Big Price Tag for Insurance Plan Scored : Health: Sullivan says the Pepper Commission’s $66-billion proposal could hurt businesses. The panel urges mandatory medical coverage for all workers.

A congressional commission’s plan for mandatory health insurance for all workers was attacked Monday by Health and Human Services Secretary Louis W. Sullivan, who said it would cause small businesses “to go under, with the loss of jobs.”

Sullivan, delivering the Bush Administration’s first formal response to the $66-billion program proposed last week by the Pepper Commission, said the Administration is worried about any health reform program “if the cost to the business community is too great.”

The commission plan calls for free insurance for pregnant women and children up to 6 in poor families, 90 free days of nursing home care and government paid home care for the severely disabled. All firms with 100 or more workers would be required to offer health insurance to their employees or pay into a public plan for the uninsured. Smaller companies would be offered tax credits and subsidies to encourage them to purchase insurance for their workers. After five years, any remaining uninsured workers would be covered by the public plan.

It “is a very expensive program,” said Sullivan, testifying before the House Aging Committee.

He said congressional enactment of the commission proposal could result in a “catastrophic outcome,” a reference to the controversial expansion of Medicare repealed by Congress last year. Taxpayers over the age of 65 revolted against a special surtax, which would have financed extended free hospital care, placed a ceiling on doctor bills and paid part of the cost of prescription drugs.

The Bush Administration is determined to fight any new program that requires higher taxes. An expansion of health insurance to cover 37 million Americans now lacking coverage would require expanded yearly outlays of $66 billion for the federal government and $20 billion for business.

“We need to develop a program that is not only effective at delivering services but is mindful of costs,” Sullivan said. The United States spends more than any other nation for health care, $2,200 for every American, compared with $1,400 for each resident of Canada, the second biggest spender. “Simply (spending dollars) will not provide us with the best health,” Sullivan said. “If it did, we would be the healthiest nation in the world and we’re not.”

The United States is surpassed by a number of countries in general measures of health such as life expectancy and infant mortality.

Despite prodding from the committee chairman, Rep. Edward R. Roybal (D-Los Angeles), and other members, Sullivan refused to offer an Administration alternative to the Pepper Commission plan for mandatory insurance coverage for business. The commission is named for its first chairman, the late Rep. Claude Pepper (D-Fla.).

Two separate health reform studies are under way by the Administration, with the results going to the Cabinet domestic policy council, which is expected to prepare recommendations in the fall, the HHS secretary told Roybal.

The Administration agrees that uninsured Americans should be offered protection against high medical bills, Sullivan said, but is worried about the added burden for business.

The repeal of the catastrophic care expansion of Medicare shows that “good intentions can have unintended consequences, particularly if they carry a high price tag,” he said. “We do not want another catastrophic outcome on our hands, and my concern is that the almost $100-billion price tag on the Pepper Commission proposals, involving public and private costs, could result in just that.”

However, committee chairman Roybal said Congress should use the Pepper Commission plan as the basis for health care reform.

Addressing a separate issue, Sullivan, whose department also administers the Social Security system, brushed aside suggestions to reduce Social Security taxes, a proposal offered by Sen. Daniel P. Moynihan (D-N.Y.).

“Social Security is certainly not broken and it does not need ‘fixing,’ either by undermining the financial condition of the trust funds or by making ill-advised changes in the structure of the Social Security Administration,” Sullivan said.