House and Senate Republicans reached agreement last week on a compromise health insurance reform plan that drew immediate opposition by Democratic leaders.
However, the pact received lukewarm support from some rank-and-file Democrats.
Response to the plan by the White House also was restrained, raising prospects that a compromise could be reached this year on the legislation, which would curb the ability of health insurers and employers to deny coverage to employees who change jobs or have pre-existing medical conditions. It also would allow small firms to join in purchasing cooperatives and guarantee that companies can renew their insurance regardless of the health of their employees.
On the day before his departure from the Senate, Majority Leader Bob Dole (R-Kan.) (See related story, this page) announced that House and Senate Republicans had finally reached a compromise on tax incentives to encourage the use of medical savings accounts.
Under the GOP agreement, MSAs would be available to people working for employers with 50 or fewer employees and the self-employed as of January 1997.
In 2000, the program would be expanded to cover workers in large firms, unless Congress acts to limit the program. According to federal estimates, as many as 40 million people could be eligible for the MSA program under the GOP proposal.
MSAs are private accounts that could be used to pay for routine medical expenses. People could combine them with high-deductible insurance policies for complete health coverage.
Republican MSA advocates say the expanded use of such plans would increase consumer choices and hold down medical costs. Democratic opponents contend they would drain healthier people from the public insurance pool, leaving the government to ensure the sicker patients (See related story, p. 8).
Senate Minority Leader Thomas Daschle (D-S.D.) and House Minority Leader Richard Gephardt (D-Mo.) both criticized the MSA plan as too broad and said that if the bill reached President Clinton's desk they would recommend it be vetoed.
However, White House officials were less strident, calling the bill an improvement over past versions and stopping short of a veto threat.
A number of Senate Democrats also gave the compromise muted praise. Sen. Paul Simon (D-Ill.) said he would not vote against the health insurance reform plan because of the MSA provisions alone. Other Democrats said the bill would be more palatable if the provision requiring that Congress vote to limit the plan were turned around to require that Congress vote to expand the plan.
Provider groups said they were generally happy with the provisions in the bill relating to fraud and abuse. The legislation would create new criminal and civil penalties for healthcare fraud. To prosecute providers under the new statute, federal officials would be required to prove the providers acted "willfully and knowingly" in violating the law. Provider groups sought the more stringent statute, which they said is necessary to ensure that honest mistakes are not subject to prosecution.
Managed-care groups also were successful in retaining a provision that exempted many managed-care arrangements from anti-kickback legislation.
Congressional leaders have yet to name official negotitors to resolve differences in the House and Senate versions of the bill.