States Scale Back Health-Care Reform

REMEMBER Harry and Louise? They were the worried couple, created for insurance-industry television advertisements, who helped stop President Clinton's health-care reform plans last year.

And their views -- favoring go-slow, incremental reforms rather than sweeping overhaul -- appear to be holding sway at the state level now, too.

Here in Washington State, the Legislature has just voted to repeal much of the health-care reform package it passed in 1993. That law, which closely resembles Mr. Clinton's plan, is the most far-reaching health-reform package any state has passed. Gov. Mike Lowry (D) is expected to endorse the repeal rather than face the ballot initiative that would surely follow a veto.

The retreat in Olympia symbolizes a regrouping on the health-care issue that is occurring in statehouses across the nation.

''Washington is not the only state that's been repealing'' or modifying health-care reforms, says Robert Helms, an economist at the American Enterprise Institute, a conservative think tank in Washington, D.C. Dr. Helms says the lesson of the Clinton-plan failure was that Americans do not want a heavy-handed government solution to the health-care problem.

For now, both the Republican-controlled Congress and the states seem focused on fine-tuning the existing health-care system and on controlling the costs of government programs such as Medicare and Medicaid.

Rather than aiming for ''universal coverage,'' states such as California and Florida are trying simply to expand the number of those covered. A popular approach nationwide is for states to make Medicaid, the joint federal/state program for the poor, more efficient so more people can enroll. Oregon is continuing its effort to make Medicaid available to all residents below the poverty line. Congress, meanwhile, is toying with the idea of turning Medicaid into a block grant to the states.

Tweaking private insurance rules is another topic at both federal and state levels -- to make insurance more portable from job to job, for example, or ensuring that no one is denied coverage because of a preexisting physical condition.

But the relative lull in health-care policy legislation, compared with last year's bill-writing frenzy, hardly means the issue is fading. With insurance costs still soaring beyond general inflation and millions of Americans lacking coverage at any given time, health care remains one of voters' top issues, polls say.

''In a year or two we're going to be back at the same point, ... where people are fuming mad about health care,'' say John Wyble, a lobbyist for Washington Citizen Action, a consumer group that opposes repeal of Washington State's reforms.

The bill awaiting Governor Lowry's signature would repeal:

*A cap on insurance premiums, modified yearly.

*A rule that all insurers must offer the same basic benefits.

*A mandate that all residents have health insurance by 1999.

*A requirement that employers offer health insurance for all workers and their families and pay half or more of the cost. Repeal of this provision is a mere formality at present, since the Republican-controlled Congress is unwilling to waive an existing ban on such rules.

*''Community-rated'' pricing, where insurers must charge the same rate to any client within a geographical region. This system effectively raises health costs for businesses, since working-age people generally have lower health costs than retirees.

Businesses in the state argue that 1993 reforms would raise their costs and wipe out jobs. Their ire, and that of the health-insurance industry, was a major force in last November's elections. The state's House of Representatives shifted into Republican hands, paving the way for the repeal legislation.

Large firms that have multistate operations have an added reason to be wary of sweeping reforms such as Washington's: These firms don't want to operate under a host of complex health-care reform acts in different states.