Debate Flares on Who’s First in Health Plan : Medicine: White House advisers disagree. Some argue for low-income women and children. Others cite political pledge to help middle class.

A major rift has developed among White House health care advisers over which population group should receive guaranteed coverage first under a revamped health care system: low-income women and children or middle-class workers and their families, sources said Tuesday.

President Clinton is still determined to provide universal coverage, but with the cost of insuring 37 million additional Americans now put at $90 billion a year, the Administration has little choice but to gradually phase in such coverage one group at a time.

The resulting debate is exposing one of the most sensitive political nerves in the process of overhauling the health care system. Administration officials believe that the outcome holds important implications for both the President and the nation.

The Administration’s concern boils down to whether the reform agenda will be perceived as a real boost for the struggling middle class or just one more social welfare program for the poor, sources said.

Clinton’s health policy analysts argue that the needs of low-income women and children are paramount, saying that childhood immunizations and perinatal care are not only “the right thing to do” but will also avert treatments for low-birth-weight babies and other costly conditions often caused by neglect.

“Women and children shouldn’t be seen as a typical liberal move,” said one analyst. “An easy case can be made that the wisest application of new resources, and with biggest payoff, would be to go after this group.”

But other strategists warn that preferential treatment for needy women and children could render the President’s entire reform agenda vulnerable to political attack from conservatives and others, generating opposition on top of that expected from various health industry groups.

The middle class “may feel they are being neglected, that you are not doing things for working Americans,” added an Administration consultant. “Remember, helping people who are hurt by the economy was such a big theme that the President ran on.”

The internal debate also reflects the escalating tensions at the highest levels of the White House Task Force on National Health Care Reform as it begins the difficult task of narrowing the array of options now being presented to the President and Hillary Rodham Clinton, who chairs the task force. The President is expected to unveil his proposals in early May.

“There is discussion on whether specific populations should be singled out” for initial coverage,” Robert O. Boorstin, special assistant to the President for policy coordination and the task force’s chief spokesman, confirmed Tuesday. But he declined to elaborate, noting that the task force is “discussing all sorts of things.”

Essentially, sources said, the Administration debate boils down to a choice between requiring small businesses to provide health insurance--with assistance in the form of government subsidies--or providing government assistance to low-wage earners and poor people, especially women and children, who do not qualify for Medicaid.

A probable key element of Clinton’s reforms is a requirement for all companies to provide health insurance to employees, perhaps paying at least 75% of the cost, with the employees picking up the rest. This government mandate likely would be phased in for small businesses, with the government likely to provide government subsidies to help defray the costs.

On the other hand, there are millions of unemployed poor women with children who do not qualify for Medicaid, a state-federal program with varying criteria for qualification from state to state. They would immediately benefit from a Clinton decision to give them priority over uninsured workers when it comes to phasing in universal coverage.

Although many women working for small employers would benefit if businesses were required to provide health insurance, “there are many women and children who aren’t in the work force at all,” said Robert Blendon, a Harvard health policy analyst.

Of the estimated 37 million uninsured Americans, 62% are full-time workers and their dependents, according to Ed Howard, executive director of the Alliance for Health Reform, a Washington-based nonprofit educational organization.

The reform bandwagon got an added boost Tuesday when an Institute of Medicine expert panel warned that the nation’s employer-based health insurance system could soon “self-destruct without a major overhaul.”

The panel’s chairman, Princeton President Harold T. Shapiro, added: “Some system of mandatory or compulsory coverage is required.”

Also on Tuesday, a coalition of citizens representatives met with Vice President Al Gore, presenting him with nearly a million letters and postcards that advocate the adoption of a health care system modeled after Canada’s.