Statement of Administration Policy: H.R. 3103 - Health Coverage Availability and Affordability Act

(House)
(Archer (R) TX and five cosponsors)

The Administration supports House passage of a "clean" health insurance reform bill, similar to S. 1028 (Kassebaum/Kennedy), as reported by the Senate Committee on Labor and Human Resources, and H.R. 2893, as introduced by Representative Roukema.

The Administration opposes controversial and such potentially harmful provisions in H.R. 3103 that could jeopardize bipartisan support for basic health insurance and effectively prevent enactment of much needed insurance reform legislation. The provisions include:

Medical Savings Accounts (MSAs). The provisions of H.R. 3103 that extend tax breaks to promote the sale of untested Medical Savings Accounts would cost an estimated $1.8 billion in revenue over seven years. MSAs will provide a tax break for the healthiest and wealthiest individuals (the only people who could afford high-deductible policies) and attract them out of the general health insurance market, potentially raising premiums for all other people. We strongly object to this provision and the use of Medicare anti-fraud savings to pay for the provision.

Caps on medical malpractice awards and limits on malpractice actions. While we support medical malpractice reforms, we oppose federally-imposed caps on punitive and non-economic damage awards.

Preemption of state regulation of Multi-Employer Welfare Arrangements. H.R. 3103 severely limits the ability of states to regulate multiple employer welfare arrangements (MEWAs). It will have the effect of slowing or halting recent State efforts to prosecute illegal and fraudulent MEWAs. In addition it will encourage greater "cherry-picking" in the insurance market, potentially raising health insurance costs for other people.

Weakening ban on sale of duplicative insurance policies to Medicare enrollees. H.R. 3103 permits the sale of duplicative insurance policies (those that duplicate Medicare benefits and will not pay claims Medicare already pays) to individuals so long as they include some home health or long term care benefits. It will make the elderly once again vulnerable to the unscrupulous marketing of worthless, duplicative insurance policies. While this provision is defended as necessary to permit the sale of legitimate long term care policies, such authority is granted elsewhere in H.R. 3103.

Weakening of anti-fraud and abuse protections. We strongly support efforts to combat health care fraud and abuse and have included a proposal in the President's fiscal year 1997 budget. However, H.R. 3103 exempts managed care arrangements from federal anti-kickback laws and raises the standard of proof necessary to impose civil money penalties for the submission of inappropriate Medicare claims. It also requires the issuance of advisory opinions that will distract law enforcement agencies and otherwise undermine their anti-fraud activities, and it does not provide for appropriate coordination of the federal agencies with current fraud and abuse enforcement authority. Together, these provisions cost the Medicare trust funds almost $1 billion over seven years, according to CBO.

Pay-As-You-Go Scoring

H.R. 3103 would affect both direct spending aqd receipts; therefore, it is subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation Act of 1990. OMB's estimate of tlie pay-as-you-go effect of this bill is under development.