New health insurance to cost many families Higher premiums will be coming for 40 percent

WASHINGTON — WASHINGTON -- Forty percent of American families who now have health insurance -- at least 71 million people -- will pay higher premiums if President Clinton's health care proposal is enacted, the administration has estimated.

Health and Human Services Secretary Donna E. Shalala said in testimony before the Senate Finance Committee that most of those paying higher premiums, about 40 million people, would receive more generous health benefits in return.


But Finance Committee Chairman Daniel Patrick Moynihan, D-N.Y., warned her that higher costs, even for those receiving better coverage in return for their additional premium dollars, could be a hard sell.

"We're going to have to persuade some of those that they're going to get more and others that, on balance, it's their civic duty," he said, adding that the Congress has not been particularly successful in selling such concepts and failure to do so now could doom the reforms.


Senate Republican Leader Bob Dole, R-Kan., immediately pounced upon the new figures as evidence Mr. Clinton had oversold his plan.

"We need to stop all the hype," Mr. Dole said in a speech on the Senate floor. "This is going to upset people . . . because they have been led to believe, or a lot of people have, [that] everybody is going to be better off, it is not going to cost any more, we are going to get better benefits for it."

Contrary to Mr. Dole's comments, the administration has never claimed that everyone would see immediate savings from the plan. Indeed, the estimates Ms. Shalala provided yesterday were only slightly higher than figures quoted in earlier testimony by first lady Hillary Rodham Clinton.

However, coming only a day after Mr. Clinton introduced the 1,300-page plan in a splashy ceremony in the Capitol's Statuary Hall, some found the numbers jolting.

"For political purposes, it's a bit of a bombshell. It's at least a hand grenade," said a senior Democratic congressional aide.

Under her department's estimates, Ms. Shalala said that while 40 percent of families would pay more, 52 percent of families with insurance would pay less for premiums than they do now, and roughly 7 percent would pay the same.

The department also estimated that about 4.2 percent would pay more than $500 a year in additional premiums, 17.6 percent would pay between $250 and $500, while the insurance costs of 18.6 percent would rise by less than $250.

Ms. Shalala also conceded that the uninsured inevitably would pay more in premiums, because they pay none at all now. But she suggested that many might pay less for insurance than they do for medical care without it.


The administration had earlier estimated that the typical insurance payment would amount to $73 a month for a two-parent family with two children, $65 a month for single-parent families, $64 a month for a childless couple and $32 a month for single people.

Deputy HHS Secretary Ken Thorpe said the initial cost estimates did not take into account the ultimate savings that the administration expects its plan to yield.