Health plan to fall short of savings estimate



WASHINGTON (AP)—President Clinton’s health reform proposal will fall $33 billion short of the budget savings predicted earlier, an administration official said Tuesday as the White House readied the plan for delivery to Congress.

The president and Hillary Rodham Clinton were due to bring the 1,300-page bill to Congress in person Wednesday in a ceremony in Statuary Hall, five weeks after Clinton’s initial pitch.

Clinton has argued that without a sharp slowdown in health inflation, the federal deficit would spiral back up later in this decade. But his economic advisers had vowed to sacrifice further deficit reduction before raising taxes any more for health reform.

In the original draft, Clinton’s health plan would have lowered the deficit by $91 billion between now and the year 2000.

Budget Director Leon Panetta said the deficit-reduction figure now is $58 billion.

In addition, the latest version of the plan pushes back by a year—to the end of 1998—the dealine to guarantee coverage for all Americans and legal residents. Panetta said the administration expects 15 percent of all Americans to be covered by the end of 1996 and 40 percent by the end of 1997.

One reason for the lower deficit reduction figure was that the White House added a 15 percent cushion to its pool of subsidies to help small businesses and low-income workers buy insurance, officials said. In addition, expected Medicaid savings originally pegged at $114 billion were reduced to $65 billion.

Mrs. Clinton, who turned 46 Tuesday, went to Capitol Hill Tuesday with Treasury Secretary Lloyd Bentsen to give Sen. Daniel Patrick Moynihan, the chairman of the Senate Finance Committee, a private briefing on the revised plan.

She made the rounds of network evening newscasts to promote the program, saying the more people know about the plan, ‘‘the better they’re going to like it.’‘

Other administration officials said the revised plan will offer discounted coverage to some small businesses with as many as 75 workers. The cutoff had been 50 workers in the original plan.

And a government takeover of employers’ costs of providing health benefits for early retirees ages 55 to 64 will be phased in slowly between 1998 and 2001, said the officials, who spoke on condition of anonymity.

In another change, the White House has backed down from an ambitious goal to reserve half of all residencies for doctors training in primary care, not specialists, within five years.

Instead, it would set a goal of having 55 percent of the residents in primary care by the year 2002. Seventy percent of the25,000 U.S. doctors now are specialists.

And the revised plan will cover dental treatment as well as preventive dental services for children, and emergency dental care for adults.

Clinton said Tuesday he was not willing to water down his health reform plan in the face of criticism from the National Association of Manufacturers that he was promising Americans too much.

‘‘Most manufacturers are going to save money on this. If they want to look a gift horse in the mouth, that can be their decision,’‘ the president said.

Panetta said Clinton had taken pains to avoid creating new ‘‘open-ended entitlements’‘ in health care, ‘‘particularly when we’re trying to discipline the rest of government spending.’‘

Panetta said Clinton has built in a mechanism to cap the entitlements.

A 239-page draft summary of Clinton’s original proposal that leaked out almost seven weeks ago has been a lightning rod for complaints from businesses, hospitals and others with worries about the so-called Health Security Plan.

The plan proposes to pay for the reforms with cigarette taxes, big savings in Medicare and Medicaid, a one percent levy on large corporations and a requirement that all employers and employees buy insurance.

Overall, the bill would require $331 billion in new spending and raise $389 billion in new revenues. Of that new revenue, $89 billion would come from taxes—$65 billion from increasing the tobacco tax and $24 billion from the new corporate assessment.

Some lawmakers have voiced fears that Clinton was concentrating too much power in the hands of an independent National Health Board and the regional alliances that would form a new insurance-buying marketplace.

Under the final plan, the health board would be an executive agency, not an independent board like the Securities and Exchange Commission, the sources said.

And the regional health alliances would accept virtually all health plans with no limits on the number of plans offering traditional, fee-for-service medicine, the officials said.

States, not the alliances, would certify each health plan.

But Lee told the Association of American Medical Colleges that even the fee-for-service plans would receive flat amounts to provide care for all their customers—regardless of whether they paid physicians a salary or a fee for each procedure or service.

The Clinton plan would encourage Americans to join prepaid plans such as health maintenance organizations where their out-of-pocket costs would be lower. Such plans would charge patients $10 each time they went to the doctor with no deductibles.

Advocates for the poor warned that $10 would be a hardship for a poor family on Medicaid, which now has no copayments.

The revised Clinton bill would reduce the copayments for welfare families and allow the health plans to waive them for others as well, the officials said.

Clinton initially promised subsidies for small businesses with 50 or fewer workers and average wages of $24,000 or less. Now the discounts will go to firms with up to 75 employees, varying both by size and average wage.

Clinton’s proposed takeover of the employers’ 80 percent share of premiums for early retirees will be phased in slowly. The government would pick up 10 percent of the employer share in 1998; 20 percent in 1999; 30 percent in 2000, and 100 percent in 2001.

The White House contends that early retirees will still benefit from its switch to community-wide insurance rates, with no discrimination between younger and older workers.