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WASHINGTON-Proclaiming the end to the era of big government, President Clinton last week formally endorsed limited health care reform legislation.

In his State of the Union Address, President Clinton urged Congress to pass a measure-introduced by Sens. Nancy Kassebaum, R-Kan., and Edward Kennedy, D-Mass.-that would curb pre-existing condition exclusions in health care plans.

Enactment of that measure, President Clinton said, would be a start in making health insurance available to all Americans.

Ironically, it was the Clinton administration's own health care reform package that linked the administration with the big government approach to solving problems. That package, among other things, would have forced most employers to purchase coverage through monopolistic government-organized pools.

But after the collapse of his health care reform package and the drubbing in the November 1994 congressional elections, President Clinton acknowledged he had overreached on health care reform and said next time he would develop a more limited reform package.

Last week's State of the Union Address, though, is the first time the administration endorsed a specific health care reform bill introduced in Congress since the collapse of its reform package.

Under the Kassebaum-Kennedy legislation, approved by the Senate Labor and Human Resources Committee last summer, group plans generally could exclude coverage for pre-existing conditions for up to 12 months. A pre-existing condition is defined as one that is treated within six months prior to an individual joining a health care plan (BI, Aug. 7, 1995).

However, the 12-month period in which pre-existing medical conditions were excluded would be offset by the amount of time a new employee was covered under a previous health plan.

For example, if an individual changing jobs had been covered under a previous group plan for four months, the new employer could not deny coverage for that condition for more than eight months.

More than 70% of indemnity plans now restrict coverage for pre-existing medical conditions, according to benefit consultant A. Foster Higgins & Co. Inc. Health maintenance organizations, though, typically do not restrict care.

In his address, President Clinton also reaffirmed his strong opposition to legislation that would allow employers to remove surplus assets from overfunded pension plans.

Such legislation "would endanger" the stability of pension plans, he said. While reversion legislation would raise money for the government, "I believe it is false economy. I vetoed that proposal last year and I would have to do so again," he said.

President Clinton was referring to a provision in a sweeping budget bill approved by Congress last year that would have allowed companies to remove surplus assets from their pension plans so long as the plans remained at least 125% funded after the reversion and the surplus assets were used to help pay the cost of other employee benefit programs.

President Clinton also said he continues to back a pension simplification package that he first unveiled last year. That package, among other things, would make it easier for employers to run non-discrimination tests on their 401(k) plans, allow upper middle income workers-in certain situations to contribute more to 401(k) plans-and allow tax-exempt employers to establish 401(k) plans (BI, June 19, 1995).

Those pension provisions were part of the broader budget legislation that President Clinton vetoed last year. The budget bill was vetoed chiefly because of administration concerns that cuts in projected spending on the Medicare and Medicaid programs were too steep.