Clinton issues order to insurance groups Companies to be excluded from federal market if sick are denied coverage


WASHINGTON -- President Clinton will punish health insurance companies that, in violation of a 1996 law, deny coverage to sick people by excluding them from the lucrative insurance market for federal employees, administration officials said yesterday.

The law was intended to make insurance more readily available to millions of Americans who change or lose their jobs.

But federal and state officials said they saw worrisome signs that some health insurance companies were circumventing the law. They said some companies discouraged sales to eligible individuals, charged very high premiums or penalized insurance agents selling coverage to customers with pre-existing medical problems.

In a directive to be issued today, Clinton will order the federal Office of Personnel Management, which negotiates health DTC benefits for federal employees and their dependents, to use its purchasing power to ensure that "health plans come into compliance" with the 1996 law.

The main authors of the health insurance measure, the Kassebaum-Kennedy law, were Nancy Kassebaum Baker, a Kansas Republican who retired from the Senate last year, and Sen. Edward M. Kennedy, a Massachusetts Democrat.

First, Clinton's draft order says, health plans that insure federal employees will have to certify that they are complying with the Kassebaum-Kennedy law in their private insurance business.

"Specifically," it continues, "I direct OPM to take all appropriate action, up to and including termination of a participating health plan from the Federal Employees Health Benefits Program," if it finds that any insurer is violating the letter and spirit of the law.

The federal employee program is the nation's largest employer-sponsored health insurance program, covering 9 million people through 350 health plans.

The National Association of Insurance Commissioners has agreed to inform the federal government of violations found by state officials.

Glenn Pomeroy, president of the association, said, "We are pleased to work with the administration in a partnership to make sure that everyone entitled to the protections of the Kassebaum-Kennedy law gets them."

In a separate action, the White House yesterday announced an effort to help more than 3 million people get assistance in paying Medicare premiums. The assistance is available to elderly and disabled people with low incomes (up to $11,108 a year for an individual and $14,888 for a couple).

Medicare premiums total $525.60 a year and are expected to increase over the next decade, to $1,268 a year in 2008.

The administration's effort came in response to a highly critical report by a consumer group, Families USA, which said that the government was overcharging poor elderly people nearly $2 billion a year by deducting Medicare premiums from their Social Security checks.

Ronald Pollack, executive director of Families USA, said that many elderly people did not seek the federal assistance because they were unaware of it or feared they would be stigmatized for going to welfare offices to apply for it.

Pub Date: 7/07/98

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