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THE CLINTON HEALTH PLAN : Health Care Solutions: A Mixed Bag of Options

TIMES STAFF WRITER

President Clinton will go before Congress and the nation tonight seeking support for the most revolutionary overhaul of a domestic program in a generation. If he succeeds, virtually every American will be affected.

The President’s health reform proposal is built on the premise that care is a right, not a privilege, and that every individual is entitled to health insurance.

The legislation he will send to lawmakers provides for a system based on the concept of “managed competition,” where local alliances representing consumers would shop among competing insurance plans for the best deal. But all Americans, regardless of which plan they choose, would be guaranteed a basic package of health care benefits.

Members of Congress have put forward three main alternatives to Clinton’s plan.

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Liberal Democrats in the House have proposed a Canadian-style “single-payer” plan, where insurance companies would be eliminated and the federal government would run the system. Individual states would receive funds to design and administer the programs. Health care would be privately delivered, but the government would pay the bills.

And Senate and House Republicans each have proposed legislation that, unlike the Clinton plan, does not require employers to pay for their employees’ health coverage. However, one of the GOP proposals would make it easier for employers to join together to purchase health plans. It would also allow those who are self-employed or who must purchase their own insurance to deduct premium costs.

Here is a comparison of the major features of the Clinton plan and of those proposals offered by Senate Republicans, who have 18 supporters, House Republicans, with 109 supporters, and single-payer House Democrats, who have signed up 89 supporters.

Since bipartisan backing will be necessary for any health reform bill to be enacted by Congress, any final legislation will almost certainly reflect a compromise among the different versions and incorporate elements of each.

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BENEFITS

CLINTON’S PLAN: A single benefits package that would be available to all Americans with specific services outlined in the legislation.

SENATE GOP: A single benefits package, to be compiled by a national commission. Congress would have the option of accepting or rejecting the entire package, but would not be allowed to amend it.

HOUSE GOP: No basic benefits package spelled out in the legislation.

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SINGLE-PAYER PLAN: A basic list of medical services available to all Americans is spelled out in the legislation. There will be restrictions on cosmetic surgery, but medically necessary elective surgery will be covered.

EMPLOYER OBLIGATION

CLINTON’S PLAN: Employers would be required to pay 80% of the average cost of health care premiums for their workers, who would pay the remainder. Small businesses would receive a subsidy.

SENATE GOP: None, although the sponsors say they believe that most employers who now provide those benefits would continue to do so, and that better access and lower costs would encourage other firms to begin providing them. Because small firms would have the option of joining voluntary regional alliances that would be established, the firms no longer would be refused health insurance or charged higher premiums because they had a few high-risk workers.

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HOUSE GOP: Employers would be required to offer--but not pay for--a basic health plan for their employees. Small businesses would be able to group together to purchase health plans for their workers. Those who are self-employed or who must purchase their own insurance could deduct the costs of their premiums.

SINGLE-PAYER PLAN: Health insurance would not be tied to an individual’s job. The system would be federally financed and run by the states. Every American would be covered and would be entitled to health care, and health insurance would move with an individual, even after a change in employment.

INDIVIDUAL OBLIGATION OR OPTIONS

CLINTON’S PLAN: Employed individuals would be required to pay an average of 20% of the cost of their health care benefits, depending on which plan they choose. Self-employed or unemployed people would be required to pay the entire premium, with low-income people eligible for government assistance.

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SENATE GOP: All individuals would be required by law to carry health insurance. Those who could not afford it would be issued government vouchers to assist them in paying all or part of the average premiums in their area, depending on their income.

HOUSE GOP: Provides incentives for individuals to establish interest-bearing medical savings accounts for the purchase of catastrophic health insurance and an “out-of-pocket” health care expenses account. Those who choose to establish such accounts will be required to purchase insurance policies with a minimum $1,800 deductible ($3,600 for families), but the cost of the policy and contributions to the “Medisave” account would be tax deductible. The accounts can accumulate from year to year, and interest will not be taxable.

SINGLE-PAYER PLAN: Since there will be no insurance--and no premiums to pay--the system would be funded by payroll or incomes taxes. There would be no co-payments required of consumers.

HOW IT WOULD BE FINANCED

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CLINTON’S PLAN: Largely through savings, including $238 billion reaped through curbing growth in Medicare and Medicaid spending to roughly the inflation rate, plus growth in the eligible population. A “sin” tax on cigarettes and possibly alcohol would raise $105 billion between 1994 and 2000.

SENATE GOP: Largely through savings, including by curbing growth in Medicaid and Medicare spending to 7%.

HOUSE GOP: Costs of the tax deduction expansion for the self-employed and individually insured, “Medisave” accounts and other features would be offset by agreed-upon cuts in federal spending.

SINGLE-PAYER PLAN: Likely a mixture of payroll and income taxes from workers, and “sin” taxes. The plan’s supporters predict that there also would be $70 billion in administrative savings resulting from the elimination of private insurance companies.

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HOW COSTS WOULD BE CONTROLLED

CLINTON’S PLAN: Consumers, banding together in regional or corporate alliances, would gain greater negotiating power with health care providers, forcing them to curb their prices. The plan also includes some government cost controls, in the form of limits on the growth in premiums that could be paid by the regional alliances.

SENATE GOP: It, too, would establish regional alliances, but participation in them would be voluntary, and more than one would be established in each state.

HOUSE GOP: Provides for a mix of malpractice and product liability reform, standardization of claims processing to reduce administrative costs, the removal of antitrust impediments to enable providers to enter joint ventures, and allows more Medicare beneficiaries to participate in Health Maintenance Organizations and other managed care arrangements.

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SINGLE-PAYER PLAN: Provides for global budgets set by a single financing authority and limits on the amount of money to be spent. A national health security budget will be established annually, based on prior-year health expenditures plus growth in the gross domestic product. The national budgets would be divided into quality assessment, professional education, administrative and operating components. The board would allocate funds in the national budgets to the states, who would design and administer the programs, based on costs of covered services and the health status of different populations.

CONSUMER CHOICE

CLINTON’S PLAN: Consumers in most states would be offered a choice of plans ranging from an HMO-style plan to a more traditional fee-for-service option. But the plans would be priced differently, with the fee-for-service the most expensive.

SENATE GOP: Those who currently have employer-provided health insurance would see no change in the way their insurance is provided. Small businesses, the uninsured and those who purchase individual policies directly from an insurance company would be able to join a health insurance buying cooperative through which they could choose from a variety of plans.

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HOUSE GOP: The system would function as it does now with a combination of fee-for-service and managed care plans.

SINGLE-PAYER PLAN: Since all of the nation’s physicians’ fees would be controlled, and since physicians would not be permitted to charge patients directly, consumers would be free to see the doctor of their choice.


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