Joint Job-Car-Home Health Liability Package Studied : Medicine: White House weighs plan to merge components to save administrative and legal costs.

The Clinton Administration is considering a plan to merge workers’ compensation and the health insurance components of auto and business liability coverage under a new federal health care system, according to White House documents obtained by The Times.

The proposal before the presidential Task Force on National Health Care Reform would allow workers to use the same health care system whether they were injured or became ill for any reason on the job, in their car or at home, sources said Friday.

Details of the proposal have not been worked out, and it is unclear whether the task force, chaired by Hillary Rodham Clinton, will ultimately recommend its adoption.

Merging the coverage into a single system would theoretically save money by consolidating administrative costs and eliminating the legal expenses involved when various insurers dispute responsibility for paying a medical bill. By placing the system under the federal government, the new insurance apparatus also would be more directly linked to Administration cost-control efforts.

Workers’ compensation is a state-regulated system under which insurance companies and employers provide workers injured on the job with free health care and disability benefits in exchange for forfeiting the right to sue employers. In California, for example, the annual cost of premiums and benefits totals about $11 billion a year--most of it paid for by the private sector.

In many states, such programs lack cost-control mechanisms. Some members of the health task force favor the proposal as a way to limit workers’ compensation outlays, as part of a larger national effort to reduce medical spending and cut administrative red tape, according to sources and analysts.

The plan to incorporate workers’ compensation and car and business liability insurance into an overall health care reform system stems from a broader proposal California Insurance Commissioner John Garamendi advanced a year ago in Sacramento.

In Washington, its major proponent within the White House task force, sources said, is Walter Zelman, who served until recently as Garamendi’s deputy for health insurance and consumer protection issues.

Zelman could not be reached for comment Friday, but another White House official confirmed that the proposal is still “on the table” as the task force approaches the halfway point in drafting legislation to overhaul the nation’s health care system. Both the President and Mrs. Clinton have vowed to unveil that plan by May 21.

Garamendi’s plan would have provided around-the-clock coverage to all Californians by combining traditional health insurance with the medical components of workers compensation and automobile and business liability insurance.

It would have left intact payments to disabled workers as compensation for lost wages. But it proposed to break off from the workers’ compensation system reimbursement to doctors and hospitals for care they provided to injured workers.

“Consolidation of the health care portion of worker compensation and auto insurance would reduce coverage costs to employers and employees, as well as reduce the administrative costs necessary to determine who pays when a claimant is sick or injured,” Garamendi said at the time.

His proposal won widespread praise in California and around the country, including from consumer, labor, religious and business groups. But Garamendi did not try to push his entire package through the California Legislature because he lacked the votes to win passage.

He did succeed in having the Legislature pass a bill that would have created a commission to begin the planning necessary to implement his program. But Gov. Pete Wilson vetoed it.

As Mrs. Clinton’s task force weighs options, it is approaching the time when it must make a series of critical decisions, including which taxes to raise, and by how much, in order to finance the reforms.

Among the likely tax increases are higher levies on tobacco, alcohol, guns and ammunition. In addition, the task force is discussing higher taxes on the receipts of doctors and hospitals and a cap on insurance premiums. The group also is said to be seriously considering a short-term wage and price freeze on all health care providers.

Analysts working for the health care task force have estimated that it could cost $90 billion or more a year to extend health coverage to the estimated 37 million uninsured Americans--a key Clinton pledge throughout his 1992 campaign.

Chen reported from Washington and Weintraub from Sacramento.