Clinton's Plans for Health, Taxes Pay Dividends for Working Poor

But small-business interests say the price of insurance will be jobs

SO far, the voters benefiting most directly from the Clinton presidency are working people with modest incomes.

These are the people who generally are considered to have fared worst from the mid-1970s through the 1980s as wages stagnated and the tax burden shifted down the income scale.

The working poor won a major increase in the Earned Income Tax Credit in the 1994 budget, about the only new windfall for anyone in federal spending.

A larger group of people who tend to work for small-business employers at modest wages and without health insurance are the clearest beneficiaries of the Clinton health plan's guarantee of universal coverage.

Under the plan, everyone would carry a generous health-insurance policy, regardless of income, employment, or health status. This offers financial security across the spectrum, but especially to the uninsured.

Among the 37 million now uninsured at any given time, 54 percent belong to families with incomes of less than $20,000. Many of those families, as long as their incomes are below 150 percent of the poverty level, would receive federal subsidies to help pay their 20 percent share of their insurance premiums. For the unemployed, the government would subsidize far more of the premium.

But this largess is not an unmixed blessing for people in marginal jobs.

Republicans and small-business interests are arguing that some workers will find themselves winning insurance at the cost of their jobs.

``These are the people who will be most affected by the job-juggling that will go on around this proposal,'' says Vince Breglio, a Republican strategist and pollster who has interviewed uninsured workers in focus groups.

The Clinton plan would require all employers to pay 80 percent of their employees' health-insurance premiums, though small-business employers with low average wages would receive subsidies. Even so, a study conducted by the Employment Policies Institute, an advocacy research group for business, found that in the restaurant business paying for health insurance would raise labor costs by 19 percent.

In retail, construction, and agriculture industries, as well as the restaurant industry, many employers argue that health-care premiums would drive them out of business or cause them to cut back on their employment rolls.

Uninsured workers, themselves, are enthusiastic about receiving secure, universal insurance coverage, but are also very conscious of the threat to their jobs, Mr. Breglio says. In a focus-group discussion last week, men running very small construction crews said they would be out of business if mandated to pay for health insurance, he says. Employees in the group said they had heard similar warnings from their own employers.

Even when the uninsured become insured and keep their jobs, their costs will go up. The uninsured, after all, are not without health care, much of it given to them free at clinics and hospitals. These facilities generally shift the cost onto bills of paying customers. Under the Clinton plan, the uninsured would get more and better care, but also pay more.

``There's going to be a redistribution of income from the uninsured to the insured,'' says Ted Marmor, who teaches public policy at Yale University.

Yet, despite these caveats, the arithmetic of the Clinton proposal still works in favor of families of modest means under all but the most pessimistic scenarios.

These families appear to be paying close attention. White House aides note that families on tight budgets tend to become more informed consumers of health plans than more educated and affluent families, in spite of the daunting complexity of the subject.

Health and Human Services Secretary Donna Shalala said at a Monitor breakfast last week that her own working-class family and her sister and brother-in-law on a North Dakota farm are much more conscious of the details of deductibles, co-payments, and limitations in their health plans than many upper-middle-class people she knows.

For the poorest working families - those earning little more than minimum wage - the Clinton budget that formally took effect Friday will increase their family income through an expanded tax credit. By 1996, the credit will increase their incomes as much as 16 percent over current levels, paying as much as $3,370 a year.

The proportion of families having at least one nearly full-time worker still below the poverty level grew 23 percent between 1975 and 1990. The share of married-couple families who are working poor declined 7 percent from 1985 to 1990, but the poverty rate of working women heading families grew, according to census figures.