Health reformers consider subsidies for insurance

August 31, 1993|By Los Angeles Times

WASHINGTON -- Low-wage earners and many of the small businesses that hire them would be able to buy mandatory health insurance with government-subsidized discounts under the Clinton administration health care reform plan, according to White House sources.

In addition, President Clinton's top health policy analysts are crafting a standard benefits package for the uninsured that will cost about $1,800 per person and $4,200 per family annually, or roughly the current national average for health policies, sources said yesterday.

These and other details of the president's evolving health care initiative are emerging as Mr. Clinton returns to Washington from vacation and begins to put the finishing touches on a massive reform agenda he expects to unveil this fall.

Yet even before the president can present his plan to Congress, outside analysts were quick to challenge the calculations underlying the proposed government subsidies and the cost estimates of the standard benefits plan.

The relatively generous subsidies for small businesses and low-wage earners proposed by the reform task force underscore the administration's desire to win the support of the nation's small business owners. So far, small companies are among the harshest critics of Mr. Clinton's plan to require all employers to provide workers with health insurance, with the cost shared by ++ the firms, their employees and, in some cases, the government.

Despite the administration's apparent overture, a spokeswoman for the National Federation of Independent Business, which has more than 500,000 members, said the group remains unalterably opposed to any government mandate to provide coverage.

"The whole concept of a subsidy should tell the White House that the mandate is burdensome," said Leslie Aubin, a federation health analyst.

Administration officials have said that the president intends to require businesses to pay at least 80 percent of the cost of a standard health plan for its workers, with employees paying the rest. But the emerging Clinton plan would place a maximum ceilings on such outlays: no more than 7.6 percent of total payroll expenses for large companies, 3.2 percent of payroll costs for small, and 1.9 percent of wages for workers.

The plan to subsidize the cost of coverage for some workers and their employers is consistent with past administration statements of intent. But until now, no details had been available to indicate which employees and employers would be affected.

Sources familiar with the task force deliberations said that government-financed subsidies would be provided to all companies with fewer than 50 workers, as long as annual wages average less than $24,000.

If the standard benefits package costs $1,800 per single employee as currently projected, the employer's 80 percent share would amount to $1,440 a year while the employee would be expected to pay the remaining $360, unless the employer chooses to pay more.

In all cases, subsidies would not go directly to individuals or employers; they would be channeled through health insurance purchasing alliances, made up of consumers, that would bargain with medical providers for the best coverage plans.

White House officials stressed that the subsidy and cost figures cannot be considered final, since Clinton has yet to sign off on these and other key elements of the plan.

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