. Edward M. Kennedy (D-Mass.), but said that it “doesn’t go far enough.”

It is the additional provisions in the House bill, such as malpractice reform, Hastert said, that would ensure affordable coverage. “Availability of health insurance isn’t any good if you can’t afford it,” Hastert said.

But House Minority Leader Richard A. Gephardt (D-Mo.) criticized the broad approach. “They plan to load up the bill with controversial, divisive provisions that would doom its chance of becoming law,” he said. Gephardt and 170 other House Democrats are co-sponsoring Roukema’s bill.

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“We need simple, straightforward insurance reform,” Gephardt said. “Let’s pass that legislation right away and then move onto the divisive, and most likely unresolvable, debates about malpractice reform and medical savings accounts.”

But Rep. Bill Thomas (R-Bakersfield), chairman of the Ways and Means health subcommittee, said medical savings accounts are “exactly the right kind of product that will make health insurance affordable” for the young and healthy, who tend to forego buying insurance.