Clinton May Seek Less on Health Care : Legislation: Officials say President might accept bill that softens his pledge of universal coverage. A ‘phase-in period’ is under consideration.

Although President Clinton publicly continues to insist that he will veto health care reform legislation that falls short of universal coverage, White House officials privately acknowledged Wednesday that he might be prepared to accept a measure that settles for something less.

When Clinton first drew his line in the sand, it was a clear and simple one: He would not sign any health care bill that did not guarantee every American private health insurance that could never be taken away.

But now, with the congressional debate over health care legislation at a critical and delicate stage, the sands are shifting.

At a minimum, the compromises now on the table would delay universal coverage--possibly into the Administration of another President, who could stop it altogether. Other proposals--thus far rejected by Clinton--stop well short of ever guaranteeing coverage for everyone.

With a softening of the line on universal coverage, new questions arise, both in the Administration and on Capitol Hill: Should the President hold out for legislation that covers 99% of the public? Would 95% be enough? How about 91%? And is covering an additional 2% or 3% or even 9% of the population so important that it is worth sacrificing the benefits that a less ambitious bill might provide to hundreds of millions?

If the President is willing to lower his sights, he might have a deal. But he would also have reneged on his pledge. Such a possibility has a haunting ring for Democrats, who exploited President George Bush’s failure to keep his “read-my-lips” promise to veto new taxes.

Clinton’s deputy chief of staff, Harold M. Ickes, noted in an interview Wednesday that “the President is insisting on universal coverage. There was no backing off on that.” But, Ickes went on to stress, “universal” can be an extremely flexible concept.

Indeed, where officials once talked of the onset of universal coverage as a single event--a date certain by which all Americans would have an insurance plan--they now more often describe it as a “process.”

“You can have a phase-in period,” Ickes said. “The questions are whether the phase-in period is a reasonable amount of time and whether at the end of the process everyone is covered.”

The pressure to redefine the bedrock concept of universal coverage comes as the White House and leaders in Congress have begun to negotiate in earnest over the most controversial element of the President’s health care reform plan, his proposal to require employers to pay 80% of their workers’ health care costs.

Only through such a requirement could universal coverage ever become a reality in a privately run health care system. However, business groups argue that the additional expense also could force many smaller and weaker firms to lay off workers or shut down altogether.

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To date, the two sides have battled each other to a deadlock. But there has been evidence of more flexibility in recent days. Both Democrats and Republicans have advanced proposals under which the so-called employer mandate could be “triggered” if other reforms did not succeed in extending coverage to all or virtually all of the population.

The main sticking point for the White House appears to be assuring that Clinton is able to plausibly say to the American people that the bill he signs does “guarantee private insurance for all Americans” at some point. “You have to have some kind of guarantee,” said one senior Clinton aide.

On Capitol Hill, some of those most anxious to cut a deal say even that is too much to realistically ask. Sen. John B. Breaux (D-La.) noted that when government statisticians talk about “full employment,” they generally mean that at least 94.5% of the labor force is working.

“Why doesn’t the same logic apply when you are talking about health care costs?” Breaux asked. He pointed to a study showing that 91% of the population, whose health care bills represent 97% of the nation’s medical costs, could be covered without an employer mandate if reforms were made in the health insurance market.

The true calculations, however, are far more complicated than that. Even under Breaux’s approach, Clinton’s advisers argued, about 25 million people would remain without coverage. Four-fifths of them would be people with jobs, generally low-paid workers at small firms.

What’s more, Breaux’s proposal and others assume that if employers are not forced to subsidize the health coverage of those who cannot afford it, the government would--to the tune of hundreds of millions of dollars over five years, according to most estimates.

At the same time, health care experts warned that it will be more difficult to rein in overall health care costs if large numbers of people remain without coverage. That is because the costs of treating the uninsured will continue to be shifted onto those who have coverage.

The signs of weakened resolve on universal coverage have alarmed many of Clinton’s most loyal allies. “We’re on a slippery slope here. God knows where it will end,” said one lobbyist for a group that has ardently supported the President’s health care plan.

Moreover, if the President goes too far to appease the right, he could lose liberal votes. “They have some belief down there (at the White House) that they can get us any time they snap their fingers,” said Rep. Jim McDermott (D-Wash.), who leads a faction of 90-plus House members who support universal coverage in the form of a government-financed health care plan modeled after Canada’s system. “The only thing they understand is when you don’t vote for them.”

However, it is far from certain that a compromise would hurt Clinton politically. Polls indicate that universal coverage is not the issue that is fueling middle-class sentiment for health care reform.

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“A lot of what the public thinks is major reform, things they really want, is really rather minor insurance reforms--ending the pre-existing condition requirement, for example,” said Democratic pollster Celinda Lake, referring to the situation in which people who have known illnesses have difficulty affording insurance coverage.

“If the Administration gets some piece of that, they’re going to be fine” with voters, she added.

GOP pollster Richard B. Wirthlin agreed that it would be more dangerous politically for Clinton to hold on to his principles at the risk of seeing his entire effort fail. “They need a win,” Wirthlin said. “It’s very hard to recoup anything positive from a legislative defeat.”

To some, the fact that trade-offs on universal coverage are even being discussed appears to indicate that the health care debate has moved from rhetoric to realism. “In some ways, I find it really heartening. For the first time since we started this high-profile debate, we’re really grappling with the fact that this is tough stuff,” said Ed Howard, executive vice president of the Alliance for Health Care Reform, a research and advocacy group that supports universal coverage.

Meanwhile, on Capitol Hill the gritty business of trying to produce health care legislation continued, with little progress evident among the four committees that have yet to pass a bill.

The House Ways and Means Committee dissolved in disarray Wednesday after opposition developed to some provisions of an amendment, offered by Rep. William J. Jefferson (D-La.), that was supposed to be the glue to hold together a shaky Democratic majority.

Jefferson’s proposal combined larger tax credits for small businesses with fewer than 50 employees, a reduced level of tobacco tax increase to help pay for the plan, halving the proposed tax on insurance premiums and a three-year postponement--to the year 2000--of proposed long-term care for severely disabled people.

The amendment was designed to attract the votes of several Democrats, including Rep. Lewis F. Payne Jr., who represents a tobacco-growing district in Virginia, as well as solidify the support of Jefferson and Rep. Peter Hoagland, a moderate from Nebraska.

But the proposal to reduce the tobacco tax increase from 60 cents, as recommended by committee Chairman Sam Gibbons (D-Fla.), to 45 cents, drew fire from other Democrats.

The Senate Finance Committee, which is considered the most fertile ground for a grand compromise, began its effort to draft a bill with a discussion of insurance issues that most of its members already agree upon. It will continue its work behind closed doors next week.

In Chicago, the politically powerful American Medical Assn. on Wednesday urged Congress to pass some type of health care reform, and its members promised that it would not automatically oppose any of the approaches that are likely to come out of Congress.

“We’ve been saying since 1990 that we need health system reform. We’d be very disappointed if there was no legislation by this fall,” AMA Executive Vice President James Todd told reporters during a break in the organization’s annual meeting.

“We are flexible. We are willing to look at almost anything that achieves health system reform,” Todd said.

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Times staff writer William J. Eaton contributed to this story.