Health Plan Won’t Seek Sweeping Tax : White House: Report details Clinton’s reform agenda. Aim is to curb costs by limiting insurers’ rate hikes. Only levy likely is one on cigarettes.

President Clinton’s health care reform plan “will not require any broad-based tax” and will aim to keep costs down by limiting insurance company rate increases and controlling the prices charged by drug companies, the White House said Tuesday.

In a 47-page “Health Care Update” distributed to Democratic members of Congress, the White House also stated flatly that Clinton will require all working Americans to carry health insurance and share the cost with their employers. “We’ll ask everyone to contribute,” the report said.

Although the document did not specifically say so, Administration sources have said that the so-called employer mandate would require businesses to pay at least 80% of a worker’s premiums, with employees responsible for the remainder. The document did not specify how the government would limit insurance company rate increases or control drug prices.

The only tax likely to be proposed to finance health care reform is a levy on cigarettes, probably $1 per pack, the sources said. In the last seven months, the Administration has looked at as many as 20 different taxes to finance health care reform but has rejected all of them but the cigarette tax for various reasons.

The President is expected to make the final decisions on the key elements of his reform agenda by mid-September and to introduce the plan shortly thereafter. Congressional action is not likely before next year, however, given the complexity of the issue and the legislation that will be needed to enact the plan.

Precisely how much the reforms will cost and whether the Administration’s plan for funding them are feasible will depend largely on decisions the President has yet to make: most notably how generous the benefits package will be and how quickly universal coverage would be phased in. Earlier this year, Administration analysts had estimated that the bill could be about $50 billion, with a large part of that paid from savings in the system.

The document being distributed on Capitol Hill Tuesday contained the most detailed explanation yet of the elements of the health care reform agenda.

Among the key elements:

* A “comprehensive” benefits package that guarantees lifetime coverage and covers such preventive services as regular checkups, immunizations and mammograms. The document says that the package will be “as comprehensive as those offered by most Fortune 500 companies” and include some prescription drug coverage and phased-in coverage for long-term care, starting with home- and community-based efforts.

* Greater consumer choice of doctors. “Today, most businesses dictate which health plan you can join and sometimes which doctors you can see. . . . That won’t happen under the Clinton plan,” the White House said. “No boss will be able to tell you what doctor to go to or what health plan to join.”

* “Discounts”--perhaps in the form of government subsidies--to help small business owners buy insurance for themselves and their employees. Low-wage earners and the self-employed may also receive subsidies.

* Special incentives to encourage doctors to work in under-served regions in both rural areas and inner cities.

The White House position paper confirmed that illegal immigrants will not be covered but added: “Undocumented residents who currently receive coverage under community-based programs and Medicaid will continue to do so.”

The document also said that the President’s plan will “slash” red tape and insurance paperwork, control costs, “take on” the insurance companies, impose stiffer criminal penalties on perpetrators of fraud and require parties in potential malpractice lawsuits to “try” alternative forms of dispute resolution before going to court.

The White House update, a copy of which was obtained by The Times, is intended to educate members of Congress on the complex issue of health care reform and to help them, in turn, convince their constituents of the need for change.

The document also provides a telling insight into how the Administration intends to go about selling Congress--and the public--on what will be the most ambitious legislative undertaking of the Clinton presidency.

The document contains numerous charts and graphics, a question-and-answer section, a glossary and even a “suggested” mini-speech.

It closes with a ringing defense of the controversial manner in which the Administration, led by First Lady Hillary Rodham Clinton, has gone about drawing up the proposals. Those deliberations, which involved a task force of more than 500 consultants and government experts, took place largely behind closed doors, although Administration analysts consulted widely with interested parties.

Noting that the task force has met with more than 1,150 groups in more than 1,500 meetings, the White House called it “the most open policy-making process in history.”

The White House document opens by stating: “The goal of the President’s health care plan is to make sure that Americans will never again lose their health coverage.” It then lists the plan’s three guiding principles as “security, savings and simplicity.”

In a critique of the current system, the White House document emphasizes the notion that there is little security even for those who now have insurance. “The Clinton plan will provide health care that’s always there,” the document states. And, it says, no citizens “will ever lose their insurance--whether they switch jobs, lose their job(s), get sick or start a small business.”

With 37 million Americans uninsured and health care costs accounting for more than 14% of the gross domestic product, the White House predicted that as many as one of four Americans in the next two years will find themselves without insurance and that, by the year 2000, $1 out of every $5 earned by Americans will be spent on health care.

Another section of the White House document is called “The Cost of Doing Nothing,” and asserts that inaction will “threaten the future security of every American family and business--and the long-term health of our economy.”

The document also details the plight of citizens around the country, many by name and hometown, and explains how they would benefit from health care reform.

Current plans call for the First Lady to conduct a series of town hall-like meetings with such people in the week before the President unveils his plan, most likely in a speech to a joint session of Congress, as a way to get the public focused on health care reform. The President is scheduled to deliver a major speech Monday on the topic at the National Governors Assn. meeting in Tulsa, Okla.

Under Clinton’s emerging proposals, most Americans--including small business employees and the self-employed--would be grouped into large purchasing alliances that act as their agents in purchasing health insurance, ultimately making available to them an array of plans from which to choose.

The White House document said that an annual government health care budget would be “merely a backdrop to ensure that costs don’t continue to spiral out of control,” adding that a budget will not lead to rationing. “That’s just another scare tactic from the people who profit from the status quo,” it states.

The paper also addresses head-on what the Administration fears may be a serious middle-class complaint about the President’s plan.

“Why should I pay to insure others?” the document asks. The answer:

“You’re already paying to insure others. And you’re doing it in the most expensive way possible. Because you’re paying for people when they go to the emergency room. When someone without insurance goes to the hospital, don’t think those costs disappear into thin air. Those costs are passed along to you and every consumer in higher premiums, $20 Tylenols at the hospital, and higher Medicaid and Medicare taxes in every state.”