Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, February 22, 1993 TAG: 9302220058
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: The Washington Post
DATELINE: WASHINGTON LENGTH: Long
CLINTON AIDES: HEALTH PLAN WON'T WORK
President Clinton's advisers have told him that it is virtually impossible to provide health care to all Americans any time soon if he wants to finance it by using savings from overhauling the system, as he promised in his campaign.Clinton could either delay universal coverage until 1997, after his term ends, or begin to provide it now and count on an increase in government spending of up to $175 billion over the next four years.
Even "if we win passage of our health reform plan" at the end of 1993, the plan "will generate savings no sooner than 1997," according to a confidential 83-page report by his health transition team. "Even limited expansions in coverage before 1997 would require new revenue."
Clinton said repeatedly during the campaign that his plan, which relies on a combination of government regulation and competition, could finance universal health care with the savings generated by comprehensive health care overhaul.
His transition team, however, told him at a meeting last month that it would cost $175 billion over the next four years to insure the 37 million Americans without coverage as the overhaul takes place. To avoid the additional cost, he could wait to provide universal coverage until 1997, when the changes are producing significant savings.
Another option, they said, is to use a combination of new government spending - about $105 billion over four years - and price controls to begin to cover the uninsured immediately, with everyone having coverage by 1997. Under this scenario, Clinton would have to get authority from Congress to "declare a national emergency and bring in across-the-board price controls" on private health care prices, the report states.
The report was prepared by 16 members of Clinton's health transition team and presented to him at a meeting in Little Rock, Ark., in mid-January. Since then, the report's major authors - Judith Feder, Atul Gawande and Kenneth Thorpe - have moved into top health positions at the Department of Health and Human Services to work on the health-care overhaul proposal Clinton plans to present to Congress in May.
Clinton aides have talked about new taxes to finance some of the costs. On Sunday, Office of Management and Budget director Leon Panetta expanded on his earlier suggestion of new taxes on alcohol and tobacco. Such taxes would not only raise revenue, they would discourage unhealthy behavior, he said.
Labor Secretary Robert Reich said Sunday on CNN's "Newsmaker Sunday" that business would reap two-thirds of the savings from any health-care overhaul. He said it is still an "open" question whether U.S. business should "bear any burden" for paying for increased access out of those savings.
Just how much savings could be generated in the short run from Clinton's health proposal was the source of considerable disagreement among his advisers during the campaign, and has continued to be contentious.
Some of Clinton's top advisers - notably senior White House adviser Ira Magaziner - were reportedly disappointed at the costs outlined in the transition's report. But a subsequent memorandum from Magaziner to members of the President's Task Force on National Health Care Reform showed that the team's original cost calculations have been generally accepted as a starting point for drafting legislation.
In that memorandum, dated Jan. 29, Magaziner stated "depending on definitions and program structure, universal access could mean $30 billion or $90 billion of additional annual expenditure by the government by 1997."
Clinton advisers pointed out that candidate Clinton purposefully never specified exactly when he believed universal access could be achieved. They point out that Clinton, who was comfortable and articulate in discussing health policy, offered far more details about his proposal than is normal during a campaign.
"They just said they would pay for it through savings, they didn't say how. That's finesse, that's what it is," said one adviser.
The promises made during the campaign were general rather than specific:
"The Clinton/Gore plan will tightly contain costs so that they rise no faster than wages, saving Americans $700 billion by the end of the decade. The plan will also guarantee coverage for all Americans," said a Sept. 24 campaign press release.
"We should require employers to cover their employees, and the government to cover all the non-employed in a program which requires people to pay in accord with their ability to pay," Clinton said the same day in his campaign's major health care speech at the pharmaceutical maker, Merck & Co. in New Jersey. "This is a private system. . . . It does not require new taxes."
Health-care reform was a cornerstone of Clinton's campaign. He argued then, and now, that revitalizing the national economy cannot be achieved unless some of the $930 billion spent in the United States each year on health care can be redirected into more productive uses. Cost control is also crucial to harnessing the federal deficit, Clinton has said. Federal spending on health care, principally Medicare and Medicaid, is expected to account for 50 percent of the increase in the federal deficit over the next four years.
But while he has indicated his strong desire to control health costs, covering the uninsured will be expensive. Most of the options laid out by Clinton's advisers recommend phasing in a mandate that employers provide coverage to their workers.
While such a mandate will take care of some of the uninsured - those with jobs - the government will have to cover the rest.
"It doesn't matter what you do to the health-care system, you'll never get the cost of insurance low enough so that you don't have to subsidize some people," said John Sheils, vice president of Lewin-VHI, a management consultant firm specializing in health care.