Health Plan Delayed Until September : Medicine: First Lady says the proposal will be unveiled after Congress passes a budget. She says the package will include a tax on ‘luxury’ benefits.

The White House will delay introducing its massive health care reform plan until early September so that Congress can concentrate on passing President Clinton’s budget before the August recess, Hillary Rodham Clinton told House Democrats Wednesday.

The First Lady also confirmed in separate remarks to a Washington think tank that the Administration would seek to tax as extra income any health benefits in excess of the standard medical insurance plan being designed by the federal government.

Such a tax has long been under consideration by the White House Task Force on Health Care Reform, but Mrs. Clinton’s remarks Wednesday afternoon to the Center for Strategic and International Studies provided the first confirmation that the Administration indeed will ask Congress to levy such a tax.

The rationale for a health benefits “luxury” tax is to discourage the proliferation of expensive plans that would continue to drive up medical costs. At the same time, Administration planners believe such a tax also would encourage cost consciousness on the part of consumers.

The Administration’s decision to delay the introduction of its health care reform package all but ensures that no legislation can be enacted this year and perhaps not until well into 1994--an election year in which office seekers may be loath to vote for a complex piece of legislation that would require significant tax increases and spark attacks from doctors, hospitals, insurers, drug makers, small businesses and possibly even labor unions.

News of the delay disappointed many advocates of health care reform, while others privately expressed hope that the Administration will use the extra time to develop an effective strategy for selling the plan to what may be a skeptical and reluctant public.

“I think they underestimated how easy it would be to put together (a marketing plan),” said Rep. Jim McDermott (D-Wash.).

“This gives them some time to organize themselves and prevent this whole thing from being sort of lost in all the rest of what’s going on here,” added McDermott, who led a delegation of House Democrats in the Wednesday morning meeting with Mrs. Clinton.

The First Lady disclosed the latest Administration timetable during the 90-minute meeting, which was attended by more than 30 advocates of a single-payer, Canadian-style system in which the government is the sole source of health care funding.

Several congressmen said afterward that Mrs. Clinton told them the President intends to make the key decisions on his health care proposals by the end of July, after returning from an economic summit in Tokyo and a brief vacation in Hawaii.

According to McDermott, the First Lady said: “We’ve decided that we don’t want to get out there as long as (the budget bill) is still on the floor, and we will try and get all the decisions made (in July). . . . Then we will, when (Congress is) on recess, work hard to get the bill put together so that we’re ready to go . . . in September with a full court press.”

The President’s senior advisers have told him that as many as nine months of debate may be required before a consensus is reached on the details of health care reform.

On Capitol Hill later in the day, when she was asked by reporters about the Administration’s decision to delay unveiling its health care plan, Mrs. Clinton said that its introduction will depend on congressional approval of the budget, which is expected in late July.

“We’re waiting for (the budget) reconciliation to be over. If reconciliation is over next week, we’re ready. If it takes a few more weeks, we’re ready,” she said.

“We expect this will be a rough ride,” said Ira Magaziner, the top White House health policy staffer.

Despite the decision to delay sending health care legislation to Congress until September, informed sources said Wednesday that Clinton still may deliver a health care speech in late July, articulating “a statement of principles.”

But many health policy analysts said it would be futile to try to launch a health care debate in August, when Congress is in recess and much of official Washington takes a vacation.

“Most people don’t pay much attention to things that even serious people say in August,” said Edward F. Howard, executive vice president of the Alliance for Health Reform, a nonpartisan research and education group.

“In some ways, it makes a lot of sense to wait and do it with the appropriate fanfare and background briefings and give members (of Congress) and organizations time to mobilize,” Howard said.

President Clinton also addressed the question of timing of health care reform during a press conference last Thursday, saying that he believes “there’s a real shot we can act on it this year,” even if the plan is delayed “until the economic plan and the budget is in place.”

But Clinton also conceded the strong possibility that Congress may not act until 1994, although he added: “That wouldn’t be the worst thing in the world, except I hope and believe that the plan will pass before all that political season starts.”

Bruce Fried, a Washington health care lobbyist and former Clinton campaign adviser, argued that members of Congress will be under additional pressure to enact health care reform in 1994 precisely because it is an election year.

“I think it’s not only doable but, if handled properly, it’s the kind of issue that is required to be enacted,” he said. “What individual thinking of reelection would not want to demonstrate his or her effectiveness on addressing the nation’s health care crisis?”