PORTABILITY: Clinton Vows To Beef Up Kassebaum-Kennedy Law
At a Capitol Hill news conference yesterday, President Clinton "blasted health insurance companies for charging too much and blocking access to coverage for people who switch or lose jobs," USA Today reports (Findlay, 3/18). Clinton was specifically addressing studies showing that insurance company practices may be undermining the intent of the 1996 Health Insurance Portability Act (Kassebaum-Kennedy). Last week, the General Accounting Office released a report stating that "insurance companies have been charging 140% to 600% of the standard premiums for people who try to use Kassebaum-Kennedy to convert their group policies to individual coverage." Further, the report said some companies have set their commission rates so low that their agents are discouraged "from selling policies to people with medical problems" (CongressDaily/A.M., 3/18). The GAO findings were bolstered by a Kaiser Family Foundation study released yesterday. The study revealed that individual health insurance premiums vary significantly based on the age of the applicant or pre-existing health problems, and coverage is often systematically denied to people with health problems (Kaiser release, 3/17).
"The plan designed to secure people's insurance has not worked as intended," CBS' John Roberts reported. Health Insurance Association of America's Marianne Miller explained why insurers charged significantly more for individual policies: "These individuals represent much higher costs, they cost a lot more to cover. And the money has to come from somewhere." CBS' Wyatt Andrews reported, "There's concern that without caps on insurance premiums, or state laws to subsidize high-cost patients ... Kennedy-Kassebaum will have failed the very Americans it was supposed to protect" ("Evening News," 3/17).
Immediate White House Action
President Clinton said the administration plans to take immediate steps to bolster the Kassebaum-Kennedy law's implementation. "[S]ome insurers are finding ways around that law, giving insurance agents incentives to delay or deny coverage to vulnerable Americans," Clinton said. "It's not just wrong, it's illegal." The president said starting today the Department of Health and Human Services "will send a notice to every insurer in every state in our country affirming" the illegality of such practices. "I am directing Secretary Shalala ... to conduct a thorough review of the options for strengthening the protections of the Kennedy-Kassebaum law," he said, adding, "The law is vital to the health and stability of America's workers and their families. We intend to enforce it vigorously" (transcript, 3/17).
According to USA Today, Sen. Edward Kennedy (D-MA) "may introduce legislation this week to put a limit on how much people can be charged for individual health insurance under the law" (Findlay, 3/18). However, Kennedy is likely to face Republican opposition on grounds of price-fixing (3/18). CongressDaily/A.M. reports that Senate Labor and Human Resources Chairman Jim Jeffords (R-VT) "stopped short of endorsing any specific changes," but he said "we might seriously have to consider legislation this year" (3/18).
The Kaiser Report
The Kaiser Family Foundation found that six states -- California, Florida, Louisiana, Montana, North Dakota and Pennsylvania -- allow insurers to deny coverage to applicants with a history of pre-existing health problems. In addition, the study found that insurers often increase premiums or add riders for people in the individual market with pre-existing health conditions or risk factors. These riders can range from 20% to 80% above the base rate depending on an applicant's medical history. The study assessed policies sold in the individual market in ten states (Kaiser release, 3/17). Health Insurance Association of America COO Chip Kahn "said the results weren't surprising. 'The individual market is very fragile,' he said, "adding that subsidies from such sources as the state or federal governments are needed to offset high-cost enrollees" (McGinley/Cummings, Wall Street Journal, 3/18).
Private Market's Failure?
An editorial in today's Boston Globe laments the GAO study as a symptom of the "declining health" in America. "The fact that the uninsured population of 40 million continues to grow is beyond embarrassing; it is a national disgrace." The editorial concludes, "Proposals such as price controls, employer mandates, and single-payer plans are rejected as antithetical to market forces, but the market has failed too many millions. American cannot rely on health insurers who spurn the sick" (3/18).