Health Reform May Handicap Clinton in ’96

Enactment of comprehensive health care reform will be the crowning achievement of Bill Clinton’s presidency, goes the conventional wisdom. But in the short run, quite the opposite may be true.

Implementation could prove so messy, even painful, that health reform could become a liability for Clinton if he runs for a second term.

“It is a risk and he’s fully aware of that. But he’s just determined to do it because it’s right and it has to be done,” Sen. John D. (Jay) Rockefeller IV (D-W.Va.), a Clinton confidant, said Friday.

“You can’t take a $900-billion economy, fundamentally alter it and not expect dislocations,” added Robert G. Beckel, a Democratic strategist. “Sure, it will become a political issue in 1996.”

By then, if the President’s timetable holds, there is likely to be widespread job loss in some sectors, higher medical costs for significant parts of the population and tremendous uncertainty for nearly everyone as the nation’s vast health care system begins a wrenching, decade-long transition.

“There’s going to be considerable dislocation. No doubt about it,” said John Garamendi, California’s insurance commissioner.

“Under any scenario, from the most modest to the most comprehensive--or the most disruptive--it will require a period of transition when people are going to see a difference--in prices, in how they receive care, in where they go to get that care,” said Christine Ferguson, legislative director and counsel to Sen. John H. Chafee of Rhode Island, the GOP’s leading health care expert in Congress.

“The scope of the problem is so enormous that a transition period is inevitable,” Mark D. Gearan, the White House communications director, said Friday. “But if we address all those problems, people will feel comforted.”

To be sure, there would be some fairly immediate, tangible benefits: insurance for many persons who now lack coverage, a uniform set of insurance forms and the abolition of discriminatory insurance practices that, for instance, penalize those with existing conditions.

But beyond that, the best Clinton can do in 1996 may be to divert voter attention from the immediate turmoil and focus instead on a future in which all Americans will be guaranteed a lifetime of affordable, comprehensive coverage.

Just this week, the President acknowledged that his reform agenda will create short-term “losers.” And Rockefeller has conceded that there will need to be “a kind of defense conversion plan for health care workers.”

As if to underscore such coming pain, Cigna, a large Philadelphia-based health insurer, disclosed plans this week to eliminate up to 1,000 jobs to prepare for the shakeout.

That Clinton is proceeding full speed ahead despite the political perils, Beckel argued, shows that “this guy really believes in some of the things he’s been talking about for years.”

The President’s plan would require states under federal supervision to create large consumer alliances to shop for the best insurance plans for members. The states must have their implementation plans approved by a new National Health Board before Jan. 1, 1997, with full consumer enrollment in the alliances--and universal coverage--by that December.

Ira Magaziner, one of the President’s key health policy adviser, predicted in an interview that up to 10 states may be ready to implement the new system as early as Jan. 1, 1995, with “the bulk” coming into the system in 1996. To hasten that process, the President will offer financial incentives for early implementation, he said.

“Maybe all the President needs (in 1996) is for one state to come on line and point to it as an example of ‘peace of mind,’ and say: ‘Help is on the way,’ ” said Edward F. Howard, executive vice president of the Alliance for Health Reform, a nonpartisan educational group.

That appeal should have “great credibility,” added Ron Pollack, head of Families USA, a consumer advocacy group. “People in other states will gain a sense of confidence that once the plan is extended to them, they too will experience the benefits.”

Rockefeller agreed. “I think in the long term it’ll be a big plus for the President. He will have done something no other President has made a major effort to do and people can forgive him for any temporary inconveniences.”

Clinton has argued that only comprehensive reform will bring about universal coverage and reduce medical spending.

The main financing mechanism for his agenda is a government requirement that all employers pay at least 80% of a worker’s insurance premiums. The employee must pay the remainder. Since about 85% of the 37 million uninsured Americans work, this provision will go a long way toward universal coverage and these people will reap the benefits of health care reform as soon as the health alliances in their states are up and running.

But the mandate will exact a new cost of doing business from small businesses that do not provide insurance to employees and from those, primarily the young, who opt not to carry insurance. To ease that burden, Clinton would provide federal subsidies to small businesses and low-wage earners for a period of eight to 10 years.

“People understand that health care is a very big problem and they don’t expect a magic wand,” said Paul Begala, a Clinton political adviser. “Voters saw George Bush as a failure because he wouldn’t even try. It’s like striking out looking. You gotta get up there and take a cut.”

* PAPERWORK EXPLOSION: President visits hospital to dramatize his plan to reduce health insurance forms. A18

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