Clinton Unveils Health Reform : He Says U.S. Is at a ‘Magic Moment’ for Action : Medicine: The package would provide coverage to all Americans and seeks to curb rapid cost increases. It would require employers to pay 80% of insurance and would set up regional cooperatives to purchase care.


President Clinton, declaring that the nation has reached “a magic moment” of bipartisan commitment to action, formally unveiled Wednesday what he and his aides hope will be the central achievement of his presidency--a national health care plan that, for the first time, would provide coverage to all Americans.

Speaking to a joint session of Congress and a national television audience numbering in the tens of millions, Clinton declared that “this health care system of ours is badly broken and it is time to fix it.” A reformed system, he insisted, should be more secure, simpler for patients and doctors, less expensive but structured to preserve freedom of choice and quality of care.

“We have got to strengthen what is right with our health care system, but we’ve got to fix what is wrong with that system,” he said.

Displaying a small, credit-card-sized “health care security card” emblazoned with the presidential seal, Clinton told his audience that under his plan all Americans would be guaranteed comprehensive health benefits, and he challenged Congress to make health security the first principle of health reform.


“Let us agree on this,” Clinton said, “before this Congress finishes its work next year, you will pass, and I will sign, legislation to guarantee this security to every citizen of this country.”

Launching the health care plan fulfilled a central promise of Clinton’s presidential campaign, albeit somewhat tardily. Clinton, who had originally promised a health care plan within the first 100 days of his presidency, delayed the effort for three months while he wrestled with Congress over the budget plan that passed in August.

As outlined in his speech and in briefing materials prepared by Administration officials in recent weeks, the President’s plan is aimed at achieving a goal sought by social reformers for decades: health coverage for all Americans. At the same time, it seeks to restrain the rapid escalation of health care costs that has brought the current medical system to the brink of crisis.

To accomplish those twin goals, the plan would:


* Require that all employees have health insurance. The cost of premiums would be divided about 80%-20% between employers and workers, and the insurance would have to meet minimum federal standards for quality and comprehensiveness.

* Require that this insurance be obtained through a network of regional health care alliances--essentially huge purchasing cooperatives--that would negotiate with doctors, hospitals and other health care providers to set fees and restrain spending.

Health insurance premiums for the working poor and the unemployed would be subsidized by the government.

To cushion the financial blow for small businesses that do not now provide health insurance, Clinton would provide government subsidies so that the cost of health care premiums would be limited to a fixed percentage of each company’s payroll.


To pay for the subsidies and other elements of the plan, Clinton is counting on the ability of the new system to reduce administrative costs, paperwork and red tape dramatically, thereby squeezing billions of dollars in savings out of the nation’s current health care budget.

Critics have expressed grave doubts about whether those savings can be realized, but Clinton insisted in his speech that the goal can be achieved. “We can save money in this system if we simplify it,” he said.

Clinton would also impose roughly $15 billion a year in new “sin taxes,” including an increased tax on cigarettes and other tobacco products, and a tax on large companies that decide to stay out of the new system. But, Clinton insisted, his plan could be financed without a new broad-based tax.

Under the plan, Americans would still be able to choose traditional “fee-for-service” medical plans, in which individuals choose doctors and pay separately for each treatment. But the proposed system would contain financial incentives and penalties to encourage people to sign up for “managed care” plans, such as health maintenance organizations. Even doctors in fee-for-service plans would have to accept limits on their fees.


Clinton’s plan now faces months of debate in Congress, where it will compete with several rival proposals.

Some liberal Democrats plan to offer a “single-payer” proposal, which would create a Canadian-style health system in which the government paid all health bills and raised taxes to cover the costs. Moderate Republicans and some conservative Democrats have offered a plan that would bring about universal coverage more slowly than Clinton and without the mandate that employers cover all workers. More conservative Republicans have proposed a plan that would not achieve universal coverage but would make insurance easier for small businesses to buy.

Final action on any health plan is not likely before late spring of next year at the earliest and could take far longer, although many members of Congress in both parties are eager to complete work on the issue before facing voters in next year’s November congressional elections.

Initial reaction to the plan has been generally favorable. Senate Republican leader Bob Dole of Kansas called the Clinton proposal “a good beginning.”


“I would hope in the next six to eight, 10 months we’ll have a bill,” he said.

