
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, May 27, 1993                   TAG: 9305270166
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A7   EDITION: METRO 
SOURCE: From the Los Angeles Times and The Washington Post
DATELINE: WASHINGTON                                LENGTH: Medium

WHITE HOUSE WON'T CLAIM SHORT-RUN HEALTH SAVINGS

The White House, bowing to the conclusions of government number-crunchers, will not formally claim any short-term budget savings from the health-care reform package President Clinton plans to present to Congress next month, officials said Wednesday.

Throughout his campaign and into the early weeks of his administration, Clinton repeatedly insisted that the "managed competition" system he hopes to put into place would save billions of dollars. But budget experts working on the health package have refused to endorse any cost-saving projections, saying they cannot prove health-care reform will save money because it has never been tried before.

Although administration policy experts insist the actuaries are wrong and that the new system will save money, they agree they cannot argue the point without risking the credibility of the entire package.

"We're going to put forward the most conservative projections," said one senior White House aide. "That means we'll overstate the costs and understate revenues."

The result almost certainly will be to push Clinton toward a larger tax package to pay for health-care reform because he will not be able to use projected savings to cover the cost of the plan. In addition, the decision may increase pressure on the administration to put into place some form of short-term price controls to restrain health-care spending while a new system is phased in.

Some of Clinton's health-care advisers say the only general tax necessary to finance health coverage for 37 million uninsured Americans may be a tax on cigarettes.

Most of the money needed, they argue, could be obtained by requiring all employers to pay for a percentage of their employees' health coverage. Much of the rest could come from redirecting money now paid by the federal government, employers and individuals to compensate hospitals for treating people who cannot pay their own bills and do not qualify for Medicaid or Medicare.

For four months, the President's Task Force on Health Care Reform has studied a wide range of taxes to pay for the uninsured, including a value-added tax; taxes on insurance premiums, health benefits and corporations; and "sin taxes" on alcohol, tobacco, guns and ammunition.

Wednesday, a high-ranking administration official described the amount needed "as minor, a cigarette tax." The cigarette tax, the official said, would be used to finance promised coverage of some long-term care and pharmaceutical coverage.

by CNB