Foley Open to Employer Mandate Cut : Health: Speaker says he will consider a business contribution of 50% of premiums. Mitchell studies a similar move, but it is unclear if the action would gain votes for reform.

Seeking compromise on the most controversial element of President Clinton’s health care plan, House Speaker Thomas S. Foley (D-Wash.) said Tuesday that he will not insist on employers paying 80% of workers’ insurance premiums and instead is considering setting business contributions at 50%.

Foley’s comments came as Senate Majority Leader George J. Mitchell (D-Me.) also was exploring whether lowering the contribution to 50% might win some badly needed votes on his side of the Capitol. Mitchell’s proposal, however, would not require any mandatory employer contribution until some date in the future and then only if voluntary health care reform measures had failed to provide coverage to a target level of 95% of the population.

Foley’s readiness to compromise indicates how difficult it will be to pass the 80% requirement in either chamber. Most analysts had been saying the mandate appeared to have far better prospects in the House than in the Senate.

“The percentage of employer-employee contribution is one of the things that can be discussed,” Foley told reporters. “Nothing there is written in stone.”

The employer mandate is Clinton’s chief means of reaching his goal of universal coverage. Except for a proposal that would have government take over the financing of health care, none of the alternatives being offered in Congress have found a way to achieve universal coverage without requiring employers to pay a share of the insurance for their workers.

By lowering the required employer contribution, congressional leaders hope to pick up support from moderate to conservative Democrats and Republicans who believe that an 80% share would be too burdensome for businesses. It was far from clear Tuesday, however, whether dropping the mandatory share to 50% would pick up many votes.

On the other hand, reducing the employer share of premiums would place a greater financial burden on employees, which means that many workers at lower income levels would not be able to afford coverage unless the government provided generous subsidies at taxpayer expense.

Although Foley said he favors the 80-20 “division of responsibility,” the Speaker noted pointedly that his home state of Washington has adopted a plan under which employers are required to pay at least 50% of insurance premiums. Nothing in any of the alternatives being discussed would prevent employers from contributing a greater share.

Foley’s comments came as a surprise to many Clinton allies in the House. The version of the Clinton bill being readied by House Majority Leader Richard A. Gephardt (D-Mo.) contains an 80% requirement, according to a preliminary draft obtained by The Times.

Yet some of those who support the Clinton plan express doubt that lowering the requirement will pick up any votes. With many members saying they will not support any mandate, “I’m not sure going to 50-50 is going to answer the objections,” said Rep. Henry A. Waxman (D-Los Angeles), chairman of the Energy and Commerce Committee’s health and environment subcommittee.

Moreover, it could be enormously expensive to lower the requirement. Such a move presumably would be accompanied by large government subsidies to help low- and moderate-income workers afford their share of the cost.

Florida Democrat Sam Gibbons, acting chairman of the House Ways and Means Committee, warned pointedly that reducing the employer share from 80% to 50% would increase the cost of government-financed subsidies by $30 billion a year.

He, too, said such a move would not mollify opponents of mandates: “Those who are opposed to employer mandates at 80-20 are still opposed when it is 50-50.”

Gephardt’s bill, which he hopes to unveil Friday, also would require individuals who do not have coverage through their employers to buy their own insurance and would provide government subsidies for that purpose to families with incomes up to $38,400 a year, according to the working document used by Gephardt in his Monday meeting with other House leaders.

Gephardt fashioned the bill from two separate pieces of legislation that had been passed by the House Ways and Means Committee and the House Education and Labor Committee. Each contained highly controversial provisions. Gephardt closely followed the approach taken by the tax-writing Ways and Means Committee.

The close resemblance between the Ways and Means and the Gephardt bills prompted one health care analyst to surmise that the lawmaker either believes that he has the votes to ram the employer mandate through the House--almost certainly on a strictly party-line vote--or that he has tried but failed to come up with another way to reach universal coverage without an employer mandate.

Despite many new details contained in the Gephardt document, a number of key issues were not mentioned--indicating that major issues remain unresolved, most notably a specific phase-in schedule for the employer mandate.

The Gephardt bill would:

* Grant tax credits on a sliding scale to small businesses with 50 or fewer workers and a low average payroll.

* Provide full subsidies to individuals with incomes below the poverty level. Subsidies also would be granted on a sliding scale to those with incomes up to 240% of the poverty threshold.

* Create a Medicare Part C for those beyond the reach of an employer mandate, such as seasonal workers, low-income employees of small businesses and early retirees not yet eligible for Medicare.

* Require all employers to offer at least one traditional health plan, which does not limit consumer choice of providers.

* Provide for a standard benefits package, including long-term care and prescription drug coverage.

* Allow states to adopt a government-financed single-payer system, similar to one that is on the November ballot in California. It also would require purchasing cooperatives, through which individuals and small companies could get more clout in the health market by pooling their resources.

* Bar insurance companies from jacking up rates on those who develop costly illnesses and force insurers to take all applicants, even those with pre-existing conditions.

* Create a National Health Cost Commission that, by the year 2000, would recommend cost-containment measures to Congress that would automatically take effect unless rejected by Congress.

* Increase by 45 cents per pack the current 24-cent federal cigarette tax. That is significantly less than the 75-cent hike recommended by Clinton.