Insurance That Travels But Price May Be High

HEALTH insurance may soon be more widely available in America - but that doesn't necessarily mean it's going to be more affordable.

Under legislation that passed the Senate 100 to 0 this week, Americans who lose or change their jobs would still be able to buy health insurance coverage, even if they have preexisting health problems. The effect of such a change could be considerable. According to the Congressional General Accounting Office, 4 million US workers are stuck at jobs they wish to leave by fear of insurance loss.

But the health-reform bill now progressing through Congress is silent on the question of policy cost. Some experts fear it could cause premiums to rise across the board, as insurers enroll higher-risk individuals they might have previously excluded.

If nothing else, the United States health insurance industry will be pushed into a brave new world if the legislation becomes law.

"There is no doubt about the fact that the [portability] provision is going to send up health-insurance premiums and health-care costs in America," said Sen. Phil Gramm (R) of Texas, who nevertheless joined in this week's unanimous Senate health-care vote.

The legislative prospects for the health-reform bill - nicknamed "Kennedy-Kassebaum" after its primary sponsors, Sen. Edward Kennedy (D) of Massachusetts and Sen. Nancy Kassebaum (R) of Kansas - remain uncertain.

Similar legislation has already passed in the House, and the Senate's 100 to 0 vote reflects the issue's popularity. But a number of controversial subsidiary issues have been tacked on to the bill's core "portability" concept, and it is unclear whether they can be made palatable to President Clinton - or, indeed, to Senators Kennedy and Kassebaum.

The primary dispute involves something called "medical savings accounts" (MSAs), which would allow individuals who opt for insurance plans with high deductibles to accumulate tax-deductible savings for the purpose of paying some medical costs out of their own pockets.

The House version of health reform would allow medical savings accounts, and the Senate Republican leadership tried - and failed - to include a similar provision in their bill version. But the Clinton administration opposes MSAs, saying they would encourage employers to decrease the value of the health insurance they provide employees, while shifting the burden of more and more health costs directly onto consumers' shoulders.

The GOP congressional leadership, including presumed presidential nominee Sen. Bob Dole (R) of Kansas, intends to try to include MSAs in the version of the health bill that will emerge from the upcoming House-Senate conference. But Mr. Clinton has threatened to veto any legislation that includes MSAs. Even Kassebaum, headed for retirement, has said she will withdraw support from her own legislation if MSAs are included.

"MSAs could be nothing but an empty promise," says Gail Sherer, director of health-policy analysis for Consumers' Union.

A House bill provision that would limit the amount of medical malpractice awards has similarly drawn a veto threat from the White House. And business lobbyists, who have generally supported health-insurance reform, are opposed to the Senate's including a provision that would require insurers to pay for mental health problems commensurate with physical health coverage.

Then there's the question of cost. While almost everyone on Capitol Hill supports the effort to broaden the availability of insurance coverage, some on both the left and right of the political spectrum worry that reform may raise the price of insurance for everyone.

The theory goes like this: Passage of reform legislation might extend private coverage to millions of Americans, many of them with preexisting conditions that are expensive to treat and would have caused insurers to avoid carrying them in the past. Insurers will up rates to cover increased costs. A snowball effect might develop, with young, healthy people dropping off the rolls, causing insurers to raise prices again.

Washington State, which has passed similar though somewhat broader reform legislation, has seen rates skyrocket, point out Kennedy-Kassebaum critics. A total of 10 states have some kind of "guaranteed issue" laws that prevent the denying of coverage based on an individual's health, and some of these have seen insurers pull out of their markets.

Conservatives worry, in fact, that Kennedy-Kassebaum might inevitably lead to some kind of government rate-setting intervention. Liberals are concerned that it will end up as window dressing, promising greater availability but doing nothing to help people pay for it.

The current reform drive "provides political cover for those who want to claim to their constituencies that they met the promise of health reform," says Jane Delgado, head of the National Coalition of Hispanic Health and Human Services Organizations.