Health plan gets price tag $100-$150 billion is the estimate

May 03, 1993|By New York Times News Service

WASHINGTON -- Government financial experts have told the White House that President Clinton's health-care plan may require $100 billion to $150 billion a year in new public and private spending, depending on the scope of benefits guaranteed to all Americans.

Several administration officials contend that those numbers are too high and are urging the financial experts to reduce their estimates. So far, they have refused to do so.

The estimates, coming at a time when Congress is anxious about new taxes needed to pay for a reorganization of the health care system, are contained in confidential work papers from the President's Task Force on National Health Care Reform.

Financial experts have been working on cost analyses for months, but only recently, as the administration's thinking has crystallized, have estimates of overall costs begun to circulate inside the government. They have not been made public before.

The financial experts, from the Federal Health Care Financing Administration, estimated the cost of three possible packages of benefits. The least generous would cost $99.5 billion a year, while the most generous would cost $150.6 billion, they said.

Not all that money would come from the government, but the administration has not decided how the cost might be divided among government, businesses and households. Nor has Mr. Clinton decided which type of package to propose when he unveils his plan this month, though White House officials have said it will be comprehensive.

The three possible benefits packages would cover hospital and doctors' services and some prescription drug costs, but they vary widely in how much of the cost would be covered by insurance and how much consumers would have to pay.

The manager of the task force, Ira C. Magaziner, estimated in early February that the health program might require $30 billion to $90 billion a year in new spending by the federal government alone. The nation as a whole is expected to spend more than $900 billion on health care this year.

White House officials say the new estimates are subject to change because final decisions on the details of the president's plan have not been made.

Moreover, they argue, people should not be alarmed by the estimates because total spending on health care in the United States is already increasing by $100 billion a year. They say Mr. Clinton's plan will eventually slow the increase.

Most of the new money -- $69.5 billion to $82.2 billion, not all of it from the government -- will be needed to provide coverage for people who do not have any health insurance, the actuaries said.

The Health Care Financing Administration runs Medicare and Medicaid, the programs for 67 million people who are elderly or poor. The agency's chief actuary, Roland E. King, and his staff have decades of experience estimating health costs and population trends. On Capitol Hill, they are respected for independence, integrity and accuracy. But some economists at other agencies still favor lower estimates.

Hillary Rodham Clinton, the head of the task force, said in an interview last week that it was "very difficult" to get government agencies to agree on cost estimates or even on procedures for estimating.

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