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Consensus Bill Would Scrap Mandates, Cost Controls

By Spencer Rich
The Washington Post

Following the apparent collapse of efforts to pass a comprehensive health reform bill, lawmakers may seek to enact a modest "consensus" bill in the remaining weeks of Congress, based on proposals with broad support in both parties.

A bill of that type, many observers said, would scrap the controversial provisions - including employer "mandates" requiring firms to pay part of the cost of employee coverage, federal cost control measures and expansion of Medicare - that have made it all but impossible to pass President Clinton's plan or bills sponsored by Senate Majority Leader George J. Mitchell, D-Maine, and House Majority Leader Richard A. Gephardt, D-Mo.

Many observers feel that a "consensus" bill with the best chance of passage in the current Congress would focus on health insurance regulation and federal subsidies for low-income Americans. Thus it would seek incremental changes in the health system, not a broad restructuring.

It conceivably could extend insurance coverage to between 15 million and 20 million of the 39 million people who now lack it, experts said, though the number might be smaller if Congress proved unwilling to provide substantial amounts of money for federal subsidies to help pay premiums for the poor and near-poor.

First and foremost, a bipartisan consensus bill would reform the rules that govern health insurance, making it easier for people to buy and retain insurance without being denied access because of the state of their health. Insurers would be required to sell insurance to all individuals and small businesses seeking it.

Price variations based on criteria such as age would be reduced, though probably not eliminated. Refusal by an insurer to pay for care of a "pre-existing" health condition would be limited to six months, and would be allowed only the first time a person obtained insurance or after a long period without coverage.

All the major Democratic bills, as well as those introduced by Republican Sens. Dole and John H. Chafee (R.I.) and GOP Reps. Michael Bilirakis (Fla.) and Robert H. Michel (Ill.) include insurance reform provisions.

Second, consensus legislation would authorize billions of dollars annually (and perhaps hundreds of billions over the next decade) for federal subsidies to help the poor and near-poor buy insurance. Most bills already on the table would subsidize the entire premium for people with incomes below the poverty line ($12,320 this year for a family of three), with partial subsidies up to 240 percent of the poverty line.

The money would be obtained in part from some new taxes such as the 45-cent-a-pack cigarette tax increase initially proposed by Mitchell and Gephardt (one of the few identical provisions in both bills), but mainly from cuts in Medicare and Medicaid.

In the consensus scenario, the most controversial provisions that have blocked the Clinton bill and the Democratic leadership bills - and that were opposed by some businesses or the public as imposing excessive bureaucratic control or economic hardship - would be dropped.

One controversial provision is the "mandate" on all employers to help pay for insurance premiums for their employees. That requirement would have gone into effect either within the next few years (Gephardt) or in the long run only if a large number of people still remained without health insurance despite reform (Mitchell).

Small businesses, among which employer-paid coverage is far less prevalent than among large businesses, fiercely opposed this proposed requirement, claiming they could not afford it and would go out of business or have to fire people if it were enacted. Many large businesses saw it as an unwanted extension of government control.