Administration details high cost of president's health plan States may pay more for workers' insurance

October 20, 1993|By New York Times News Service

WASHINGTON -- Administration officials have disclosed that President Clinton's health plan would require some state and local governments to pay more than private employers pay for employees' health insurance.

Private employers would not have to contribute more than 7.9 percent of their payrolls. But no such limit would apply to public employers, the administration officials said.

The president's decision to exempt state and local governments from that limit alienates some of his natural allies, including public employee unions, which strongly supported him in the 1992 campaign and have pleaded for a ceiling on their health insurance costs.

Officials of the U.S. Conference of Mayors, the National Association of Counties, the National League of Cities, the National Governors' Association and public employee unions all expressed concern about this decision.

They said it appeared that at least 10 states would pay more than 7.9 percent of their payrolls to provide the package of health benefits required under Mr. Clinton's plan.

The states are Maryland, New York, New Jersey, Connecticut, New Hampshire, Rhode Island, Vermont, Massachusetts, Michigan and Pennsylvania.

Medical costs and health insurance premiums tend to be higher in states with high personal income, large numbers of doctors, a large proportion of medical specialists and a high concentration of elderly people.

In response to a question last week, Kevin Anderson, a White House spokesman, said: "The 7.9 percent cap does not apply to public employers. Their low-wage employees are eligible for the same kind of assistance on their premiums and co-payments as anybody else. But the cap does not apply to them."

Administration officials disclosed details of the financing and subsidies in the president's plan as they rushed to draft legislation for submission to Congress next week.

The officials said there would be some limits on the amount of federal money available for subsidies to small businesses and their low-wage workers. Low-income families would have a legally enforceable right to such subsidies.

But the officials said it was not clear what would happen if demand for such subsidies exceeded the amount available because of a recession, an epidemic or other unforeseen events.

Using the jargon of budget analysts in Washington, the officials said Mr. Clinton's subsidies would probably not provide an absolute, open-ended entitlement to benefits like Social Security or Medicare, but would establish a "capped entitlement."

Congress would need to appropriate additional money if claims exceeded the expected amount.

Stan Dorn, who has represented low-income people as a lawyer at the National Health Law Program, said the subsidies should not depend on the vagaries and politics of the annual budget process.

"If forced to compete for money with other, better established interest groups, low-income consumers and small businesses may lose out," he said.

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