Wednesday’s speech capped nine months of often-frenetic preparations, led by First Lady Hillary Rodham Clinton, who was greeted by a lengthy standing ovation as she walked into the House gallery and took a seat, beaming an immensely broad smile that, as the crowd applauded, threatened to break into a full-throated laugh of excitement.

Mrs. Clinton received a second standing ovation when her husband praised her early in his speech, saying that in setting the course for reform of health care, he had looked for “a talented navigator” and that “luckily for me and for our nation, I didn’t have to look very far.”

In the House gallery, Mrs. Clinton was flanked by former Surgeon General C. Everett Koop and renowned pediatrician T. Berry Brazelton. Koop and Vermont Gov. Howard Dean, a physician and a leader of state health reform efforts, accompanied Clinton to the Capitol for the speech.


The White House became more calm Wednesday as aides made final preparations for the speech. All day, officials scurried about with broad smiles on their faces and with yellow buttons proclaiming “Health Care That’s Always There"--the slogan for Clinton’s plan--on their lapels.

In the afternoon, before a final rehearsal session with his speech-writing team, Clinton even found time to take a nap--resting up for a moment he has anticipated for years.

Earlier in the day, as the President took his customary run from the Washington Monument to the Capitol and back, Chief of Staff Thomas (Mack) McLarty gathered the President’s top staff for a pep talk.

Last month, McLarty reminded the staff, they had prevailed and passed the President’s budget plan, despite a bruising battle. And on Tuesday, Clinton had signed into law a bill to make a reality of one of his favorite ideas--a national service program for young Americans that will help them pay for college. Now he was about to launch the most important domestic legislation in decades.


Clinton’s poll numbers are up, McLarty said, and the morning’s economic reports had brought welcome news of an increase in housing starts. In short, after a rough start, the White House now is on track, he said.

In midmorning, Clinton seemed cheerful, almost ebullient, as he met with congressional Democratic and Republican leaders. “I think we have a moment in history when we can seize it and move forward,” he told them.

“There is almost unanimous consensus that the cost of continuing on the present course is greater than the cost of change. I don’t think that there’s ever been that much consensus before.”

House Majority Leader Richard A. Gephardt (D-Mo.) nearly ran out of superlatives as he spoke to reporters later in the day about the plan. “This is the biggest bill that any of us has worked on in our congressional careers,” Gephardt said. “This is the biggest piece of domestic legislation since the Social Security Act of the 1930s. It’s bigger than the Medicare Act in 1964, bigger than Medicaid in 1955.


“It will have an impact on everybody who lives in the country. And I’m more optimistic about it than I ever have been.”

In the meantime, White House aides were taking no chances about Clinton’ message not getting out. In the “intensive care unit"--as White House officials have dubbed their health care communications center--Clinton aides hurried to put final touches on dozens of different pamphlets and briefing books designed to answer questions about the plan. Other Clinton aides traveled to Capitol Hill to brief congressional aides, handing out “talking points” for members of Congress to repeat when reporters and constituents ask questions about the plan.

Those questions likely will continue for many months. Although there is much common ground between Republicans and Democrats over basic principles of health care reform--particularly the need for cost containment and universal coverage--key disagreements remain.

Acknowledging as much, the Clintons have indicated a willingness to negotiate on the specifics of their plan.


Times staff writer John Broder contributed to this story.

* UNCERTAIN FINANCING: Financing may be the most uncertain feature of Clinton health care package. A10

* RELATED COVERAGE: A5, A6, A7, A10-A14, D1

The President’s Health Care Pitch


* His goal: Extend health coverage to the 37 million uninsured while shrinking the nation’s $900-billion medical bill.

* Wednesday’s pitch: “Let us write that new chapter in America’s story, and guarantee every American comprehensive health benefits that can never be taken away.”

* “If you currently get your health insurance through your job, under our plan you still will. And, for the first time, all of you will get to choose what plan you belong to.”

* “Reform is going to produce a better health care system for every one of us. But no one should think it’s going to be a free ride.”


* “If we can look into our hearts, we will not be able to say that the greatest nation in the world is powerless to confront this crisis.”

* Next step: Clinton will send Congress a detailed proposal next month. Republicans and conservative Democrats are offering competing proposals.

User’s Guide to the Health Plan

Sunday editions of The Times will include a special section called “Health Plan: a User’s Guide,” a look at the impact of President Clinton’s reform plan on individuals, families, health providers and businesses. The section also features “Choices,” a board game that takes players through the plan’s various options and how they may influence real-life situations.