Behind Confusing Health Plans, Some Basic Issues

February 20, 1994|By JOHN FAIRHALL

WASHINGTON — Washington.--With the health reform debate dragging into its second confusing year, you may feel like a Stallone fan at a Bergman retrospective, wondering: Hey, when does the action begin? What is this movie all about anyway?

Answers are coming soon. Congressional committees will start writing legislation in the next two weeks. While this may chug on into the fall, a rough draft of the reform plot could appear by early spring. That'll give Americans their first clue to how lawmakers plan to fix problems in a health system that offers magnificent care -- to those with insurance that can pay the ever-rising price.

Now is a good time for the public to tune in to the debate. In anticipation of congressional committee action, those with a stake in the outcome -- the Clinton administration, lawmakers with reform bills and interest groups -- are clamoring for attention, trying to sway public opinion and position themselves. Tens of millions of dollars are being invested in advertising, mass mailings, telephone banks, grass roots organizing and campaign contributions.

President Clinton and his wife, Hillary, threw themselves into the fray with new vigor last week, urging potential allies such as senior citizens and health plan administrators to join them. "The time has come to be counted, to stand up, to take a stand and fight with us if you want to get something done," the president shouted at an audience of 2,000 elderly persons in New Jersey.

Most Americans haven't made up their minds about how to proceed with health reform or even whom to listen to: the Clintons? Doctors? Lawmakers with other reform plans? Or Harry and Louise, characters in the advertisement created by the insurance industry to attack the Clinton reform bill?

It's easy to get lost in the details of reform bills, to be steered off course by the rhetorical racket generated by groups and politicians that have their own interests at heart. But keep your eye on the big picture. Boiled down, the reform debate isn't that hard to understand. Almost everyone agrees on what the problem is, even if some people don't call it a crisis. Consider these two issues:

* There are 38 million Americans without insurance and millions more with bare-bones benefits. Their numbers are rising. People with insurance today can lose it if they're laid off or move to a job that doesn't provide benefits.

Add to these statistics the individual Americans who are denied insurance because they're sick or who are bankrupted by medical costs that exceed their policies' limits.

* The cost of health care is rising two to three times faster than the general inflation rate. The nation spends 14 percent of its gross domestic product on health care and in five years will be spending 19 percent or more, at the current pace.

This eats into the profits of employers, undercuts wage gains for workers and explodes the cost of the government health programs for the elderly and poor, Medicare and Medicaid. Many states faced deficits in recent years because of Medicaid, the costs of which are shared with the federal government.

Unable to pay staggering insurance bills, individuals go without coverage. Employers cut back, offering fewer benefits and choices to employees and requiring them to pay more.

Finding a solution to these problems starts with one question: Should the government guarantee that all Americans have health insurance, as the president insists? After a year in which the Clintons focused attention on this issue, polls show the public believes all people should be covered -- providing this guarantee doesn't cost them too much or come wrapped in a reform plan they don't like or comprehend.

Hence, the debate over whether to guarantee everyone insurance turns in large measure on the financially and politically risky question of how to pay for it. Covering 38 million uninsured ++ Americans, and improving the meager benefits of others, will cost on the order of $100 billion a year.

It can come from three pockets: employers, who under the Clinton plan would be required to pay the bulk of insurance costs of workers and their dependents; individuals, who would be required to buy insurance under the plan proposed by Sen. John H. Chafee, the Rhode Island Republican; or the government, which under another reform plan would pay all health bills by raising taxes and eliminating private insurance premiums.

The details of financing aside, what really worries members of Congress is the long-run cost of the government guaranteeing health care. Any plan might work for a few years. But what would happen if the costs of health care wildly exceed projections, as occurred with the Medicare and Medicaid programs? Lawmakers would have to raise taxes or cut benefits, with either action sure ++ to shorten their political careers.

"I believe this is totally uncharted waters," Mr. Chafee said recently, summarizing the fears of Democrats and Republicans alike.

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