A real problem for patients with inflammatory bowel disease is the loss of the ability to get health insurance when changing jobs. This results in job lock for many. It also can be a disaster for children with IBD who cannot get health insuarnce at any new job. Recently a law was passed that would require insurance companies to provide insurance if a person was previously insured. I get a newsletter about health issues, and am reprinting here an article I have recently received. It is an interview with senators Kassebaum and Kennedy.

Insurance companies are really not mean. They are simply responding to the competitive pressures that our laws have created. Suppose an insurance company wanted to be nice and just decided to insure people with chronic disease. Everyone with chronic disease would insure themselves with that company. Their rates would go up, the subscribers would leave, and the insurance company would be out of business. Thus, by being nice, they end up out of business, doing no one any good. This is an example where regulation works well. By preventing all insurance companies from excluding people with previous health problems the competitive playing field is levelled, and no company can gain a competitive advantage by excluding people with preexisting illness who have previously been insured. Rates stay low, people stay insured.

There is also a long term benefit. The existance of this law makes it very desireable to stay insured. If you stay insured, chronic illness will not cause job lock or uninsurability. Under the current system, if you do not get insurance and get a chronic illness you are not much worse off than if you are not insured at all. Insurance rates are awfully high, and many do not have insurance because of the cost. With the binefit of guaranteed future insurability the equation changes slightly, and more healthy people will want to be isnured to have the benefit of the law. With more healthy people participating, the premiums costs will be pressured downward, and premiums can go further down as more participate. Where this settles will depend on the future premium rates and disposable income, but it will push more people to be insured. I think this effect is not fully appreciated.

On the down side, the new law will not take effect for one year.

Thanks to Steve Freedkin for keeping the List.Healthplan active. See the boxed text below for subscribing information.

Stephen Holland, M.D.

Here is the article:

------------------------- original text ----------------------------------
EXTRA: SENATORS KASSEBAUM & KENNEDY AS INTERVIEWED ON PBS TELEVISION AFTER PASSAGE OF THEIR HEALTH REFORM BILL 96+08+02

NOTES FROM LIST.HEALTHPLAN MODERATOR:

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| THE FOLLOWING IS A SPECIAL REPORT FROM LIST.HEALTHPLAN. THIS IS THE |
| TRANSCRIPT OF PBS TELEVISION'S NEWSHOUR PROGRAM SEGMENT ON THE HEALTH |
| REFORM BILL (THE "KASSEBAUM-KENNEDY BILL" THAT HAS JUST PASSED CON- |
| GRESS. BILL CO-SPONSORS NANCY KASSEBAUM (R-KS) AND EDWARD KENNEDY (D- |
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| -- STEVE FREEDKIN, LIST.HEALTHPLAN |

(c) Copyright 1996 MacNeil/Lehrer Productions and PBS

Both Houses of Congress have approved new legislation that calls for "portable" health insurance, and guarantees that a "pre-existing" condition will be paid for, even if a worker changes jobs. Tax deductions for nursing home payments also made it into the legislation, but mental health benefits did not.

CHARLAYNE HUNTER-GAULT: The new health legislation is first of its kind in a decade and will affect millions of Americans. Known as the Health Insurance Portability and Accountability Act, the bill requires insurers to offer policies to workers who changed jobs, insures that workers who lose their jobs cannot be denied individual coverage, guarantees that workers with pre-existing conditions cannot be denied coverage for more than 12 months, gradually increases the tax deduction from 30 to 80 percent for the self-employed who buy insurance, and allows individuals to deduct costs of nursing home and other long-term care.

For more on the legislation and its impact, we're joined by the bill's authors. Sen. Nancy Kassebaum, Republican of Kansas, is the chair of the Labor & Human Resources Committee, and Sen. Edward Kennedy, Democrat of Massachusetts, is the ranking member of the Committee. Thank you both for joining us. Sen. Kassebaum, just what is the significance of this bill?

SEN. NANCY KASSEBAUM, Chair, Labor & Human Resources Committee: It will enable, it's estimated 25 million Americans, to feel more secure regarding their health insurance. If you lose -- if you're losing a job or changing a job, you worry about whether you'll be able to maintain health insurance. This guarantees that if you've been part of a health plan, you cannot then be terminated, and particularly due to any preexisting health condition.

CHARLAYNE HUNTER-GAULT: All right. I want to get into some of the specif- ics in a minute, but Sen. Kennedy, let me -- do you have anything to add to what Sen. Kassebaum has said in terms of the significance?

