GOP Offers Rival Health Care Plan : Medicine: Senate Republicans’ proposal rejects cost controls, mandatory employer-paid benefits of Clinton package. Both sides see room for compromise.

In what may be the most politically significant alternative to the Clinton Administration’s health care reform plan, Senate Republicans unveiled their own version Wednesday--one that embraces many of the White House proposals but rejects some key ones, notably cost controls and mandatory employer-paid benefits.

Because it is virtually certain that both Democratic and Republican votes will be needed for Senate passage of a health care bill, the political calculus seems to indicate that the ultimate package--if one emerges from Congress--would lie somewhere between the Administration and GOP plans.

Republicans and Democrats--in dramatic contrast to their give-no-quarter partisan warfare over the President’s economic plan--expressed optimism that they can find areas of compromise between the Administration version, which Clinton will present in a prime-time address to Congress next week, and that of the Republicans.

“I am confident that what will ultimately emerge from this discussion is a bipartisan plan that will address the needs of the American people,” said Senate Minority Leader Bob Dole (R-Kan.).

His view was shared by White House health care spokesman Kevin Anderson, who said: “We are encouraged by the views we appear to share on many issues. . . . We believe there’s common ground here from which we can work to achieve health security for all Americans.”

However, despite the apparent willingness to work out differences, some of the disagreements are striking and speak to the heart of opposing Democratic and Republican philosophies.

The Clinton plan and that of the Senate Republicans have many aspects in common--including the central assumption that health care consumers, by joining together into large alliances, can spread risk and gain enough purchasing clout over health care suppliers to force them to rein in their prices.

In so doing, both plans reject the idea--espoused by many liberal Democrats in the House and Senate--of a Canadian-style “single-payer” plan, under which the government would pay the health care bills for all Americans.

But where the White House puts the burden for providing health care on employers, the Republican plan places it on individuals, who would be required to purchase health insurance in the same manner that most states require motorists to carry automobile insurance.

Individuals too poor to afford insurance would be issued government vouchers to help pay for it.

The GOP plan was put together by moderates led by Sen. John H. Chafee (R-R.I.), but it has received qualified expressions of support from some conservative Republicans. By Wednesday it had at least 22 co-sponsors, half the GOP membership of the Senate.

The Republican alternative also won cautious praise from a number of Senate Democrats, including Sen. Edward M. Kennedy of Massachusetts, who lauded it as “a major step forward” and evidence that “bipartisan cooperation is not only possible but probable in this all-important debate.”

To a large degree, the apparent willingness to try to put aside political differences reflects a sense on the part of both parties that there is a strong public outcry for a solution to the nation’s health care problems.

Politicians in Washington fear that voters will take out their anger on all sides if they fail to come up with a plan to bring soaring health care costs under control and provide medical care to the tens of millions of Americans who have no insurance or whose coverage is inadequate.

Both the Clinton and GOP plans would establish a single benefits package available to all purchasers of health insurance and scale back the favorable tax treatment given employers who provide richer medical benefits.

They also would seek to simplify the handling of medical claims, reform the medical malpractice liability system, emphasize preventive care and revamp antitrust laws that apply to health care.

Where the proposals differ most sharply is in the burdens they would place on employers and individuals and in the role they would give government in regulating the health care system.

“The plan we are unveiling today is not a Band-Aid approach, but it’s not major surgery either,” Dole said.

While the Clinton plan would require all employers to pay for health insurance for their workers, the Senate Republicans would mandate that individuals be required to obtain health coverage and verify that they have it each year on their tax returns.

Those who fail to do so would be forced to pay a penalty equal to the average cost of insurance in their region, plus 20%.

If a compromise is possible between the two approaches, it may involve requiring employers to pay something less than the Clinton plan’s 80% of the average cost of workers’ benefits.

Chafee insisted that Republicans “have not been drawing any lines in the sand. . . . We believe in any compromise there’s give and take.”

The Republicans also rejected the Clinton proposal to impose limits on the growth of health care premiums that could be paid by regional alliances and to require Americans either to join those alliances or others set up by large employers.

Instead, they said, government should trust a more competitive market to rein in health care costs.

For people who cannot afford to buy insurance, the government would provide vouchers to help defray the cost of premiums. Under current definitions of poverty, families earning about $34,000 or less each year would be eligible for the vouchers.

The voucher program would be phased in and funded through anticipated savings of $210 billion in the Medicare and Medicaid programs over the next five years. That is roughly the same scale by which Clinton has proposed curbing the growth of the two programs--a figure that many in Congress say is unrealistic.

Chafee insisted that the burden on individuals would not be onerous because most companies that now provide their workers with health insurance as a fringe benefit would continue to do so. Others would be encouraged by lower prices to join regional alliances, he said.

However, Kennedy warned that the effect likely would be the opposite. “The requirement on individuals to purchase coverage without any sharing of responsibility by employers, coupled with a government subsidy, will encourage many businesses to drop coverage and shift an even heavier financial burden onto middle-class families and the taxpayers,” he said.

Without government-imposed limits on the growth of health care premiums, Kennedy said, there can be no assurance that health insurance would be affordable, either to businesses or individuals.

Separately, House Republicans introduced a less sweeping health care plan that would require employers to offer health care insurance to their workers but not to pay for any part of it. It also would encourage small businesses to form purchasing pools to buy health insurance.

Although they lack the numbers to force their will on most issues, the fact that their proposal carried 106 co-sponsors could give the House Republicans some leverage in the health care debate, where all sides are badly splintered.

For those too poor to afford health insurance, the House GOP plan would expand the Medicaid program and offer tax breaks to bring the cost of coverage within reach.