Q & A : THE CLINTON HEALTH PLAN

If President Clinton has his way, Congress will soon enact the most radical overhaul ever of the $800-billion-a-year American health care system. Every American-sick and well, worker and employer, doctor and nurse-will be living in a strange new world. Here are some basic questions and answers about how the system would work.

Who will participate in the new system?

All Americans under 65 years of age and all others who are in the country legally. If you are under 65, you would be insured. If you are 65 or older, you would be covered by Medicare, or you could join one of the new health plans.

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What is covered?

Visits to doctors’ offices, hospitalization, emergency services, prescription drugs, mental health and substance abuse treatment. There would be a standard package of these benefits guaranteed available to all Americans.

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Will I have a choice of plans?

Yes. Once a year you would be allowed to choose from among a variety of health plans. In densely populated areas, such as the Los Angeles area, you would have a choice of perhaps six to 10 plans: some health maintenance organizations, some more informal networks of doctors and hospitals, some old-fashioned fee-for-service plans with virtually unlimited choice of physicians.

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How much will I have to pay for insurance?

There are many exceptions in the plan. But if you are a full-time worker and choose a plan whose cost is average for your state or region, you would pay 20% of the cost. If you choose a more expensive plan, you would pay all the difference. If you choose a less expensive one, you would save all the difference.

The Administration says that a typical plan for a single person would cost $1,800 a year. If you chose that plan, you would pay $360. An average-priced plan for a family would cost $4,200; your share would be $840. Costs would be higher in expensive areas, such as Los Angeles and New York.

No plan’s premium would be allowed to cost more than 20% above the regional average. That would make traditional fee-for-service plans difficult to support.

Who will pay the rest?

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If you are a full-time worker, your employer would have to pay the other 80%. For others, the federal government would cover some or all of the expenses.

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How will I pay?

Your share could be deducted from your paycheck every month or you could pay by check. In a two-worker family, your share could be deducted from either paycheck.

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Who gets the money?

A new institution known as a “health alliance.” Businesses with more than 5,000 workers would be permitted to form their own health alliances and, in effect, become self-insuring. Everyone else would belong to a regional health alliance. Alliances would serve regions at least the size of a metropolitan area as defined by the U.S. Census Bureau. In California, separate alliances could be formed for Los Angeles-Long Beach, San Diego, Sacramento, San Francisco and Riverside-San Bernardino. In lightly populated states, there might be only one or two alliances. State governments would decide.

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What will the health alliances do?

They would approve the health plans available for you to choose from. They would negotiate costs with doctors and hospitals participating in each plan and establish fees.

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Who will control the alliances?

Consumers and employers would serve on the boards. Providers--doctors, nurses, hospital administrators, insurance executives--would be barred. States would decide if the alliance boards are appointed or elected.

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Will I have to make payments beyond my insurance costs when I go to a doctor’s office or a hospital?

That depends on what kind of a plan you choose.

The lowest-cost plans, those offered by HMOs, are likely to charge $10 for each visit to a doctor’s office and $5 for each prescription. There would be no co-payment for hospital care under these plans.

The same rule would apply to broader and more informal networks of independent doctors and hospitals.

Fee-for-service plans, with virtually unlimited choice of doctors, would require individuals to pay the first $200 a year in medical bills and families the first $400. After that, consumers would pay 20% of the cost of office visits and hospital treatment. The drug benefit would require consumers to pay the first $250 a year and 20% of all expenses after that.

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Is there a limit to my annual out-of-pocket spending for care?

Under all health plans, even fee for service, the most you would spend in a year is $1,500 for an individual and $3,000 for a family. All additional bills would be paid in full by the local health alliance.

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What if I join a HMO but want to go outside its roster of doctors and hospitals?

You would be free to choose any doctor or hospital, but you would have to pay the full costs from your own pocket.

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Can I stay with my family doctor without signing up for a fee-for-service plan?

You could find out which networks the doctor has joined and enroll in one of them. However, if your family uses several different physicians--an internist, a pediatrician and a gynecologist, for example--it will be unlikely that all would participate in the same health plan.

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What if I work part time?

You still would pay 20% of the premium cost of the average plan in your area. Of the rest, your employer would pay a share according to the number of hours you work. The government would pay the rest.

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What if I’m unemployed?

You are still insured. You would contribute to the 20% of the cost of the premium only if you have unearned income, such as interest from savings accounts or dividends from stock. Otherwise, you would make no payment for insurance until you return to work.

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How about two-earner families?

Only one of the two earners would have to contribute the family’s 20% share of the insurance premium. But both employers would have to kick in their 80% share.

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Is there coverage for mental health and substance abuse?

Under a HMO, all visits to counselors or other outpatient providers would require a $10 co-payment. Psychotherapy would be covered for a maximum of 30 visits a year, with a $25 co-payment.

Fee-for-service plans would carry a 20% co-payment for all outpatient visits. Psychotherapy would have a 50% coinsurance charge with a maximum of 30 visits a year.

Hospital coverage for mental health and substance abuse would be available for 120 days a year with full HMO coverage. Under fee for service, patients would pay the cost of the first day in the hospital and 20% of each additional day’s costs, with a maximum of 120 days coverage.

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I have diabetes and cannot get insurance now at an affordable price? Will I be covered?

Yes. Every person would be insured, regardless of health problems. You could not be rejected by a health plan because of any health problems of you or anyone in your family.

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What happens in a divorce?

The parent who gets custody of the children would pay 20% of the average family premium. If there is joint custody, payments would be shared.

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I have a small business. How much will it cost to cover my workers?

All employers would be required to offer coverage but there would be government subsidies for businesses with fewer than 50 workers who earn an average of less than $24,000 a year. If the average salary at your firm is less than $12,000, you would pay a maximum of 3.5% of payroll, or $420 a year for each worker. For average salaries between $12,000 and $15,000, the cap would be 4.4%; if salaries average $15,000 to $18,000, the cap would be 5.3%; $18,000 to $21,000, 6.2%; and $21,000 to $24,000, 7.1%.

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I am self-employed. How would I be covered?

You would pay both the employer’s and the worker’s cost of a policy, but you would receive a 100% tax deduction. Currently, you can deduct only 25% of health insurance premiums.

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I have a full-time housekeeper. Am I responsible for her coverage?

You must pay the employer’s 80% share. But you can qualify for the small-business subsidy if she is paid less than $24,000 a year. If she is paid $20,000 a year, for example, your cost would be 6.2%, or $1,240 a year.

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What if my employer already pays 100% of the health care costs?

The company could continue to provide this benefit.

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Is there any help with insurance premiums or any financial help for low-income people?

Government subsidies would be available to help pay the 20% share for individuals making $10,445 or less, couples with incomes up to $14,145, families of three with income of $17,835 or less and families of four earning up to $21,525.

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I am enrolled in Medicare. What happens to me?

There is no change in current services. You are free to choose any doctor or hospital. There would be a new benefit, with prescription drugs covered for the first time. You would pay the first $250 a year and 20% of additional charges.

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When will this new system begin?

If Congress passes the Clinton plan, the first states would create health alliances in 1995. By the end of 1997, all states would have to have a system in place.