Big Business, Labor Blast GOP Health Plans

A coalition representing big employers and some major labor unions warned Tuesday that the budget-balancing plan approved by Congress could “add almost 8 million people to the ranks of the uninsured and shift $85 billion in costs to the private sector.”

The National Leadership Coalition on Health Care, which counts Chrysler Corp., Ford Motor Co., Ralphs Grocery Co., Safeway Inc. and Southern California Edison Co. among its 93 members, raised the first public complaints by major businesses over the impact of the Republican plan to balance the budget in seven years.

The coalition also includes the International Assn. of Machinists, United Steelworkers, and the International Brotherhood of Electrical Workers.

The GOP budget plan--which President Clinton has threatened to veto--contains provisions to slow the rate of growth in Medicare and Medicaid, as well as a tax cut. The White House and congressional leaders are negotiating toward a Dec. 15 deadline, with hopes of reaching an agreement on a blueprint to eliminate the deficit.

Although “it is clearly beneficial for all Americans” to reduce the deficit and balance the budget, the coalition said, “we must be concerned that, as we make major changes in Medicare and Medicaid, we do no harm.”

The coalition, whose honorary chairmen are former Presidents Gerald R. Ford and Jimmy Carter, issued a study claiming that proposed savings in Medicaid outlays over the next seven years would cause states to cut 7.2 million people from Medicaid eligibility.

As hospitals and doctors treat growing numbers of people without health coverage, the costs will be shifted to private patients with health insurance through their jobs, the study predicted. The added financial burden “would be passed on to workers by employers in the form of forgone wages and in the form of higher cost sharing for health care premiums,” the coalition said, summarizing a report prepared by Lewin-VHI, a health care consulting firm.

Meanwhile, the American Medical Assn., which represents roughly half of the nation’s physicians, Tuesday reaffirmed its support of the Republican budget plan to reform Medicare but expressed some reservations about the level of health care provided to the poor under the Medicaid changes.

“We . . . support the continued provision of necessary medical services for our most fragile populations,” Dr. Lonnie R. Bristow, AMA president, said in a statement issued during the group’s interim winter meeting in Washington.

But “we are continuing to work on our Medicaid concerns with the congressional leadership and the administration, just as we are working with them on other important health care issues,” Bristow said.

As part of balancing the budget over seven years, the plan approved by Congress would reduce the growth of Medicaid spending by $163 billion over seven years. It would end the entitlement nature of the program for the poor under which the disabled, the indigent elderly in nursing homes and poor pregnant women and children living in poverty are guaranteed coverage for health bills. The state and federal governments now share the costs.

The GOP plan would give each state a block grant, with each state deciding on eligibility and benefits.

Members of the leadership coalition on health care fear that states may cut drastically into Medicaid eligibility, leaving large numbers of people without health protection.

Republican legislators noted that total Medicaid spending will grow under their plan and said that the states can provide good coverage for the indigent through the use of health maintenance organizations and other forms of managed care.

The coalition made public for the first time letters from corporate leaders to members of Congress, warning about the consequences and costs of a steady rise in the number of Americans without health insurance.

Byron Allumbaugh, chief executive officer at Los Angeles-based Ralphs, urged Senate Majority Leader Bob Dole (R-Kan.) in a letter earlier this year “to support a comprehensive balanced solution--not a piecemeal approach--to this very important issue.”

“The slim margins we earn in the retail food industry leave little room to absorb the continuing inflation in health care costs,” Allumbaugh wrote.

Times staff writer Marlene Cimons contributed to this story.