Key congressional negotiators resolved a major sticking point Thursday that has blocked passage of a health insurance bill that would allow coverage regardless of pre-existing illnesses.
Sen. Edward Kennedy, D-Mass., and Rep. Bill Archer, R-Texas, chairman of the House Ways and Means Committee, agreed Thursday on a test of tax-exempt medical savings accounts.
"We're going to move with this health reform bill, and there's no reason why it shouldn't pass both houses," Archer said.
The test would involve up to 750,000 policies for people in businesses with 50 or fewer employees and the self-employed. The pilot would last four years. Those who wanted to keep the policies after that could do so, but no one else could get them unless Congress expanded the program.
Under a medical savings account policy, workers and employers would pay monthly premiums to the health insurer. Part of the premium would pay for a high-deductible catastrophic insurance policy to cover major injuries and illness. Part would go into a tax-exempt savings account, which the worker could use to pay routine medical expenses or apply toward the deductible in catastrophic cases.
Thursday's agreement paves the way for House-Senate negotiations on a measure that addresses some of the issues that President Clinton sought to deal with early in his administration. It also clears the way for action on a bill to increase the minimum wage.
The dispute has blocked progress of a health insurance bill sponsored by Kennedy and Sen. Nancy Kassebaum, R-Kan., that would ensure portability of health policies to protect those with pre-existing health problems from losing their coverage if they lose or change jobs.
Critics, including Consumers Union, have complained that medical savings accounts would drain the rich and healthy away from traditional insurance plans and drive up the cost of health insurance for the sick.