GOP Analysts Assail Costs of Clinton Health Care Plan : Forecast: Report predicts shortfall of at least $918 billion by the year 2000 if the proposals are enacted. Quality of care will suffer, it says.

A new analysis of President Clinton’s health care reform plan by Republican members of Congress’ Joint Economic Committee warns that the White House initiative will face a shortfall of at least $918 billion over its first six years.

The assessment, prepared by the committee’s GOP staff members, stands in sharp contrast to the Administration’s forecasts, which indicate that the health care overhaul will produce enough savings to reduce the federal budget deficit by almost $60 billion.

The GOP assessment will be released Monday by congressional Republicans and is the latest volley in what has become a war of competing economic prognostications about the untested system Clinton has proposed.

Its release will come a day before the President’s State of the Union Address, which has been designed in part to reignite momentum behind the reform plan.

Last month, the Administration was jubilant when an independent forecasting firm, Lewin-VHI of Fairfax, Va., predicted that Clinton’s plan could achieve health coverage for all Americans without a broad-based tax increase.

However, Lewin-VHI also found that the Administration had underestimated the costs of the benefits it proposed--and exaggerated the savings it can achieve in health care costs.

The most influential of the forecasters will not weigh in until next month. Congressional Budget Office Director Robert D. Reischauer is expected to offer his own assessment of the Clinton plan in testimony before the House Ways and Means Committee.

In its analysis, the Joint Economic Committee’s Republican staff contended that even if the Administration’s plan kept health care spending at the levels it claims, funds available to pay those costs would fall short by $918 billion through the year 2000.

However, the GOP staff contended that the Administration is not being realistic in estimating that the costs of health care will be reined in under its proposal. To the contrary, it wrote, giving coverage to 37 million Americans who are now uninsured and increasing the benefits of tens of millions more will greatly increase the demand for health care services--and presumably, their price.

Using its own assumptions about the costs of providing all Americans with health care benefits comparable to those offered by Fortune 500 firms, the Republican staff estimated that the shortfall actually could reach almost $2 trillion through the year 2000.

“The gap equals two-thirds of total individual income tax collections in 1995 and grows to 95% of the individual income taxes that the federal government expects to collect at the end of the decade,” according to the report.

Rep. Dick Armey (R-Tex.), a member of the House Republican leadership and a critic of the Clinton plan, said the only options for dealing with such a shortfall would be massive increases in the federal budget deficit, equally large increases in taxes, rationing of health care or a combination of the three.

The President’s plan “will result in the budgetary disaster detailed in this paper, and the quality of health care for most Americans will deteriorate,” Armey wrote in a foreword to the study.

The role of the Joint Economic Committee is to study economic issues and make recommendations to Congress.