BIPARTISAN HEALTH CARE BILL STALLED BY INSURER OBJECTIONS TO GUARANTEES.

Byline: Robert Pear The New York Times

The health insurance industry, which helped kill President Clinton's ambitious health care proposal in 1994, said Thursday that it objected to a provision of a much more modest bipartisan bill to guarantee coverage for people leaving employer-sponsored health plans.

Clinton endorsed the bill in his State of the Union Message last week, and it was approved unanimously in August by a Senate committee. But the bill, drafted by Sen. Nancy Kassebaum, R-Kan., and Edward Kennedy, D-Mass., has not been called up for debate on the Senate floor, apparently because several senators have registered informal objections.

Since the demise of Clinton's proposal, advocates of universal health insurance coverage have decided to pursue their goal through small steps and incremental measures like Kassebaum's. In the last Congress, she said, there was "broad bipartisan agreement" on such proposals.

Kassebaum said her bill would help millions of Americans who lose health insurance when they change jobs, and she said it would not impose new costs on employers or the government.

The bill would limit the ability of insurers and employers to deny coverage to people because of prior illness or disability.

But Bill Gradison, president of the Health Insurance Association of America, said insurers strenuously objected to one provision of the bill: a requirement that companies selling individual health insurance must offer such policies to people losing group health coverage.

The guarantee would help many people who take part-time jobs, cannot find jobs or start their own businesses after being dismissed by big corporations.

Gradison said this provision "could trigger a meltdown of the individual insurance market on which 10 million Americans rely." A better way to provide coverage for these people, he said, is through state insurance pools, which offer coverage for people unable to obtain it from other sources.

About half the states have established such pools. Many are financed with special assessments on insurers.

Clinton's praise for the Kassebaum-Kennedy bill stimulated interest in the legislation and prompted people to ask why it had been delayed.

But a well-connected health care lobbyist, speaking on the condition of anonymity, said that Clinton's endorsement could be a "kiss of death" for the bill because Republicans did not want to give him a political victory in an election year.

On the other hand, Chris Jennings, special assistant to the president for health policy, said Thursday night: "The president's statement breathes life back into the legislation. It would have been dead if he had not endorsed it."

Gradison said that the effect of Kassebaum's proposal would be "to raise premiums by 10 percent to 30 percent for people who already have individual coverage."

Kassebaum rejected his estimate. She said the increase in individual premiums would be no more than 2 percent or 3 percent.

Health insurers have no plans to fight the proposal with television advertisements like the "Harry and Louise" commercials that lampooned the Clinton plan. But their objections are eerily similar to the concerns raised in 1993 and 1994, when businesses, insurers and even some labor unions suggested that people who had health insurance might suffer under various proposals to guarantee universal coverage.