Compromise Health Plan Unveiled but Without Universal Coverage : Legislation: Bipartisan group of senators focuses on affordability and slower path to covering all Americans. It’s seen as a setback for Clinton.

A bipartisan group of senators on the Finance Committee Friday unveiled the fruits of a closely watched attempt to produce a compromise health care plan but, despite weeks of effort, the proposal failed to reach President Clinton’s bottom-line goal of guaranteed coverage for every American.

“There have been created unrealistic expectations of what can be achieved,” Sen. John H. Chafee (R-R.I.), leader of the group, said in defending the new proposal. “This compromise sends a clear message to the American people that we will not allow health care reform to be jeopardized by extremists from either party.”

Of the five congressional committees charged with producing health legislation, the Finance Committee has been viewed as the most crucial battleground for Clinton’s effort to overhaul the health care system, in part because the committee’s membership closely reflects the range of opinions on the difficult issue that exist in Congress.

And the moderates’ failure to bridge the gap between Clinton and his opponents represented at least a temporary setback for the Administration. Still, although few expect the Chafee formulation to become law, it could prove crucial in moving the process along.

To date, only the Senate Labor and Human Resources Committee has managed to produce a bill for consideration by the full Senate--and its measure is widely considered to be far too liberal to win approval. That has increased the pressure on the Finance Committee’s moderates to find more acceptable middle ground or risk losing any chance for significant reform.

The President emphasized in speeches this week that he is sticking to his promise to veto any legislation that does not guarantee coverage for the 39 million people--about 15% of the population--who now lack it.

And Senate supporters of the Clinton plan had insisted that they could accept the moderates’ plan only if it guaranteed universal coverage.

On Friday, however, some Clinton allies on the Finance Committee shifted their ground slightly, saying that they might vote for the proposal even without the guarantee--as a means of getting the issue to the Senate floor and avoiding the embarrassment of failing to produce a committee bill.

“I will vote for it in committee with the expectation that we will have opportunities to strengthen it on the floor,” said Sen. Tom Daschle (D-S.D.), one of the leading backers of the Administration plan.

The Finance Committee had been scheduled to begin drafting a bill on Monday but announced Friday evening that it would delay meeting in public until later next week.

The conservative Democrats and moderate Republicans allied with Chafee had been meeting feverishly in recent days, hoping to produce a plan that could both meet Clinton’s universal coverage test and claim significant support from both parties.

Their initial strategy for achieving universal coverage was a so-called “individual mandate”--a requirement that uninsured workers be required to buy health insurance, much the way car owners must buy accident insurance under some state laws. The individual mandate was to kick in only if voluntary efforts failed at expanding coverage to 95% of the work force.

The senators hoped that approach would be an acceptable alternative to Clinton’s proposal for requiring employers to pay 80% of the cost of their workers’ health coverage. Clinton’s employer mandate has drawn intense opposition from business, which contends that the additional costs would force smaller and weaker firms to lay off workers or shut down altogether.

The senators’ plan for an individual mandate was attacked from both the left and the right and ultimately they decided against proposing any requirements on employers or their workers.

Instead, they suggested an intricate series of reforms aimed at making health coverage more affordable and thus more nearly universal.

Those earning up to 240% of the poverty level--which means about $33,000 for a family of four--would be eligible for government subsidies to help them purchase health insurance. To help pay for the subsidies and to hold premium costs down, the senators proposed taxing insurance plans that are among the most expensive in their regions.

If by the year 2002, less than 95% of the population was covered, a commission would make recommendations for reaching universal coverage.

Sen. John B. Breaux (D-La.) said that the gradual approach had the advantage of assuring that “we were doing it right. . . . Congress will know a great deal more in the year 2002 than we do now.”

The proposal’s sponsors estimated that the voluntary measures alone would succeed in covering about two-thirds of those who now lack health insurance.

“This is the closest we’re going to come to doing health care reform right,” said Sen. Dave Durenberger (R-Minn.), one of the moderates, adding a plea: “Give the mainstream plan a chance.”

However, reaction was less than enthusiastic.

Two of the original eight members of the bipartisan group--Democratic Sens. Max Baucus of Montana and Bill Bradley of New Jersey--distanced themselves from the proposal. Baucus dropped out of the group entirely and Bradley issued a statement expressing regret that “this proposal did not do more to achieve universal coverage.”

Senate Minority Leader Bob Dole (R-Kan.), also a member of the Finance Committee, said that the proposal “gives us another option to consider and may have elements that will be helpful to the debate.”