Business Alliance Backs Key Parts of Clinton Health Plan

Joined by a powerful congressman, a coalition of large corporations gave President Clinton’s health care reform drive a boost Thursday, calling for mandatory employer-provided insurance and stringent, across-the-board cost controls.

In backing the two most controversial elements in Clinton’s plan, the business alliance was supported by House Ways and Means Committee Chairman Dan Rostenkowski, who warned of “exploding costs” if the nation seeks to provide universal coverage without enacting tough cost-containment measures.

“If we don’t contain costs, we won’t be able to afford today’s coverage and won’t be able to think about expanding coverage,” he said.

The Illinois Democrat, a key Clinton ally on health reform, recently broke with the President by calling for a broad tax increase to help finance health reform, which Clinton immediately rejected.

The business coalition, called the National Leadership Coalition for Health Care Reform, has 93 members, including the auto industry, Lockheed, Maytag, Safeway, Sara Lee, Southern California Edison, Time Warner, United Air Lines and Xerox, as well as unions, health care provider groups and consumer advocacy organizations.

The group’s call for an employer mandate--with no exemptions for small businesses--is directed at a key phenomenon known as cost-shifting: When doctors and hospitals treat the uninsured, they generally recoup their uncompensated services by imposing higher fees on patients with insurance.

Each year, tens of millions of dollars in costs are shifted in this way, reform advocates say. Hardest hit are firms such as the coalition’s members, who already provide insurance for workers, often spending 12% or more of their payroll. Clinton’s plan would cap such spending at 7.9%.

Coalition leaders conceded that, in backing the employer mandate and cost controls on all medical providers, they are a minority within the business community. But said Curtis H. Barnette, chairman of Bethlehem Steel Corp.: “We are here to say that a substantial part of the business community does support employer mandate and cost containment.”

The two are “inextricably tied together,” said Henry E. Simmons, president of the coalition, whose honorary co-chairmen are former Presidents Gerald R. Ford and Jimmy Carter.

Another speaker at a Capitol Hill press conference was Andrew H. Card Jr., transportation secretary in the George Bush Administration. Now head of the American Automobile Manufacturers Assn., he said that manufacturing firms spend 28% more in health care costs because of cost-shifting.

Neither Rostenkowski nor coalition leaders would say that they specifically back a cap on insurance premiums, as proposed by Clinton. Rostenkowski said that he wants to sound out a majority of his committee members before taking a public stance on the issue.

The coalition advocates the establishment of an annual target for aggregate health care expenditures--covering both the private and public sectors.

Meanwhile, abortion coverage survived its first key test Thursday when a House panel beat back an attempt by anti-abortion lawmakers to eliminate the benefit from the standard benefits package proposed by Clinton.

The vote in the labor and management relations subcommittee of the House Education and Labor Committee was 16 to 11.