A Preview of Clinton's Health-Reform Plan

FROM seeing a health provider all the way to paying the insurance bill, Americans would be asked to make huge changes under President Clinton's health-reform plan, according to a draft of the proposal.

The tightly held plan, due for official release Sept. 22, slipped out of the administration's grasp Friday after authorized copies were delivered to members of a congressional health subcommittee.

Despite the massive leak, the president was still planning to officially unveil the plan next Wednesday evening, a White House spokesman said.

But an economic adviser to the president cautioned that anything in the draft could change before next week. Also, Congress is expected to do battle over the plan, and may substantially rework it before approval.

Hillary Rodham Clinton, in a Friday speech to state legislators, said she is open to constructive suggestions. ``What we are not open to is a stand-pat, negative, nay-saying opposition,'' she said.

Under the plan, all Americans would have health coverage by 1997, even if they are self-employed, work part time or are unemployed. In exchange for less choice, many people would be eligible to receive a richer basic- benefits package for less money.

The plan's goal is to pull down spiraling health-care spending, increasing at 9 percent annually. The White House wants to reduce growth to 4 percent by 2000.

To reach that goal, the administration would impose ``price discipline,'' Mrs. Clinton said. After the plan is introduced, the administration would ask insurers, drug companies, hospitals, and doctors to voluntarily hold down prices.

``Then we would have an overall budget as a cap over the private sector that won't be invoked if the market works the way we believe it should,'' Mrs. Clinton said.

The heavy government regulation in the plan seems to have caught many by surprise, but interest groups have already launched loud protests.

The Health Insurance Association of America and the White House were at odds last week over the proposal to limit premium increases.

``Let's get one thing straight,'' a White House memo said. ``They're worried about protecting their profits.''

The financing of the $700 billion plan is still sketchy. The administration is considering increasing cigarette taxes and Medicare premiums for the wealthy while trimming Medicare spending.

Under the proposal, most full-time employees would chip in 20 percent of the cost of a basic plan. The administration estimates that with competitive market forces in place, the premium for a basic plan could cost on average $1,800 a year for an individual and $4,200 for a family.

The other 80 percent would be picked up by employers, with federal subsidies provided for some small employers. Business is fiercely opposed to this requirement.

They need not protest, Mrs. Clinton says. The amount paid by employers, she promises, would be capped ``significantly below what the average employer pays now.''

The basic plan would cover, in addition to hospital and outpatient benefits, many services such as dental care for those under 18, mammograms, cholesterol screening, 30 days of outpatient mental-health care, and extensive hospice care.

The plan says it would provide ``pregnancy-related services,'' leaving the politically charged question of abortion coverage to be hashed out by Congress.

More generous plans would still be allowed, but employees would have to pay taxes on benefits provided beyond those in the basic package.

Most people, instead of choosing coverage through an insurance company, would go through their ``regional health alliance.'' Representatives of the alliances - which would include almost everyone within a given geographic area - would choose the most cost-effective packages. One of the packages would have to be a health-maintenance organization and one, a fee-for-service, which offers complete choice of physician.

The large pools of people would have clout when purchasing health care. This concept is the backbone of the administration's proposal: Market competition will drive down the price of care, with a little help from the feds.

The system has already worked in Florida, Mrs. Clinton says, where bids from health plans came in much lower than expected for a competitive system.

New regulations would not permit health plans to inflate the premiums of people who are sick or considered high-risk. All those of similar family status in an alliance would be charged the same, called community rating. An alliance with a high proportion of high-cost patients would be able to adjust the plans' costs using a federal formula.

Businesses with 5,000 or more workers could continue to provide their own insurance packages, but must begin paying taxes on them. Currently these corporations are exempt from such taxation. These businesses also would have to begin using community ratings within the company. Although politically popular, community rating has not gone over well with many large companies.

If states want to opt out of the national system, they could implement single-payer systems in which the state is the only coverage purchaser.

The administration would abolish the health system for federal employees and Medicaid, the health program for the poor.

Medicare, the health system for the elderly, who are politically powerful, would continue as a separate system with pharmaceutical and long-term-care benefits added. But beneficiaries could drop out of Medicare and join a health alliance.

A seven-member National Health Board would determine and enforce the overall health budget.

State boards would set up the regional alliances, certify the health plans, and regulate providers.

To help pay for the plan, at least $124 billion would be cut from Medicare through the year 2000. Some reports last week put this figure at $238 billion.

Doctors and senior citizens' groups protest this move.

Mrs. Clinton responds: ``We are not talking about cuts. We are talking about reducing the rate of growth to inflation plus population....''