Statement on Signing the Health Insurance Portability and Accountability Act of 1996

I am pleased to sign into law H.R. 3103, the "Health Insurance Portability and Accountability Act of 1996." For the first time, this Act will ensure the portability of health benefits when workers change or lose their jobs and will protect workers against discrimination by health plans based on their health status.

For too long, tens of millions of Americans have been denied health insurance coverage because they have preexisting conditions. We have all heard their stories.

— A husband and his pregnant wife lose their insurance and then find they cannot buy new coverage because her pregnancy is considered a preexisting condition.

— A young woman starting out in her career cannot accept a promotion with another company because its health insurance policy won't cover her diabetes.

— A small business owner faithfully pays his group health insurance premiums for years only to learn that his coverage won't be renewed after one of his employees develops a heart condition.

Since taking office, I have been fighting for changes that would stop this kind of unfairness and make health insurance more accessible for all people, including the most needy. I am pleased that the Congress has responded to my call. In passing this Act, a modest but important step has been taken to improve Americans' access to health care coverage.

This legislation will set into motion several key reforms. First, it will eliminate the possibility that individuals can be denied coverage because they have a preexisting medical condition. Second, it will require insurance companies to sell coverage to small employer groups and to individuals who lose group coverage without regard to their health risk status. Finally, it will require insurers to renew the policies they sell to groups and individuals.

In addition to the health insurance reforms, this legislation will help strengthen other aspects of our health care system.

— It increases the tax deductibility of health insurance premiums for the self-employed and their dependents from 30 percent to 80 percent by calendar year 2006.

— It significantly expands Federal authority and resources to combat fraud and abuse in Federal health programs, such as Medicare, and in the private sector.

— It provides for the development of: (1) national standards for the electronic submission of health insurance claims that will reduce paperwork, administrative costs, and burdens for doctors and hospitals; and (2) privacy protection recommendations for health information generally, and, in the absence of additional legislation, regulations for privacy of health care claims information.

— It establishes consumer protection standards for certain long-term care insurance policies and provides tax clarifications to make those policies more affordable and available.

Like most legislation, this Act includes compromises that are less than perfect. For example, it includes a provision that will allow a limited number of individuals covered by catastrophic health insurance to establish tax-advantaged medical savings accounts, or MSAs. I opposed an open-ended, unconstrained expansion of MSAs because of my concern that MSAs may create incentives for healthier people to select catastrophic health coverage, which experts believe would increase premiums for those who choose traditional, comprehensive health care policies. I agreed, however, to work with the Congress in crafting a compromise that would permit the establishment of a limited number of MSAs. This limited use of MSAs will be studied carefully for a period of 4 years before deciding whether or not to expand them to the broader health insurance market, and the Congress will have to consider this issue and vote again before doing so.

Similarly, while the bill makes some of the positive changes that I have proposed to strengthen our efforts to combat health care fraud and abuse, I am concerned that it also contains a provision that could weaken those efforts. I oppose the requirement that Government officials provide advisory opinions on whether certain arrangements violate criminal health fraud statutes. The Attorney General and the Secretary of Health and Human Services are concerned that advisory opinions of this nature could create complexities that would burden the efforts to enforce laws against health care fraud and abuse. Therefore, I am directing the Departments of Justice and Health and Human Services to work closely together in implementing this provision to ensure that it promotes and protects Federal law enforcement activities relating to health care fraud.

Finally, I want to reiterate my disappointment that the Congress dropped from this legislation the mental health parity provision that received such bipartisan support in the Senate. Individuals with mental illness have long suffered from discrimination in health plans that impose severe financial burdens on top of the illnesses they already face. I urge the Congress to act at the earliest opportunity to require parity in health insurance coverage for mental health services. I look forward to working with the Congress to address this critical issue.

As I sign this legislation, I am particularly grateful to Senators Kassebaum and Kennedy and the many other Members of Congress who worked tirelessly to assure that this bill is a meaningful and important step toward making health care more accessible and more secure for millions of Americans. I pledge to continue this effort and hope that the Congress will work with me and so that all Americans can have health care security.

WILLIAM J. CLINTON

The White House, August 21, 1996.