Clinton Official Defends Health-Care Plan : Reform: Donna Shalala addresses a standing-room-only crowd of seniors in Sherman Oaks.

Secretary of Health and Human Services Donna Shalala on Thursday defended, explained and tried to sooth fears over President Clinton’s newly outlined health care reform package to about 250 senior citizens in Sherman Oaks.

Shalala assured the sometimes raucous, standing-room-only crowd that the President’s plan will not gut Medicare, which for the past three decades has paid hospital bills for Americans older than 65.

“The Medicare program will be the most secure of the programs, because we’re not going to change it dramatically,” Shalala said. “No matter what you hear, the Medicare program is going to stay intact. More importantly, we’re going to strengthen it.”

Under the plan Clinton detailed Wednesday night, she said, senior citizens would receive some relief from the soaring cost of prescription drugs and in-home care, most of which are not now covered by Medicare.

But despite the assurances, members of the crowd at the Van Nuys-Sherman Oaks Senior Citizens Center--though they sometimes listened raptly and often applauded--were not entirely satisfied.

Many in the audience wanted to know why the Administration does not support the so-called “single-payer” plan proposed by some congressional Democrats, which would extend Medicare-type coverage to all Americans.

Shalala said that approach, though it eliminates the costly health-insurance industry, is unpopular with many on Capitol Hill because it puts health care entirely in the government’s hands.

“There isn’t a lot of support in Washington right now for the single-payer system . . . “ Shalala said, pausing while several people booed. “I think there’s a lack of confidence in the ability of the national government to run a huge, national, socialized medical system.”

In fact, capping Medicare itself is a key element of Clinton’s plan. The President is counting on trimming $124 billion from the system’s soaring budget over seven years to help fund his proposal for universal health care.

But 75-year-old Belle Palmer, president of Los Angeles-based Seniors for Action, said later that she believes a streamlined Medicare-style approach could work for everyone. “We have a single-payer system,” she said. “Why can’t everyone else?”

Afterward, Shalala suggested that some senior citizens are out of step with a new generation of politicians, many of whom feel that less government is better.

Many seniors “think everybody ought to be under a single-payer system,” the 52-year old secretary told reporters. “They also come from a generation--the FDR generation--in which big government isn’t so bad to them. The American public has spoken on this subject. . . . They don’t want big government.”

Differing opinions aside, most members of the audience seemed pleased with Shalala’s visit, and with the plan to change the health-care system in general.

“Finally, we have a government that is working on getting coverage for everyone,” said Ned Kass, 79, of Woodland Hills. “A lot of us are very active on health care issues, and we’ve been pushing for a universal plan for a long time.”

Shalala’s one-day swing through Los Angeles came as other Clinton Administration members fanned out to U. S. cities Thursday to drum up support for the Clinton plan as it goes to Congress.

Clinton and First Lady Hillary Rodham Clinton flew to Tampa, Fla., for a nationally televised townhall-style meeting Thursday night.

Shalala left Sherman Oaks for a meeting with editors and reporters at The Times in downtown Los Angeles, where she said Clinton would amend his health care proposal’s treatment of illegal immigrants. Under the initial plan, illegal residents would be covered only for emergency services.

One way or another, Shalala said, she expects that enough money could be found in the health budget to meet some non-emergency needs of illegal immigrants as well.

“We intend to maintain the status quo,” she said. “There may well be some more prevention services available, like immunization.”

Her visit to Los Angeles was aimed largely at trying “to overcome some of the nervousness” about the Clinton plan among senior citizens, she said.

In Sherman Oaks, many appeared eager for a changed system.

“We’re not going to be around forever,” Kass said. “But before we’re gone, a lot of us would like to see something done for the future, for our grandchildren.”

Times staff writer Doug Shuit contributed to this story.