Democrats Plan Bill to Hike Tobacco Tax : Health: House and Senate members hope to use the added revenue to pay for universal medical coverage.

House and Senate Democrats, on a day of notably heavy lobbying on health care reform, announced plans Tuesday to introduce legislation to sharply increase taxes on tobacco products to help pay for universal health care.

Democrats are to unveil their proposal today at a news conference by Sen. Bill Bradley (D-N.J.) and Rep. Michael A. Andrews (D-Tex.).

Congressional staffers would not reveal the size of the tax or the amount of money it is expected to raise. But Congress’ Joint Committee on Taxation has estimated that $35 billion could be raised in new revenues each year if the tobacco tax is doubled to 48 cents a pack. Some estimates have placed the cost of universal care at more than $90 billion annually.

President Clinton said last week that levies on cigarettes may be appropriate because of the high cost of health problems caused by smoking. Although Clinton avoided mentioning increases in taxes on alcoholic beverages, First Lady Hillary Rodham Clinton, who is heading the President’s Task Force on National Health Care Reform, did not rule out such increases Tuesday, saying: “We are looking at all options.”

Word of the Democratic proposal came as Mrs. Clinton met with black and Latino members of Congress to discuss health care coverage, and two powerful medical industry lobbying groups announced their opposition to possible elements of the reform package.

In a letter published Tuesday by the Journal of the American Medical Assn., leaders of the physicians’ group declared that their members should not bear the brunt of containing medical costs and warned the President that such proposals would harm the medical system in the long term.

The letter stated that, although doctors agree that health care reform is needed, it should include “shared sacrifice” and be developed by the government, physicians and patients.

“Limiting expenditures may produce immediate savings, but it runs the risk of causing long-term unintended consequences, such as limiting patient choice of physician, decreasing physician incentive, demoralizing researchers and disillusioning young medical students,” said the letter signed by John Clowe, president of the physicians’ group.

The Pharmaceutical Manufacturers Assn. spent more than $500,000 on newspaper advertising in 40 cities, defending the industry against Clinton’s recent criticism of soaring drug prices. The full-page advertisement claimed that, although total health care costs “have grown to 14% of the gross national product, pharmaceuticals have remained consistently below 1% of GNP for decades.”

Mrs. Clinton’s visit to Capitol Hill was the latest in her campaign to win support for health care reform. In separate meetings with Latino and black members of Congress, Mrs. Clinton was urged to develop a health care plan that meets the needs of their communities, such as treatment for drug addiction and medical care for illegal immigrants.

“What I heard today is particularly important, because both the black caucus and the Hispanic caucus have a disproportionate representation in their constituencies of people who are underserved right now in their communities,” the First Lady said, adding that statistics “for populations in rural areas and inner-city areas clearly demonstrate that we are not doing as good a job as we should be doing--providing excellent, quality, affordable care right now.”

Members of both caucuses said afterward that their members stressed the need for the Administration to include them in the decision-making process as the plan is being developed.

“We are not trying to tell her what to do,” said Rep. Kweisi Mfume (D-Md.), chairman of the Congressional Black Caucus. “We are saying: ‘As you do what you do, take into consideration our concerns.’ ” He said that, although the Administration hopes to present its plan as it ends its first 100 days in office, the deadline will not be met unless Saturdays, Sundays and holidays are omitted from the calculation.

Among the concerns expressed by the caucus, another member said, is the acknowledgment that rural and urban health care needs are strikingly different.

“When you talk about ‘managed competition,’ there is not sufficient competition (in rural areas) to manage for managed competition to work effectively,” said Rep. Melvin Watt (D-N.C.).

Managed competition is a major element of the reform package being considered by the task force. In theory, it will hold down health costs by enabling large blocks of people to pool their purchasing power and shop among competing health providers. That approach, however, would be less effective in rural areas where there is little competition among providers.

Rep. Charles B. Rangel (D-N.Y.) said he pressed for greater attention to the problems created by drug abuse--from the babies who are born addicted to drugs because of their mothers’ drug use to the emergency room care that is required because of drug-related violence.

Rep. Jose Serrano, (D-N.Y.), chairman of the Congressional Hispanic Caucus, said one of the primary issues raised by Latino members is the need to develop a health care policy for illegal immigrants.

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