Health benefit bill gains in Senate Hill passage is likely for bill to bar loss of insurance coverage; 80 million are affected; Senate rejects plan by Dole to set up health savings accounts

WASHINGTON — WASHINGTON -- Beating back a controversial amendment pushed by Majority Leader Bob Dole, the Senate yesterday boosted the odds that legislation to guarantee health insurance for people who get sick or lose or change jobs will become law this year.

Despite an extended show of public arm-twisting by Mr. Dole, the amendment was defeated, 52-46. Five of his fellow Republicans broke ranks to join a unanimous Democratic minority.


The vote on the amendment -- to create medical savings accounts -- cleared the way for certain Senate approval Tuesday of legislation that would protect an estimated 80 million Americans from losing their health insurance.

The bill's sponsors hope it can be quickly reconciled with a similar measure that already passed the House and was sent to President Clinton for signing.


The measure is viewed as a modest step, far less ambitious than the Clinton health care plan that collapsed two years ago but still more significant than any health care reform Congress has adopted in decades.

"[The amendment vote] was the real test of whether the American people are going to get relief from [eligibility] standards set by insurance companies," said Sen. Edward M. Kennedy, the Massachusetts Democrat who co-sponsored the measure with Republican Sen. Nancy Landon Kassebaum of Kansas. Both senators had been resisting amendments that would trip up the measure.

The proposal for medical savings accounts was intended to encourage broader use of tax-deductible IRA-style accounts for health care costs that would reward workers for limiting medical expenses by allowing them to save what they don't spend.

"This is not a radical concept," argued Mr. Dole, who offered his amendment as part of a larger package, the rest of which was accepted. "It's used in 13 states to allow people to tailor their health insurance to their own health care needs."

But the amendment was opposed by President Clinton and Senate Democrats, who say they fear that the medical savings accounts would lure away the healthiest workers, who would favor such accounts because they would not need to use most of the money in them.

As a result, critics say, sick and working poor would be priced out of the health insurance market.

The Democrats sought to make the issue a political jab at Mr. Dole, who is all but certain to be the Republican presidential nominee.

"If this amendment passes, health insurance reform once again is dead and Bob Dole will have killed it," said Senate Democratic Leader Tom Daschle of South Dakota, who warned that Democrats would filibuster the measure, and if necessary President Clinton would veto it.


In a particularly awkward moment, Vice President Al Gore was boasting to reporters that Mr. Dole could not even hold on to his own troops when he suddenly realized the majority leader was standing behind him with Mr. Kennedy and Mrs. Kassebaum for what was to be a bipartisan victory celebration.

Democrats also charged that medical savings accounts would chiefly benefit the Golden Rule Insurance Co., which leads the market in such accounts and whose owners are major donors to Republican campaigns.

But Republicans countered that the concept of offering a savings account option has been part of the health care reform debate for years and has enjoyed broad bipartisan popularity.

"The accusation is that anyone who supports MSA's wants to kill this bill, that simply is not true," said Sen. Lauch Faircloth, the North Carolina Republican.

He asserted that opponents fear that "once individual Americans have the power to control their own health care dollar, they will never allow the government to take the power back."

Mr. Dole spent nearly a half hour on the Senate floor trying to persuade his dissenting Republican colleagues to change their votes, succeeding only in the case of Sen. William S. Cohen of Maine. The Republicans who remained opposed were Mrs. Kassebaum, Sen. Christopher S. Bond of Missouri, Sen. John H. Chafee of Rhode Island, Sen. Slade Gorton of Washington and Sen. Mark O. Hatfield of Oregon.


But the majority leader seemed less than committed himself to the proposal so staunchly opposed by his Kansas colleague, Mrs. Kassebaum.

Although a medical savings accounts provision is included in the House bill, Mr. Dole appeared ready to jettison it if necessary to get the health insurance legislation into law.

Mr. Dole believes he would benefit from helping to enact some major health care bill this year.

When the companion bill was approved by his colleagues last month, House Speaker Newt Gingrich said he was willing to give up the medical savings accounts and other provisions if necessary to enact the broader legislation.

Among the features added yesterday were:

Tax breaks for the purchase of long-term care insurance;


Penalty-free withdrawals from IRAs for long-term health insurance or other medical expenses;

Tax breaks for terminally or chronically ill people who cash out their life insurance contracts two years or less before death.

Similar elements are included in the House version of the bill.

One of the few remaining items in dispute between the two measures now is the House provision that would limit damage awards in malpractice cases, which will likely die because it could not pass the Senate.

Pub Date: 4/19/96