SEN. EDWARD KENNEDY, (D) Massachusetts: Just really one point, and I think she has said it well with regards to portability and preexisting condition, but I think the power of this legislation is relieving families of a lot of anxiety. A lot of parents have a child that has some difficulty, some disability, and the family worries what is going to happen to that child when he or she grows up, or that worker that might be laid off and is not as well or healthy, as robust as they might have been and is going to be out there and unemployed and really wondering whether they're in their senior years are going to be able to get any kind of health insurance, or someone that would like to move to a job and have a much greater opportunity for themselves and their family, and that says, no, I can't do it, because I just don't know about that health insurance because I have my wife is sick or my husband is sick. That kind of anxiety is an enormous burden on so many millions of American families, it's a real one. You might not be able to put it into dollar and cents, but it's a real one. This bill addresses that degree of preexisting condition, and it gives assurance that people will be able to continue their health insurance, and it means that they'll be able to move from job to job and still carry the health insurance. That's important.

CHARLAYNE HUNTER-GAULT: All right. Let's go through some of the specifics on it then. That is the first major thing about it, that it requires insur- ers to offer policies to workers who change jobs. Explain how that will work, Sen. Kassebaum.

SEN. NANCY KASSEBAUM: Well, it's just that if you've lost a job or changed a job and you have had health insurance, you can't just walk off the street and say, I want this job and I want health insurance. You have had to have been on a health care plan. But if you moved and changed jobs and your COBRA benefits have run out as well, then an employer must offer a health insur- ance plan. And you cannot be excluded because of a prior health condition.

CHARLAYNE HUNTER-GAULT: Mm-hmm.

SEN. NANCY KASSEBAUM: Also, someone can start to work and if they have, umm, a heart -- a health condition, ulcers, heart condition, whatever is determined as a preexisting condition, after a year's time, then they have to not be excluded again from an employers health plan that he would be offering employees, she would be offering employees.

CHARLAYNE HUNTER-GAULT: Now, on the first one, Sen. Kennedy, one that requires insurers to offer policies to workers who change jobs, who bears the cost of that? How does that work? SEN. EDWARD KENNEDY: The employee and, therefore, this is -- we have to see within the states, as the states are going to have important responsibilities, that some of it's shared with the federal government to make sure that the premiums are not going to go up out of sight, and one of -- that was one of the real differences between the House and Senate bill under Sen. Kassebaum, our bill.

It meant that all insurance policies were going to be available to people that were going to be moving out or have some preexisting condition, and the House would have tried to put them all in one policy, which would have meant that the premiums were absolutely up through the roof, and it made it inaccessible for people, but I -- if I could just get back to one point, you know, what happens so often in, in Main Street America, as these families have paid into insurance companies for a long period of time, for ten, for fifteen, or for eighteen years, and suddenly they find a husband or a wife, a preexisting condition.

They may develop cancer. You know, what happens in so many instances, they are cut off, they are terminated. That policy is ended, or if a child is very, very sick, that policy is ended. That happens, every community in America, and this addresses that issue.

C HARLAYNE HUNTER-GAULT: But explain to me this part, where it says it guarantees that workers with preexisting conditions cannot be denied coverage for more than 12 months, why is that there, for more than 12 months? What exactly does that mean?

SEN. NANCY KASSEBAUM: That's because, as I said earlier, if you have moved to a job that is offering health coverage but you have a preexisting condition, and you have not been covered before, that you cannot be -- you cannot be denied for more than 12 months. During that time, you would be urged to be a participant in the plan, but you may not have a preexisting condition covered until the end of 12 months time. But that's for someone who has never been part of a health plan.

CHARLAYNE HUNTER-GAULT: Oh, I see.

SEN. NANCY KASSEBAUM: Let me just say too, umm, it's like any other health plan. I mean, this isn't something new. We're not dictating the terms of new health plan. It could be Blue Cross-Blue Shield, or whatever an employer is offering, so an employer may pay part of the benefits as they do in, in many plans, or it would be employee contribution. That is to be determined. It's just that they cannot be denied.

CHARLAYNE HUNTER-GAULT: Mm-hmm. Now what about -- there's also individ- uals can deduct costs of nursing home and long-term care. Now tell me about the importance of that.

SEN. EDWARD KENNEDY: Well, I think as all of us know the growing numbers of elderly in our communities, in our homes, we're blessed with the fact that our parents are living longer, and I think in an ideal world, we would like to have them have the option of either remaining at home or in a community setting so that they can remain at home in a community setting, or in terms of having nursing home help and assistance.

The amount of resources in a family that's extended in the final several months of one's life are really extraordinary. And what we have tried to do, this program, is to try and provide through the tax program help and assistance to those families both in terms of getting insurance and being able to cover some of those extraordinary expenses. It's one of the areas of greatest concern, I think first of all to the parent, because the parent knows that they are draining the family's resources and of course, the son or daughter knows that because they are seeing that they have to want the best in terms of the parent, the best in the care, and they're worried because they're sacrificing the children's future education.

