Levy on payrolls to finance health insurance considered

May 06, 1993|By New York Times News Service

WASHINGTON -- Administration officials said yesterday that they are considering asking employers to pay a percentage of their payrolls in premiums to help finance health care for all Americans. To raise more money, employees would have to pay a portion of their earnings.

Employers would pay the premium to a regional health insurance purchasing group, which would buy coverage for hundreds of thousands or millions of people. The "payroll premium" would apply to all companies that take part in the purchasing pool, including many small businesses that do not now provide health benefits to their workers.

Most of the nation's biggest companies serve as their own health insurers, and the administration probably will let them continue to do so. But it hopes to lure them into the new purchasing pools.

The administration has been searching for ways to pay for its plan to revamp the nation's medical system. White House officials have assured business executives that the premium would not exceed 7 percent of payroll. If that is the case, the money would cover only part of the cost. Businesses would pay the premium instead of whatever they now spend on health benefits.

The administration has discussed many other sources of revenue, including a national sales tax and higher cigarette taxes. The cigarette tax increase is likely, but the sales tax idea has apparently been discarded as politically unacceptable.

Last week, administration officials mentioned the payroll premium as one of many options. Yesterday, they said there was a strong possibility that it would be included in President Clinton's proposal this spring.

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