Health Plan Study Sees Savings, Job Losses : Benefits: California’s fiscal analyst says Clinton proposal would save state and local governments $700 million a year. But cuts in low-wage employment are foreseen.

The Legislature’s nonpartisan fiscal analyst predicted Thursday that President Clinton’s proposed health care plan would save California hundreds of millions of dollars but also cause the loss of some low-wage jobs.

Most of the job losses and government savings, the analyst said, would come in the first years of the health plan as more employers are forced to help pay for coverage of their workers and as many health care responsibilities are shifted from local and state government to the new system.

In preparing the 27-page report, analyst Bill Wehrle warned that his examination had only covered the plan as it was presented to Congress and that it can change dramatically as it moves through the House and Senate.

The President’s plan as presented to Congress in October attempts to ensure that health care coverage is available for all citizens by requiring states to establish new service delivery systems.

Assemblyman Burt Margolin (D-Los Angeles), who chairs the Assembly Health Committee, said the report shows the need for California to be prepared to implement a health plan as quickly as possible after the federal legislation is approved.

He said, however, that the analysis had been too conservative and understated the potential savings for local and state government. He said his staff has estimated that savings could be as much as $1 billion a year as compared to the $700 million predicted in the new report.

“If we delay or allow Sacramento gridlock to block progress, we could be out hundreds of millions of dollars,” Margolin said. “This demonstrates clearly that we can help balance our budget more easily in future years if we reform our health system.”

Gov. Pete Wilson disagreed. Speaking at a Los Angeles meeting of the National Federation of Independent Business, the Republican said the nation should not accept a health care plan that would cost jobs.

The analyst’s report said the plan was likely to produce short-term job losses in the low-wage sector as employers cope with the new requirements to contribute to health care costs of their workers. The new costs, it said, could prompt employers to raise prices, which could cut demand for their services and thus reduce the need for as many workers.

The job loss could amount to about 75,000, said the analyst’s report, which relied on another study that evaluated the potential drop in jobs.

Most cost savings, the analyst said, would come by transferring the responsibility for most indigent care from state and local government to regional health care alliances. The alliances would get the funds to pay for indigent care through increased obligations on employers and employees--even the working poor--to pay health care premiums. The federal government proposes providing subsidies to the alliances funded by a 75-cent per pack increase in the cigarette tax.