Not long ago, health-care reform was almost fatally wounded by association with one of the greatest domestic-policy bellyflops in American political history: the Clinton “Health Security Act” of 1994.
For most of that year, incremental health-care reform was a Republican standard. Virtually every congressional Republican supported changes designed to ease the concerns millions of Americans have about continued access to medical coverage when they switch or lose their jobs. But Democrats rejected and mocked such incremental reform as inadequate to the “crisis” — and even counterproductive in the absence of a system-wide federal makeover. And President Clinton famously threatened to veto such reform in his 1994 State of the Union address. It wasn’t enough, he said. He wanted the whole, terrifying ball of “universal coverage” wax.
What now, barely a year after that particular question was resol ved to the president’s indelible partisan disadvantage? Surprise. In his recent speeches and campaign appearances, Clinton promises to sign bipartisan insurance-market reforms in free-standing form — reforms significantly less ambitious than even the most conservative GOP proposals of two years ago. And he complains that Republicans won’t let him have those reforms.
Can this be true? Can any health-care bill esteemed by William Jefferson Clinton really be worthwhile?
Amazingly enough, the answer, for the most part, is yes.
The bill in question is the Health Insurance Reform Act of 1995. This legislation, also known as Kassebaum-Kennedy, was approved by a key Senate committee in a unanimous vote last August. It is endorsed by the National Governors Association, the state insurance commissioners, and the American Medical Association. Insurance companies in the “group policy” market are mostly okay with it. And a variety of important business organizations — the National Association of Manufacturers and the Chamber of Commerce, for example — have offered conditional support. Kassebaum-Kennedy is almost, almost, entirely uncontroversial.
Most significantly, the bill limits the ability of insurance companies to restrict coverage for recently diagnosed or treated “pre-existing conditions” to 12 months, after which those conditions must be covered, even if a patient changes jobs or health plans. The legislation also guarantees access to group- plan insurance for most employers, bans the exclusion from such plans of any employee on the basis of health status alone, and requires that paid-up insurance policies be offered for renewal except in cases of policyholder fraud or misrepresentation. No one much objects to any of these provisions.
The Health Insurance Association of America (HIAA) does strenuously object to one further part of the Kassebaum-Kennedy proposal. In order to secure insurance coverage for people who lose their jobs, join businesses without group plans, or enter self-employment, the act guarantees their access to an individual policy if they choose to buy one. HIAA worries that this “no refusal” requirement will force rate increases that render individual coverage unaffordable and prompt some current policyholders to drop coverage.
It’s not a preposterous complaint. Individual insurance is an unusually rate- sensitive market niche. Policyholders pay premium costs entirely out of their own pockets. So the decision to take such relatively expensive insurance tends to make marginally more sense if you’re sicker, not healthier. And the addition to the individual insurance market of a new group of such higher-risk policyholders will probably produce rate increases of some degree.
But even here, the options extended by Kassebaum-Kennedy are markedly narrower than those contained in legislation every Republican senator endorsed in 1994. And their application will be much more limited. In order to take advantage of this “group-to-individual portability” provision, you must (in most cases) have maintained uninterrupted, paidup coverage in an employer- based insurance plan for three full years. You must also be ineligible for group coverage under an employer’s plan — your own or your spouse’s. And you must be able to afford individual coverage; the bill allows insurance companies to charge anything they want.
In any case, insurance companies in states that adopt other means to expand coverage opportunities to newly uninsured individuals — and many states already have — are exempted from the bill’s relevant requirements.
However the specialized dispute over individual insurance coverage is ultimately settled, the bottom line on Kassebaum-Kennedy will remain essentially the same: no new taxes, no new spending, no new federal bureaucracy, no state mandates, no rate restrictions, and no Hillary-style mandatory purchasing alliances and national expenditure caps. Nothing that should frighten the vast majority of Americans, in other words, and much that should satisfy them. And nothing, on balance, that violates conservative principle.
Kassebaum-Kennedy will be debated by the full Senate sometime between mid- April and early May. It is a delicate animal, and its political fortunes are impossible to predict this far in advance. If the bill gets larded up with the pet health-care amendments of various individual senators, business groups have sworn they will (justifiably) revolt — and probably kill the measure. Can Senators Kassebaum and Kennedy hold the line on such amendments from their respective party caucuses, and thus keep the bill clean and passable? And will the House, which has a large freshman class with no experience of 1994’s health-care debate, be willing to move on comparable legislation, now still in its infancy? It’s anyone’s bet.
Republicans may be forgiven any instinctive resistance they might have to a C linton call for increment al health-care reform. Some probably fear that Democrats will attempt to leverage Kassebaum-Kennedy into something genuinely terrible in future sessions of Congress. Maybe so. But that risk can only be avoided by doing nothing. And it would be nice if this Republican Congress could enter the fall campaign having done a little bit more than it already has for average American voters. States can’t enact all these insurance reforms, after all; federal law prevents state regulation of certain insurance plans that now cover a huge number of Americans. In 1994, remember, most congressional Republicans promised to fill that gap.
Not to worry: Clinton won’t get the bulk of credit, no matter what. The experience of 1994 cannot be expunged from popular memory; health care, for the president, will always be an embarrassing issue. Republicans should get the credit they deserve for incremental insurance-market reform. It was $ Itheir idea. And it’s still an idea worth pursuing with the Kassebaum- Kennedy bill.
David Tell, for the Editors
