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1996 | 08 | 22 | Articles | The Wall Street Journal | Politics | Health
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The Wall Street Journal
August 22, 1996
Clinton Signs Bill to Secure Health Insurance Portability

President Clinton signed legislation Wednesday that will guarantee health insurance to people who change jobs.

The Health Insurance Portability and Accountability Act extends new protections to an estimated 25 million Americans in so-called "job lock," a situation in which employees don’t switch jobs for fear of losing coverage due to pre-existing medical conditions.

The legislation includes a phased-in 80% tax deduction for health-insurance premiums for the self-employed by 2006, up from the current 30%. It also allows for the creation of 750,000 medical savings accounts that, much like individual retirement accounts or 401(k) savings plans, would enable individuals to set aside tax-free contributions toward routine medical expenses. Most of the bill’s provisions will take effect July 1, 1997.

The legislation was jointly sponsored by Sens. Nancy Kassebaum (R., Kan.) and Edward Kennedy (D., Mass.) and enjoyed widespread support, passing the Senate unanimously and the House 421-2 earlier this month, and both parties sought to claim credit for it Wednesday.

"Today we declare a victory for millions of Americans and their families," President Clinton said. "No longer will you live in fear of losing your health insurance because of the state of your health."

"The American people should ask why it took President Clinton more than three years to support these common-sense reforms, which he previously threatened to veto," Republican presidential nominee Robert Dole said in a statement.

As the parties quibble over the credit, Democrats have done their utmost to reclaim the spotlight during this week’s convention interlude, using the White House as a backdrop to stage several elaborate ceremonies. For Mr. Clinton, this week’s bill signings for a higher minimum wage, health-insurance and welfare reforms and business tax breaks provide a high-profile way for him to seize attention and credit in the wake of the Republicans’ national convention, and in the buildup to his own party gathering next week in Chicago.

En route to the Democratic convention by train next week, the president will seek to keep the spotlight with daily announcements of new initiatives. He’s also expected to clear new restrictions on tobacco marketing Friday.

In particular, Mr. Clinton will propose a still-evolving initiative to help welfare recipients find work through a combination of tax and wage subsidies for employers who hire them. The aid would be coordinated with local governments, aides say.

In addition, the president is expected to pull one long-pending proposal from the White House shelf to permit homeowners to avoid capital-gains taxes on the sale of a primary residence. Under current law, capital-gains tax relief goes to those age 55 and over. In practice, removing the age limit wouldn’t have a major impact since many younger taxpayers sell a home then use the proceeds to buy a more expensive one, avoiding capital-gains taxes in that way.

The White House zeal to pitch new ideas, if minor ones, reflects the competition with Robert Dole now that the Republican presidential candidate has put forth an ambitious tax-cut program. Mr. Clinton’s political advisers would like bolder strokes, but his economic advisers for now have prevailed in limiting initiatives to ideas that have relatively little if any federal cost.