Costs will force health benefit cuts, backers admit

February 10, 1994|By Karen Hosler and John Fairhall | Karen Hosler and John Fairhall,Washington Bureau of The Sun

WASHINGTON XXTC — WASHINGTON -- The package of benefits that Americans would receive under President Clinton's health reform plan is likely to be scaled back to quell repeated criticism of the plan's cost, Clinton allies in Congress acknowledged yesterday.

Business groups criticized the cost of the Clinton plan last week, and the Congressional Budget Office reported Tuesday that the plan would increase the deficit by $70 billion in the first six years -- disputing the White House claim that the plan would lower the deficit.

"I think whatever we pass has to at least be deficit-neutral," said Rep. Benjamin L. Cardin, a Baltimore Democrat and key backer of the Clinton reform goals. "I would hope it would begin to reduce the deficit in the first five years."

House Speaker Thomas S. Foley, a Washington state Democrat, said he believed Congress would fix the problem by cutting back on the program costs. "Premium costs are adjustable; benefit packages are adjustable," Mr. Foley said. "The president did not ever suggest that he was inflexible about anything that achieved guaranteed health care for all Americans."

Many lawmakers believe that the basic benefits package and the small-business subsidies in the Clinton plan are too generous.

In addition to basic benefits, the Clinton plan would guarantee all Americans prescription drug coverage and long-term care. Businesses would pay 80 percent of their workers' insurance premiums. Workers would pay 20 percent, but the federal government would subsidize small firms with low-wage employees.

Mr. Cardin is among lawmakers who have publicly raised the possibility of reducing the benefits package. But this is a highly sensitive issue that so far has been discussed mainly in private.

On the question of business subsidies, Rep. Ron Wyden, an Oregon Democrat who is sympathetic to the Clinton approach, and Sen. Edward M. Kennedy, a Massachusetts Democrat and key Clinton supporter, say they could be scaled back. Mr. Kennedy suggested giving subsidies only to businesses with 50 or fewer employees, rather the threshold of 75 cited in the Clinton plan.

Mr. Kennedy also said that the federal cigarette tax could be raised by $1, instead of the 75-cent increase proposed by the president, and changes could be made in the long-term care program outlined in the Clinton plan.

Another target for cost-cutters is Mr. Clinton's proposal to subsidize the cost of health care for early retirees, ages 55 to 64. Sen. John Chafee, a Rhode Island Republican and GOP leader on health reform, termed this provision "bizarre."

The subsidies have failed to buy support for the Clinton plan from the small business community, as the White House had hoped. The director of the Congressional Budget Office, Robert D. Reischauer, underscored small businesses' concerns when he told the Senate Finance Committee yesterday that the subsidies would gradually disappear under the Clinton plan -- unless Congress acted to extend them.

Mr. Wyden suggested that the subsidy program could be changed by putting a circuit-breaker feature into the bill that would provide help only to those small businesses that have clearly been put in financial jeopardy by the requirement to pay for health insurance.

The lawmakers are still in the very early stages of trying to find a consensus on health reform legislation. Neither the Clinton proposal nor any alternative has been able to attract a majority in either chamber. Most members believe that Congress will ultimately agree to a compromise that includes features of the various bills.

But despite lawmakers' increasing demands for changes in the president's health plan, White House officials are not publicly willing to agree to anything as drastic as a slimmer benefits package. They insist that the Congressional Budget Office study amounts to good news because it does conclude that the president's plan could slow the rate of health care spending and provide all Americans with insurance.

Yesterday the president's major backers in Congress emphasized this theme, led by Senate Majority Leader George J. Mitchell. Question by question, he asked Mr. Reischauer: Would all Americans be covered? Would the Clinton plan save businesses money? Would the plan eventually lower the deficit -- after the first six years?

"Correct," Mr. Reischauer responded to all the questions.

But the congressional budget director expressed skepticism that Congress and the country would stick with a key component of the Clinton plan: government-imposed limits on insurance premium increases.

While this tool would restrain the growth of health care spending, which has been rising at more than three times the rate of inflation, it would create "social pressures," he warned.

Mr. Reischauer didn't say that rationing would result -- as some lawmakers contend -- but he said some health care workers could lose their jobs.

The first House subcommittee action on the Clinton bill is scheduled to begin Feb. 23.

But it may take until Easter for some version of the measure to begin taking shape.

Congressional leaders hope for approval from the full House and the full Senate by July.

To advance their cause, House and Senate Democratic leaders and chairmen of the five major committees that will consider reform legislation met at the White House yesterday with Mr. Clinton, Hillary Rodham Clinton and more than a dozen of their top aides.

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