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Q U I C K  T A K E

WITH AN ESTIMATED 43 million Americans lacking health insurance and a medical care system that eats up ever-larger percentage of the gross national product, health care remains a front-burner issue -- despite the dramatic failure of the Clinton Administration's 1994 plan for universal coverage.

Bill Clinton had promised "universal access to quality, affordable health care -- not as a privilege but as a right." Led by First Lady Hillary Clinton, the administration presented an ambitious plan to Congress which would have required businesses to purchase insurance from competing managed care systems, while expanding federally-funded insurance for the unemployed and elderly -- all to be overseen by a federal advisory board in Washington.

Republicans denounced the plan, and other competing plans for a single-payer system similar to Canada's, as a government takeover of the world's finest health care system. Supported by a massive lobbying effort, Republicans put congressional Democrats on the defensive. Though in control of Congress at that time, they never brought the Clinton plan up for a vote.

Many Democrats still favor a federally designed health strategy. With the failure of Clintoncare and the ensuing Republican takeover of Congress, health care reform has turned incremental. For all their differences in 1996, Democrats and Republicans were able to agree to a new law mandating that workers not lose insurance coverage if they lose or switch their employment, the so-called "portability" bill sponsored by Sen. Nancy Kassebaum (R-Kan.) and Sen. Edward Kennedy (D-Mass.). Clinton signed the bipartisan law Aug. 21, claiming as many as 25 million people would be helped.

Attached to that bill was a key Republican initiative (fought strenuously by Democrats) that will create 750,000 medical savings accounts. MSAs allow workers to set aside money for routine medical expenditures, complemented by a high deductible catastrophic insurance policy. Republicans argue that, with the individual in greater control of health spending, costs will go down. Democrats say the plan would only work for the healthy, and would undermine the insurance pools of traditional plans in which sicker people would need to remain.

The Kennedy-Kassebaum law also increased tax deductibility of health plans for self-employed workers and gave tax incentives to create long-term insurance plans. Republicans in the House also pushed limits on damage awards in malpractice suits (which they say pushes up the cost of medicine), and they wanted less state regulation of small business health insurance pools. Efforts to attach these issues to the portability bill were defeated by Democrats.

Democrats, resisting the so-called "free market" approaches favored by Republicans, increasingly favor mandates on businesses to expand coverage. "If the government is to do less," Labor Secretary Robert Reich said in Feb. 7 speech, "then the private sector will have to do more." In this vein, Sen. Jeff Bingaman (D-N.M.) has introduced a bill offering tax incentives to businesses that offers approved health insurance policies.

While not offering specifics, Hillary Clinton declared in her Chicago convention speech that "the country must take the next step of helping unemployed Americans and their children keep health insurance for six months after losing their jobs ... And our nation still must find a way to offer affordable health care coverage to the working poor and the 10 million children who lack health insurance today."

Key in the debate over health care are Medicare (the federal program that provides health insurance to the elderly) and Medicaid (which provides insurance to the poor). Government studies project that Medicare trust funds will go broke within four years if current levels of spending are maintained. For an analysis of the divisive Medicare issue, please click here.

Since taking control of Congress, Republicans have fought to end Medicaid as an open-ended federal entitlement and make it a system of block grants to the states. Similar to their recently enacted welfare reform bill, the Republican strategy counts on increased savings and efficiencies if Medicaid is run by the governors. Democrats have opposed GOP Medicaid plans as undermining the nation's commitment to the poor, and President Clinton vetoed two bills containing Medicaid block grant provisions.

In another health related issue, members of both parties say they want the Food and Drug Administration to shorten the approval process for drugs and medical devices. Sen. Nancy Kassebaum (R-Kan.) has bipartisan support for legislation that forces the FDA to speed the review process, allowing manufacturers to submit less data and requiring the FDA to use outside organizations to help with the process. Led by Sen. Edward Kennedy (D-Mass.) and Rep. Henry Waxman (D-Calif.), critics contend the bill would dangerously compromise public safety.

R E L A T E D  S T O R I E S

  • The Coverage That Travels By John Greenwald, TIME, Aug. 12
  • Counterpoint: How Should Medicare Be Reformed? Stuart Butler, vice president and director of domestic and economic policy studies at The Heritage Foundation, says major reforms are needed immediately; Urban Institute Senior Fellow Marilyn Moon urges a more cautious approach. July 12, 1996
  • Counterpoint: Would Expanded Use Of Medical Savings Accounts Improve American Health Care? John C. Goodman, president of the National Center For Policy Analysis believes so; Progressive Policy Institute Health Analyst David Kendall demurs. June 25, 1996

    P U B L I C  O P I N I O N
  • Do you favor or oppose cutting back on the growth of Medicare, the health care program for the elderly, in order to balance the budget?

  • TOTAL %
    Favor, cutting back a lot 6
    Favor, cutting back a little 13
    Favor, not sure of amount* 2
    Oppose 74
    Not sure 5

    * Volunteered response
    TIME/CNN Poll, conducted October 31-November 6, 1995.

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