Deal in Congress lifts health insurance bill Kennedy, Archer agree on test plan for guaranteed coverage

WASHINGTON — WASHINGTON -- Two of the most powerful members of Congress announced last night that they had solved the major problem blocking passage of legislation to make health insurance more readily available to millions of Americans.

The agreement was announced by Democratic Sen. Edward M. Kennedy, a co-sponsor of the legislation, and by Republican Rep. Bill Archer, the chairman of the Ways and Means Committee, which wrote much of the bill.


The legislation would guarantee that most people in employer-sponsored health plans would be able to obtain health insurance after changing or losing their jobs without being denied coverage because of existing medical problems.

The agreement does not guarantee enactment of the insurance legislation, which has been passed in different forms by the House and the Senate.


But negotiators from the two chambers can now meet in a conference committee to resolve their differences and finish work on the bill, which has been endorsed by President Clinton as a modest first step toward guaranteeing health insurance for all Americans. And leaders of both parties said last night that they expected those other differences to be resolved relatively quickly.

The bill has been held up for three months by Democratic opposition to Republican provisions in the House version of the bill to create tax incentives for a novel form of health insurance coverage known as medical savings accounts.

The fight over the health insurance bill, one of the most significant pieces of legislation considered by the current Congress, had spilled over into other areas, stalling legislation to raise the minimum wage to $5.15 an hour, from the current $4.25.

The Senate Democratic leader, Tom Daschle of South Dakota, said last night that the agreement on health insurance meant that the House and the Senate could break that logjam.

Kennedy of Massachusetts and Archer of Texas said they had agreed to allow a national but carefully limited test of medical savings accounts. Under the agreement, they said, the government would create tax incentives for people to put money into such accounts. The money would be used for routine medical expenses. People establishing these accounts would have to buy insurance with low premiums and high deductibles to pay extraordinary medical expenses.

Republicans have championed such accounts as a way to maximize consumer choice and establish a bulwark against government regulation of the health care market. But Democrats oppose them, saying the accounts will appeal mainly to people who are healthy and wealthy and will force others to pay higher insurance premiums.

Under the demonstration project, 750,000 medical savings accounts could be established by people who are self-employed or work for businesses with fewer than 50 employees. The test would last four years, and congressional action would be needed to expand it.

Archer said: "I am pleased to announce that Senator Kennedy and I have reached agreement on medical savings accounts. As a result, millions of Americans will soon benefit from legislation making health care more available and affordable. Working Americans will soon be able to switch jobs without losing their health insurance even if they have a pre-existing medical condition."


He added: "Medical savings accounts represent a new and exciting innovation in the health care market that I believe will become highly popular. All Americans have won to tonight."

Commenting on the agreement, George Stephanopoulos, a senior adviser to the president, said: "It sounds like tremendous progress. We hope we can get the full legislation, and an increase in the minimum wage approved soon."

A major outstanding question for the House-Senate conference is whether to require insurers to provide coverage for mental illnesses in a way that is equivalent to the coverage provided for other conditions such as heart disease, diabetes and cancer.

Kennedy emphasized that "we have agreed to a test and not a movement toward a whole medical savings account insurance program." But he said that the agreement "clears away the largest single obstacle to enactment of the bipartisan health reform bill."

Kennedy said that by setting a limit of 750,000 accounts, Congress would guarantee that "it's a true test, not a full-blown program" of the type favored by many Republicans.

In addition, he said, "there will be significant consumer protections in the medical savings account policies, to prevent gouging of purchasers by the insurance industry."


The Senate version of the bill is sponsored by Kennedy and Sen. Nancy Kassebaum, a Kansas Republican and the chairwoman of the Committee on Labor and Human Resources. The Senate approved its version of the legislation April 23 by a vote of 100-0, after rejecting an amendment on medical savings accounts offered by Bob Dole. The House passed its version March 28 by a vote of 267-151.

"With today's agreement on medical savings accounts," Kassebaum said, "we have cleared the major hurdle that has blocked our efforts to make progress on the health insurance reform bill. I am confident that resolution of this key issue puts us well on our way to finally enacting meaningful health care reform for millions of working Americans."

She added that agreement on the other issues is "within reach."

The Kassebaum-Kennedy bill is the first major effort by Congress to expand health insurance coverage since the demise of Clinton's ambitious plan in September 1994. Politics evidently led the way for yesterday's agreement. Congress intends to begin its August recess next week, many members are campaigning for re-election and they want tangible accomplishments to show voters.

Pub Date: 7/26/96