Dole, leaving Senate, gets GOP to agree on health insurance But Senate Democrats balk at provision for medical savings accounts

WASHINGTON — WASHINGTON -- In his final hours as Senate majority leader, Bob Dole won agreement last night from House and Senate Republicans on a bill to guarantee health insurance for people who get sick or lose or change jobs.

But Senate Democrats rejected the compromise because it includes a proposal to begin phasing in tax breaks for medical savings accounts as an alternative to traditional insurance. If 41 of the 47 Senate Democrats stand together, they can prevent the majority Republicans from even bringing their plan up for a vote.


The chief White House lobbyist, John Hilley, took a more guarded stance last night, calling the GOP deal "a good-faith proposal, but we're not there yet." Hilley outlined the same concerns about medical savings accounts as Democratic senators, however.

Supporters of such accounts say they would provide greater choice for patients and would save money; critics say they would benefit the healthy at the expense of the sick.


Dole conceded that the deal among Republicans came too late for him to preside over enactment of the health care measure, which he had labeled a top priority, before he ends his 35-year career in Congress today to campaign full-time for the White House.

"But the fact is that we have agreement on our side and, in my view, that's very significant," Dole said after a negotiating session in the office of House Speaker Newt Gingrich.

Perhaps most significant to Dole, last night's agreement among Republicans will allow him to blame the Democrats more easily if the popular health insurance bill is not enacted. Until last night, his own party had been bitterly divided on the measure, which would make health insurance more available to up to 25 million Americans.

The greatest concession seems to have been made by Dole's fellow Kansas Republican, Sen. Nancy Landon Kassebaum, who swallowed her own resistance to medical savings accounts and effectively abandoned Sen. Edward M. Kennedy, the Massachusetts Democrat who had been her chief partner in shaping and fighting for the legislation.

"Somebody had to take a step forward," Kassebaum said. "We kept the core principles intact. We still have a bill that provides for portability and access."

But Kennedy, who just hours before had taken the Senate floor to denounce medical savings accounts as the equivalent of "quack medicine," was not persuaded.

"I strongly oppose the latest Republican plan, and I regret very much that Senator Kassebaum has bowed to the pressure of Speaker Gingrich and the House Republican leadership," Kennedy said in a statement last night.

At stake is a measure that would be the most important health insurance reform in three decades, as well as one of the top accomplishments of the Republican-led Congress.


Insurance companies could no longer drop or turn away applicants because of ailments or injuries. And continued coverage would be assured for workers who lost or changed jobs.

All sides are in agreement on those basic elements, but the House Republicans added to their version of the bill several features that were opposed in the Senate. The most troublesome of those was the provision for medical savings accounts, the provision to which the House negotiators clung most fiercely.

With a medical savings account, someone could buy a relatively cheap policy that covered only expenses for catastrophic illnesses and injuries. Fees for office visits, laboratory work and other smaller items would be paid from the tax-deductible account. Money left over could be saved or put to other purposes.

"It's the ultimate in portability," said Rep. Bill Archer, a Texas Republican who is chairman of the Ways and Means Committee and is among the fiercest defenders of medical savings accounts as an efficient and cheaper alternative to government-run health care.

But Senator Kennedy and other Democrats said they feared that the medical accounts would appeal to the wealthy and healthy, and that those low-risk people would leave traditional insurance to the poor and sick.

The plan agreed to last night would phase in the accounts over three years, beginning with small businesses of 50 employees or fewer and self-employed people. After two years, a study of that experiment would be conducted. After three years, Congress would vote on whether to extend the medical savings accounts to large businesses and individuals.


Pub Date: 6/11/96