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Outline of new national health plan emerges gantlet of issues remain Questions abound on implementation

THE BALTIMORE SUN

WASHINGTON -- Anyone trying to follow the twists and turns of President Clinton's health reform plan is bound to be confused -- the story keeps changing.

One day last week, officials said the plan might phase out Medicare; the next day they said it wouldn't. Last month they talked about imposing a national sales tax to pay for coverage for the uninsured; a week later they ruled it out.

"I think the bulk of the people, if we gave them an exam, wouldn't know what we're doing" on health reform, says Robert J. Blendon of Harvard University, an informal adviser to the president's task force on health care reform.

But an outline of the plan is becoming clear as a June deadline approaches: To control the soaring costs of medical care and guarantee every American decent insurance, the president will recommend a radical shake-up in the way health care is financed and delivered. He intends to:

* Require all employers to pay for health insurance, with employees chipping in.

* Offer a standard package of insurance benefits to all Americans.

* Bar insurers from dropping people because of past or current illness, guarantee people coverage no matter where they work and protect small businesses and individuals from exorbitant rates.

* Assure Americans some choice in selecting their doctors.

But Mr. Clinton has yet to make a range of major decisions that may make or break his plan: Whom would he tax and how much? How long would it be before all Americans have insurance? If states are given flexibility to adapt health reform to their needs, as Mr. Clinton has vowed, will there be 50 health reform plans?

How would costs be controlled? Would Americans who want absolute freedom to choose doctors and hospitals have to pay a prohibitively higher price?

There's been lots of speculation about how he'll answer these questions -- and plenty of confusion.

Nothing is final until Mr. Clinton announces his plan -- and even that date is uncertain. Originally scheduled to be released May 3, the plan now won't come out until next month, and the president is under congressional pressure to delay it even longer.

Insurance benefits

More than 80 percent of Americans already have some form of insurance and basically want better health care at the same cost or less.

Recognizing this, the administration is leaning toward recommending a comprehensive set of benefits for all Americans, including mental health and substance abuse services, dental care, prescription drugs and preventive services, say Hillary Rodham Clinton, head of the health task force, and Ira Magaziner, who coordinates it. Abortion also would be covered, though under the guise of general reproductive services.

Some of the benefits, such as drug coverage and mental health care, are expensive additions to what most people have today and may have to be phased in over several years.

The administration also hasn't spelled out what kinds of health practitioners would have their services paid for under this benefit package. Would your insurance plan pay for a visit to an acupuncturist? Chiropractor? Nurse midwife? The states may decide.

Long-term care is another unresolved issue. Administration officials are committed to establishing a program initially emphasizing home and community-based services for disabled and chronically ill people. But they haven't said how it should be paid for.

Last week, Mr. Magaziner said people in need of costly nursing home services wouldn't have to impoverish themselves to qualify for government aid through the Medicaid program, which serves the poor. Marylanders can't qualify now if their assets exceed $2,500. The administration is considering raising the threshold nationwide to $12,000.

Taxes

Most Americans think they already pay enough for health care. But the administration wants everyone to help pay for coverage of the 35 million Americans who lack insurance. That could cost from $30 billion to $90 billion.

The White House has endorsed higher tobacco taxes and is considering increased taxes on guns, ammunition and alcohol, although beer might be excluded to avoid angering beer drinkers.

Looking for a bigger pool of money, officials are focusing on a payroll tax of 7 percent to 11 percent on employers and 2 percent to 3 percent on workers. The administration also is likely to propose a tax on supplemental insurance benefits -- insurance that people buy above and beyond the standard package of benefits defined by the government.

The biggest potential money-raiser, a national sales levy known as a value-added tax, was jettisoned last month after key members of Congress objected.

Choosing doctors

Polls show that most Americans believe that choosing a doctor is an inalienable right. But to control costs and stimulate competition, the administration wants to create huge health insurance purchasing cooperatives in each state.

These "health alliances" would bargain with insurers and groups of doctors and hospitals on behalf of hundreds of thousands of consumers and employers, giving buyers of health care more clout.

While this might help control costs, many health policy experts predict it will lead to the creation of more arrangements like health maintenance organizations, known as HMOs, which restrict choice of doctors and hospitals.

