Fixing the Reformers’ Math

As debate begins in earnest about reforming the nation’s unwieldy health care system, there is perhaps only one thing not in doubt. That is the ambitious resolve that Bill Clinton has demonstrated--especially as a first-term President without a clear supporting bloc in Congress--in daring to rethink and restructure an industry steeped in medical, legal and insurance special interests. Simply put, the President is likely to face no greater political challenge.

But bouquets wilt quickly, especially bouquets for political courage. What will matter in the long run is whether Clinton can make this mammoth undertaking work.

Essentially, Clinton proposes that the federal government set a basic standard for health insurance, meaning that every American would enjoy coverage for doctor and hospital bills, regardless of job status or pre-existing medical conditions.

Even with all the elements in perfect sync, 100 things could go wrong to prevent reform of the U.S. health care system; but surely not much will go right if the Administration plays fast and loose with the numbers. Before next week, when the President is to officially unveil his health care reform proposal, the crucial financing elements must add up better than they appear to at the moment.

Many experts are raising doubts about the few details provided so far on the financing of the plan.

Employers would pay 80% of health insurance premiums, not to exceed 7.9% of payroll, and employees would pay 20% of health insurance premiums, not to exceed 1.9% of his or her income. A sin tax on cigarettes and perhaps alcohol is expected to account for about one-quarter of the $441 billion of the plan’s estimated costs between 1994 and 2000. Already the Administration appears to be backing away from proposals to cut Medicare and Medicaid, in the face of strong opposition, much of it from Democrats in Congress. A possible 1% tax on large businesses on the value of self-funded health plans also is likely to prove unpopular with many Republicans.

But Clinton’s strategy--from deciding to tackle the health care issue in the first place to putting First Lady Hillary Rodham Clinton in charge of the reform--has been high-risk throughout, so now is no time to look for safe and easy ways to finance the new system. There aren’t any safe and easy ways, but surely ones that do add up.