Clinton Plans to Meld Workers’ Comp, Auto Insurance Into Health Care System

The Clinton Administration plans to merge workers’ compensation and the medical components of car and business liability insurance into a revamped national health care system being designed by the White House, Hillary Rodham Clinton said Friday.

The First Lady did not provide details of how a restructured workers’ compensation program would work.

But the goal is to allow all workers to use the same health care system whether they are injured on the job, in a car accident or at home--or when they simply fall ill, according to Administration sources and working papers of the White House Task Force on National Health Care Reform. In effect, the plan would achieve “around-the-clock” health coverage under one system.

Mrs. Clinton disclosed the plan at a press conference here after meeting with more than 100 chief executives of the nation’s largest companies, many of whom are skeptical about the Administration’s health care reform initiative, especially because it is likely to require tax increases.

“For the vast majority of businesses, health care reform will be a net winner,” she said. “Their costs will stabilize and go down. For many small businesses, the same will be true because we intend to move to incorporate workers’ compensation and auto insurance health care coverage into comprehensive health care reform.”

Workers’ compensation is an increasingly costly, state-based insurance system that provides workers injured on the job with free health care and disability benefits in exchange for forfeiting the right to sue employers. In California, the program has become a $10-billion-a-year business.

Because such programs lack meaningful cost control mechanisms, the Administration believes that they must be incorporated into the new health care system as a part of the larger, national effort to control medical spending and cut administrative red tape, according to sources and analysts.

Merging the coverage also is expected to save money by consolidating administrative tasks and eliminating the legal expenses involved when a dispute arises over where an injury occurred or what caused it.

In California, however, those distinctions still would have to be made because the state requires that victims of on-the-job illness or injury be given a certain level of care, said Jeff Shelton, insurance consultant to the state Senate’s Committee on Industrial Relations. If the federal task force offers a basic, no-frills health plan for all Americans, it may fall short of what California guarantees injured workers, he said.

Moreover, California law forbids asking injured workers to make a co-payment for their care, which might also conflict with a federal plan, Shelton said.

Bill George, spokesman for the California Manufacturers Assn., found the idea “very intriguing.” He said studies have shown that care for identical injuries can be twice as expensive in a workers’ comp system as in an ordinary health plan.

Gov. Pete Wilson favors round-the-clock health coverage “in principle” and last year signed legislation to create a pilot program in four California counties that would allow employers to combine their workers’ comp care with their regular medical plan, said John Duncan, deputy director of the California Department of Industrial Relations.

However, Duncan added, “nothing on the national scene should hinder the real necessity for workers’ comp reform in California this year.”

The Legislature is considering bills that, among other things, would tighten standards for stress-related injuries and would allow injured workers to be treated through managed care facilities such as health maintenance organizations instead of strictly through doctors of their own choice.

Incorporating workers’ compensation and car and business liability insurance into an overall health care system derives from a proposal advanced a year ago by California Insurance Commissioner John Garamendi.

Mrs. Clinton’s appearance here capped a busy week of consultations that also included meetings with members of Congress and union and consumer groups.

The meeting came as the health care reform task force, which Mrs. Clinton chairs, is making final decisions on its proposals and recommendations for presentation to the President before the end of May.

“The President is absolutely adamant: He wants to be sure that the greatest number of Americans possible understand what is at stake. . . . It has to be explained well and clearly,” Mrs. Clinton said.

Chen reported from Williamsburg and Mulligan from Los Angeles.