Administration officials nevertheless insist people will have a choice of plans and flexibility to change plans as often as once a year. The array of plans might include "fee-for-service" arrangements, common today, in which consumers can pick their doctors and hospitals. But they would cost more.

Controlling costs

The health alliances are the heart of the administration's plan for controlling costs. But it's going to take time to organize them.

To control costs in the meantime, the administration is mulling a variety of limits on insurance premiums, hospitals and prescription drugs. Though some task force experts favor mandatory controls, congressional and industry opposition to them has led the president to focus instead on voluntary measures.

The latest plan for drugs, for example, would pressure drug companies to sign agreements restricting price increases to the Consumer Price Index. Insurance companies would be pressured to hold down premium increases, which could have a dampening effect on hospital and doctor charges.

Another idea is a national health care budget, apportioned state by state and adjusted annually. But states are opposed to a limit on health care spending because they would have to comply or risk federal sanctions.

One of the most controversial cost problems concerns medical malpractice. Many doctors pay huge malpractice insurance premiums, even if they haven't been sued. And to protect themselves legally they often practice defensive medicine, over-prescribing expensive tests.

In what would be a bold step, the administration reportedly is considering rewriting laws to exempt doctors and hospitals from suits. Instead, the health plans that contract with doctors and hospitals would be responsible. This would reduce the number of potential defendants in a case -- which often include a number of doctors and a hospital -- to just one and trim legal costs and damage awards, supporters argue.

Elderly, poor and veterans

The administration is anxious to include the entire population in health reform. That way, everyone would get the same benefits, be affected by the same cost controls and be asked to chip in toward the costs of reform.

Hence, Mr. Magaziner says the administration will recommend phasing out Medicaid as a separate program for the poor and folding workers' compensation and medical-related automobile insurance coverage into the reform plan.

Task force officials would like to fold in Medicare as well. But the elderly, a potent political force, are reluctant to exchange what they have for something unknown. When the New York Times leaked word of these plans Tuesday, Mr. Magaziner beat a retreat. "Medicare as it exists now will continue," he said.

Well, sort of. Mr. Magaziner acknowledged that the White House wanted to give states freedom to move people from Medicare into new systems so that "eventually it integrates together." But, he added, "in no way are people going to be forced to do that."

Less confusing, by comparison, is the future of hospitals run by the Department of Veterans Affairs. They would continue to treat veterans with service-related problems under the White House's plan. Mr. Magaziner said they also would be permitted to organize themselves into health plans and compete for the business of veterans who get their care outside the VA system.

Timetable

With the possible exception of Mr. Clinton, no one expects Congress to enact comprehensive reform before next year. It's just too complicated. And once Congress acts, the full effects of reform wouldn't be felt for years.

But in a first step, the White House is likely to push for drug price controls this year to build political support for more controversial changes and for higher taxes.

Residents of reform-minded states such as Maryland may benefit sooner as these states try on their own to broaden coverage and eliminate insurance inequities, such as termination of the policies of unhealthy people.

Whatever Mr. Clinton proposes, Americans are going to pay close attention, predicts Mr. Blendon, the Harvard professor who tracks public attitudes toward health reform. Voters have high hopes for health reform, he says. "They sort of believe the Clintons are going to do the right thing."

THE CLINTON HEALTH CARE REFORM PLAN

WHAT'S IN

* Coverage for prescription drugs, mental health services and long-term care for the elderly and terminally ill.

* Voluntary price controls on drugs, doctors and hospitals.

* Tobacco taxes.

* Employer responsibility for paying the bulk of workers' insurance costs.

* A payroll tax on employers and employees.

* Abortion coverage.

* "Health alliances" -- large consumer organizations that bargain with insurance companies for low-cost coverage.

* State flexibility on controlling costs and delivering health care.

WHAT'S OUT

* A national sales levy or value added tax.

* A beer tax.

* Mandatory price controls.

* Congressional action in 1993.

WHAT'S UP IN THE AIR

* How long it will take to guarantee all Americans access to health insurance.

* Consumers' freedom to keep their present doctors.

* Insurance coverage of alternative therapies, such as acupuncture.

* Regulation of insurance premiums.

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