WASHINGTON -- An unusual coalition of major corporations, labor unions and consumer groups today was to announce a radical plan for health care reform, including mandatory medical contributions by businesses and a national health care budget with tough cost controls on payments to doctors and hospitals.
Under the proposal, major segments of the big business community, where health insurance coverage is routine, are demanding for the first time that all companies -- large and small -- provide insurance to employees or else contribute to a public program.
The plan -- likely to be opposed by doctors, hospitals, small business, the private health care industry and the Bush administration -- calls for all businesses to provide health insurance, or else pay a 7 percent payroll tax to finance the cost of covering their employees under a public program, according to a draft obtained by the Los Angeles Times. Workers enrolled in this public program would pay 1.75 percent of their salaries.
In addition, all companies would contribute another 0.5 percent of payroll, with a matching sum from workers, to help cover the cost of the public program. It would provide comprehensive medical insurance for the unemployed, those living below the poverty line, part-time workers, and employees at companies without insurance.
The plan, hammered out after 18 months of delicate private negotiations, was developed by the National Leadership Coalition for Health Care Reform. The plan emerged from discussions involving dozens of companies, unions and consumer organizations.
It is certain to prompt intense opposition from some of the most powerful interests in the medical care field. Hospitals and doctors will oppose any further controls on their fees and charges. Companies producing and selling medical equipment and technology will fight against any efforts to restrict capital spending.
The plan also will be opposed by many small-business owners, who object to new taxes and the mandatory aspect of the program. In addition, the private health insurance industry will fight the plan as a prelude to a national health program that could wipe out the industry.
Numerous health care plans have been introduced in Congress, but no particular proposal has previously won significant support from the business community. The coalition's plan is likely to give a major boost to the concept of "pay or play," in which companies must offer private health insurance or else pay into a fund for a public program.
The Bush administration refused to make an official comment yesterday on the plan.
The administration is now working on its own package, which is likely to focus on tax incentives, and a possible expansion of Medicaid.
The coalition plan was to be unveiled by representatives of Bethlehem Steel, Dayton Hudson Corp., the United Steelworkers, the Service Employees International Union, the American Nurses Association and Families USA Foundation, an organization promoting expanded health care coverage.
"There is a growing consensus that America's health care system needs to be overhauled -- because, in plain words, it is not good enough," the organization's draft report says. "It is not meeting the needs of Americans, in sickness and in health."