Pioneer Plan Offers Lessons

THIS is a model health-care plan that is going to be one of the finest things ever to happen to the people of this state," Washington Gov. Mike Lowry (D) tells voters in a town meeting. But, even though the reforms have already been signed into law, the statement is met with groans of "No" from the audience.

Scrambling to recover, Mr. Lowry says the Health Services Act means that people will not be denied insurance because of an existing health problem. The audience applauds.

The seeming ambivalence shows how much people want an upgraded system but how skeptical they are of government doing the job.

This state's experience with health-care reform also holds lessons for the other Washington, where President Clinton is preparing a public-relations blitz to sell a similar package of national reforms.

In May, Lowry and a Democratic-controlled state Legislature passed one of the nation's most radical health-insurance overhauls. The reforms, praised by the White House, fall under the "managed competition" label, in which insurers compete for clients but face more regulation than previously.

The law requires employers to insure all workers and sets up a commission to put a cap on premiums - two measures that members of the Clinton administration would like to see in the president's managed-competition plan when it is unveiled this fall. Plan created an outcry

Claiming a mandate on the issue from fall election victories, lawmakers here enacted the plan despite an outcry from businesses and insurers, who opposed the price cap and the requirement on all employers.

Although Mr. Clinton claims a similar mandate for reform and has a Democratic Congress, he appears to face a longer, tougher fight, says John O'Donnell, health-care-policy director at Buck Consultants, a New York City-based firm. Conservative Democrats and Republicans in Congress are leery of making insurance mandatory or tampering with market forces.

Yet one lesson Mr. O'Donnell draws from Washington State is that "you can't count anything out in politics." Clinton "may have staked his entire presidency on health reform, on his ability to get this program through.... What we're going to see is something very similar to a presidential campaign in terms of the media, the public advertising."

Clinton's plan is likely to offer a framework that states can experiment with and fine-tune.

O'Donnell, who opposes White House aims such as mandatory employer coverage and "global budgets" on the money each state spends on health care, worries that Clinton's campaign could create a groundswell of support by appealing to emotion more than reason. Reforms' future is uncertain

Another lesson from Washington State is that even if sweeping reforms are passed, their future is uncertain. The most visible groundswell of opinion here lately has been support for ballot initiatives that would roll back tax hikes, including ones to fund the health program.

Greg Tisdel, president of Tiz Door Sales Inc. in Everett, Wash., says lawmakers took too free a hand with their election "mandate," and now voters are calling them to account. He served with insurers, doctors, and big-firm executives on a task force to build a consensus on expanding health coverage to more people while controlling costs.

The task force proposed the concept of a basic benefits package all state residents would have to buy, but without employer mandates or price controls. The Legislature added these and expanded benefits to include coverage for chemical dependency, mental health, and long-term care.

"By the time I got to my car in the parking lot, they had already voted a different way than they said they were going to vote," Mr. Tisdel says of lawmakers whom he had lobbied.

He says the new law will push up the cost of insuring his 32 employees and their dependents to far more than the $99,000 a year he now spends on a package that includes most benefits the state will require. He won't know the exact number until a soon-to-be-appointed Health Services Commission puts the state benefits package into fine print and sets premium caps, but he predicts that the amount will be "very, very influential on my bottom line." Encourage prevention

Aaron Katz, director of the Health Policy Analysis Program at the University of Washington, says it is too early to tell if this bleak assessment will prove true. He notes that the reforms encourage insurers to compete to offer premiums below the maximum ones set by the state. The reforms also may focus doctors more on preventive medicine by shifting away from "fee-per-service" billing.

Tisdel, however, says it will be difficult for insurers to offer required benefits for less than what most businesses now pay.

Whoever is right, the issue is a crucial one. Polls show that the public's desire to expand health coverage has financial limits. Sixty-five percent of Americans are willing to pay higher premiums to guarantee every citizen access to health care, according to a survey conducted this spring by the Robert Wood Johnson Foundation. But only 40 percent are willing to see their monthly payments or taxes go up by as much as $30 for this purpose.

Washington State and the White House intend to offer some help to small businesses to help them cope with new financial burdens under mandated insurance. But Julia Porter, the governmental-affairs manager of the Association of Washington Businesses, says employers don't like the idea. In this state, for example, a business that can afford to pay health insurance might find itself paying taxes "to subsidize [its] competition," she notes.