So this, again, provides enormous tension and anxiety for those families, and this provides some relief. It doesn't do all of the kinds of things we'd like, and let me just finally say I would hope that we can build on this in the next Congress. We didn't achieve all we would have liked, or at least I would have liked to have seen, that President Clinton would have liked to have seen in the last Congress, but we've made a great progress in this one, and I hope we can continue the bipartisan effort, and that we can continue to make progress --

CHARLAYNE HUNTER-GAULT: Sen. Kassebaum, let me just ask you about the part about the self-employed, who can buy insurance now, or get an increase in tax deductions. Explain that one, briefly to me and the significance.

SEN. NANCY KASSEBAUM: Yes, and also let me say on the long-term health insurance credit, this was something that Sen. Dole added, and which was unanimously supported in an effort to encourage people to take long-term insurance. This has been very expensive, and this will be a tax credit designed to encourage that people take that type of insurance. The self- employment --

CHARLAYNE HUNTER-GAULT: Excuse me. How much of a tax credit?

SEN. NANCY KASSEBAUM: What is that amount? I can't think of what it is.

SEN. EDWARD KENNEDY: Well, it's a modest credit, and it builds up over a period of years.

CHARLAYNE HUNTER-GAULT: Right.

SEN. EDWARD KENNEDY: It's not going to offset the types of costs but it'll help relieve, I suppose, people probably 30, 35 percent of the kinds of burden that they would have for maintaining someone in, in a nursing home.

CHARLAYNE HUNTER-GAULT: All right. Let's go --

SEN. EDWARD KENNEDY: But it's the beginning of a program. I think it could be built over a period of time. It's constrained really because of the cost of it, but it's a down payment; it can be expanded; hopefully, it will over a period of time.

CHARLAYNE HUNTER-GAULT: All right. Sen. Kassebaum, for the self-employed, yes.

SEN. NANCY KASSEBAUM: If you're self-employed, currently you've been able to deduct 30 percent of your insurance costs. Umm, this will now enable you to deduct 80 percent. Umm, this is to balance what an employer can deduct 100 percent of the costs that they have to cover employees, for instance, and this will be a balancing of fairness to those who have -- are self-employed.

SEN. EDWARD KENNEDY: See, this has the larger employers are able to take the whole deduction. The small employers are not individuals, and what happens is you find out that in small businesses, as well as individual, they pay about 35 or 40 percent higher premiums. So they don't get the favorable tax treatment, they're paying more, and it's, it's amazing to me that smaller businesses are, or individual, self-starting companies provide the coverage that they do.

CHARLAYNE HUNTER-GAULT: I understand that the Senate has just passed this bill, and the House earlier and just a few minutes ago the Senate passed it 98 to nothing, so what does that mean in terms of -- Sen. Kassebaum, there's a wonderful smile on your face, listening to that news.

SEN. EDWARD KENNEDY: Well, she should -- if I can take -- before she answers, under Sen. Kassebaum's leadership, it passed unanimously in the Committee a year ago today, it passed unanimously on the floor, and now she's got a unanimous win.

CHARLAYNE HUNTER-GAULT: All right. Congratulations. When does this go into effect, Sen. Kassebaum?

SEN. NANCY KASSEBAUM: July 1st of 1997.

CHARLAYNE HUNTER-GAULT: In other words, a year from now?

SEN. NANCY KASSEBAUM: Yes.

CHARLAYNE HUNTER-GAULT: Now, Senator, you said a few moments ago that this bill obviously doesn't do everything that you wanted it to do, it does little for the 40 million people who don't have insurance, there's no equivalent coverage for mental health. Is legislation to cover those and other things likely to happen in the future? I mean, is there now a mood to move on, on health care reform?

SEN. NANCY KASSEBAUM: I'm sure there is, and Sen. Kennedy, of course, has been a real pioneer in that. I am retiring at the end of my term this year, and Sen. Kennedy will be here to carry on. Sen. Domenici just today introduced legislation regarding mental illness and coverage for such. Both Sen. Kennedy and I have joined as co-sponsors, and there'll be a hearing on that bill in September.

CHARLAYNE HUNTER-GAULT: Right.

SEN. NANCY KASSEBAUM: We're also supportive of the 48-hour stay for newborn mothers in the hospital, which Sen. Bradley has introduced, and we are both supportive. So these are measures that are out there, I think designed to help in particular areas where there is a real need. And let me say on the legislation that we're talking about that we've just passed and that's upcoming, after having a clip of what you showed earlier, this shows where bipartisanship can come together.

It's not always easy, and we don't always agree, and we can spend some countless hours debating, but at the end of the day for the best interest of legislation that we felt was important, it did take bipartisanship, and that did come together, and I think that's what made it successful.

CHARLAYNE HUNTER-GAULT: Great. Well, thank you both for joining us.

SEN. EDWARD KENNEDY: Could I just add -- mental health has been the stepchild of our heath care system, so we hope we can make some progress.

CHARLAYNE HUNTER-GAULT: Thank you, Senator. Bye.

[END]

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