COMPROMISE REACHED ON HEALTH COVERAGE BILL.

Byline: David Hess and R.A. Zaldivar Knight-Ridder Tribune News Wire

House and Senate negotiators agreed Wednesday night on a hard-fought health-insurance reform bill that will enable workers to keep their coverage if they lose or change their jobs.

The measure, which has tied Democrats and Republicans in knots for months, is expected to be passed by the House today and the Senate on Friday, then sent to President Clinton for his signature.

Clinton, in a statement, applauded the measure as a ``long overdue victory'' for Americans worried about their health insurance.

Sens. Nancy Kassebaum, R-Kan., and Edward Kennedy, D-Mass., the chief sponsors in the Senate, hailed the agreement as one that would provide Americans with more peace of mind about their insurance protection.

``I'm glad we've been able to put differences over details aside and focus on the fundamental principle of providing millions of Americans with a greater sense of security regarding their health-insurance coverage,'' Kassebaum said.

Kennedy also said the bill would remove a serious obstacle felt by many workers who forgo opportunities to move to better jobs or go into business for themselves for fear of losing health-insurance protection.

``This is a problem especially for people who have pre-existing health conditions, or who have a family member with a chronic health problem,'' Kennedy said. ``Now they won't have to worry so much about that risk.''

In arriving at the compromise that finally freed the bill, the negotiators jettisoned a Senate-added provision that would have greatly expanded insurance coverage for mental health problems.

Kennedy said later that he and other advocates of mental health coverage - including Sen. Pete Domenici, R-N.M. - would keep trying in the next Congress, next year, to provide it.

Among other things, the revamped bill authorizes a test of medical savings accounts (MSAs) for self-employed people and small businesses. With MSAs, people buy lower-cost ``catastrophic insurance'' for major illnesses and pay routine costs out of a special tax-sheltered account.

In addition, the legislation may help make private long-term-care coverage more popular with consumers by clarifying that it's a tax-deductible medical expense.

Most analysts predict the bill will have little impact on the biggest goals of health-care reform: providing coverage for tens of millions of uninsured Americans and controlling medical costs.

When compared to Clinton's ambitious and ill-fated proposal of two years ago, Kassebaum-Kennedy is but a small step.

Yet it could set a pattern for health reform efforts in the future. The strategy: Break problems down into manageable pieces and seek bipartisan support for solutions.

``I hope it's the beginning of a new generation of more modest reforms, rather than the consolation prize for the failed health reform effort,'' said Drew Altman, president of the Kaiser Family Foundation, a California-based health care charity.

Among the issues future congresses could tackle: guaranteed coverage for children and consumer protections for patients in health maintenance organizations. It's too early to tell if that will happen.

For now, the main accomplishment of the Kassebaum-Kennedy bill is to limit insurance companies' ability to deny coverage to people because of continuing health problems, also called ``pre-existing conditions.'' Many states already have passed similar laws, but the federal bill also applies to large-employer plans that are exempt from state regulation.

Pre-existing conditions are an insurance wild card for many families, locking some people out of the market altogether and creating gaps in coverage for others. Under Kassebaum-Kennedy, insurers could deny coverage of an ongoing medical problem for no more than 12 months. A patient who had insurance under a previous plan would get credit for each month he or she was covered.

For example, a worker with diabetes who had coverage with a previous employer for a year or more, could take a new job without having to worry about losing health insurance.

Once a person has undergone one 12-month waiting period, the limitation can never be applied again.

Also, people who leave an employer plan to become independent contractors or start a business would gain the right to buy insurance coverage on their own.

The provisions are technical, but they add basic security. At least 25 million people would benefit, according to congressional estimates.

``We're not going to hear complaints about pre-existing conditions anymore,'' said Paul Fronstin, a health insurance expert with the Employee Benefit Research Institute, an independent think tank in Washington.

``But there is always going to be some other horror story people will talk about,'' he added. ``The issue ultimately is going to come down to affordability and coverage for the uninsured.''

Most of the 39.7 million Americans who are uninsured at any given time are no less healthy than the rest of the population. And the overwhelming majority are workers or dependents of a worker.

For them, the main issue is affordability. Family coverage can run $5,000 to $6,000 a year. Without an employer contributing, many workers cannot afford health insurance on their own. The compromise bill does not provide any major government subsidies, but it does require insurers to offer competitively priced policies to people making the switch from group to individual policies.