Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, May 5, 1994 TAG: 9405050161
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: Knight-Ridder/Tribune
DATELINE: WASHINGTON LENGTH: Medium
Rep. Jim Cooper's bipartisan plan is so underfunded it "could result in an upward spiral of health insurance premiums, declines in health insurance coverage, and, potentially, the collapse of the ... system," said the nonpartisan budget office in a report to the Senate Finance Committee.
The report threw a roadblock in the path of what has been seen as a credible, politically moderate alternative to Clinton's plan.
Cooper, a Tennessee Democrat, issued a statement playing down the impact of the budget office's conclusions, but White House supporters scarcely could conceal their satisfaction.
"[The Congressional Budget Office] clearly points out that the basic structure of the bill is unworkable," said Senate Majority Leader George Mitchell, D-Maine, a key administration ally.
Sen. John Breaux, D-La., a leading Senate co-sponsor of the Cooper bill, pledged to correct the financing problems with a combination of tax increases and cuts in benefits. And he questioned the reliability of the budget office's predictions.
"Trying to get a hold on some of these estimates is like grabbing Jell-O," said Breaux.
Despite the criticism, the budget office has a reputation for evenhandedness and independence. Congress relies on the agency to assess the cost of every piece of legislation and offer advice on major budgetary and economic issues.
The Cooper bill would require all employers to offer, but not pay for, health coverage. People in companies with fewer than 100 employees - about 56 million workers - would have to get coverage through new purchasing co-ops. Government would pay premiums for the poor. A standard benefits package would be established by a national commission. People with richer benefits would have to pay income taxes on part of the value of their plans.
Cooper's plan has long been a favorite of small business, since it would not require employers to pay. The Business Roundtable, an organization of top executives of major companies, gave it a qualified endorsement.
Budget office Director Robert Reischauer told the Senate panel Cooper's bill would not be as effective as Clinton's in holding down national health spending. The report said it could add $301 billion to the deficit over a nine-year period.
However, Reischauer said the Cooper plan - if adequately financed - would reduce the number of uninsured from 39 million (15 percent of the population) to 24 million (9 percent of Americans) without forcing employers to pay for coverage.
Here's why Reischauer says there could be a problem:
If the government lacks funds to cover health plans for the poor, private insurance plans would be required to come up with the money. They would have to raise premiums and cut payments to hospitals and doctors. Healthy people would balk at the higher premiums and drop their coverage, eventually undermining the insurance co-ops.
by CNB