Clinton Signs Major Package of Health Insurance Reforms

President Clinton signed a major health care reform measure Wednesday that will ensure that millions of Americans with conditions ranging from pregnancy to heart disease and cancer can change jobs without fear of losing health insurance coverage.

The legislation “seals the cracks that swallow as many as 25 million Americans who can’t get insurance or fear they will lose it,” the president said during an elaborate signing ceremony on the White House South Lawn.

The legislation, which had been approved virtually without dissent by the Republican-controlled Congress, guarantees that small companies and self-employed individuals cannot be rejected for coverage by insurers.

It was the biggest health care measure passed in a decade. But it was modest by comparison to Clinton’s original plan, which would have required all businesses to provide health insurance for their workers and would have established a new system of federal control and oversight.

The biggest beneficiaries of the new law will be insured families in which one or more members have health problems. Currently, a worker or family members can be required to wait six months or a year before insurance on a new job will cover bills associated with a health condition that existed before the employee joined the company, including pregnancy.

This “preexisting exclusion” can now be imposed whenever someone switches jobs. But the new law says that a worker now will be entitled to immediate coverage in a new job.

The guarantee of continuous coverage will not apply if a worker is without health insurance for more than 63 days between jobs.

The new law takes effect July 1, 1997, but because most corporate health plans operate on calendar years, most Americans will not feel the impact until Jan. 1, 1998.

The government estimates that 21 million to 25 million people potentially could be helped in some way by the legislation each year. Those figures include workers and their families moving between jobs and those who will not consider leaving their current jobs for fear of losing insurance. Of that total, it is not known how many have preexisting health conditions.

Before signing the legislation, Clinton was introduced by Merit Kimball, a 41-year-old woman from Silver Spring, Md., who is fighting breast cancer and has lost a kidney to cancer.

Her job at a nonprofit organization “isn’t guaranteed to be here next year or the year after that, and I do intend to be here next year and the year after that,” she said. Without the legislation, “I could easily become a woman with a preexisting condition looking for a job and knowing that it won’t offer me insurance,” she told the crowd, which applauded enthusiastically.

The Health Insurance Portability and Accountability Act was steered through the shoals of partisan politics in Congress under the leadership of Republican Sen. Nancy Landon Kassebaum of Kansas and Democratic Sen. Edward M. Kennedy of Massachusetts, both of whom joined Clinton for the signing.

In addition to the protections for workers with preexisting health conditions, the legislation forbids insurers from refusing coverage for small companies--those with two to 50 workers--because an employee has a serious health problem. The law says nothing about the price of such coverage, however. The states are left to determine how to make coverage affordable in their jurisdictions.

The legislation does not address the problem of the growing number of Americans who lack any sort of health insurance. About 17% of the U.S. population younger than 65 is uninsured. The figure is 23% in California, 32% in Los Angeles County and 22% in Orange County, according to the UCLA Center for Health Policy Research.

California has a fast-growing business sector of medium and small firms that are less likely to supply insurance coverage for their workers. Other parts of the country have larger manufacturing firms whose workers are union members and where health insurance is more common.

The bill offers new benefits for the self-employed, raising the federal tax deduction for their health insurance premiums from 30% of costs now to 80% by 2002.

And it authorizes medical savings accounts for the self-employed and companies with fewer than 50 workers. These accounts allow participants to set aside money tax free to pay for current or future medical expenses. But the insurance policies also come with a high deductible, which is expected to restrain health care spending by discouraging marginal visits to doctors.

Advocates argue that people with the new medical accounts will exercise restraint because they will decide each time they fall ill whether to dip into their tax-free accounts to pay to see their doctors or let their accounts build up.

The government will limit the number of people participating in such accounts to 750,000, awarded on a first-come basis, as part of a four-year experiment to determine whether the accounts help hold down costs.

The law also creates a new program to combat fraud and abuse in health care, with particular attention given to the massive Medicare system that provides health care for those older than 65 and the disabled. Medicare spends about $180 billion a year, and experts estimate that 10% of that sum is consumed by fraud and waste.

Each political party hopes to use the new law to its advantage.

Republican presidential candidate Bob Dole said the legislation “includes many of the important health insurance reforms I’ve promoted for years and should end once and for all the Clinton prescription of big-government health care.” Republican National Committee Chairman Haley Barbour said the measure represents “common-sense reforms passed by the common-sense Republican Congress.”

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Consumer’s Guide

Key provisions of the health care legislation, which takes effect July 1, 1997 (some company plans based on calendar year, so provisions may be delayed until January 1998).

WAITING PERIODS BETWEEN JOBS

Before: An individual changing jobs could be denied coverage for an existing health problem for up to a one-year waiting period.

Under New Law: Once the individual satisfies a waiting period at one employer, the individual is immediately covered at a new employer. No waiting period.*

COVERAGE FOR SMALL COMPANIES

Before: Insurers for companies with up to 50 employees could refuse to cover a worker because of an existing ailment, or charge extra.

Under New Law: Insurers cannot deny coverage or charge extra for such an ailment.

COVERAGE FOR THE NEWLY SELF-EMPLOYED

Before: An individual leaving a company and attempting to buy insurance as self-emploped could be denied coverage or charged extra.

Under new law: An insurer must agree to cover someone seeking insurance in such a way. Bill sets no rate limits, but states are encouraged to see that coverage is affordable.

* You cannot have a break in insurance coverage of more than 63 days. Otherwise waiting period can start again.

Researched by ROBERT ROSENBLATT / Los Angeles Times

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Medical Accounts

The health care plan signed Wednesday allows for medical savings accounts. Here’s how it works:

* 775,000 accounts would be sold to individuals or companies with fewer than 50 workers.

* The accounts combine high-deductible insurance with a tax-free account that can be used to pay medical costs.

* Savings build-up tax free, and the money can be withdrawn only for medical bills.